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What is inventory management and control?

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As a significant contributor to efficiency and cost savings, inventory management plays a pivotal role in giving a company a competitive advantage. We have developed a comprehensive knowledge of inventory management best practice, allowing us to pass on the benefits of an effective supply chain to our clients. Contact us today to find out more.

Inventory Management

What is inventory management?

Inventory management refers to the process of looking after non-capitalised assets. It is a key process in supply chain management and monitors the movement of goods from manufacturer to warehouse, and from warehouse to the end customer. Critical to this process is the keeping of a detailed record of each and every product.

Inventory control seeks to strike the delicate balance between minimising inventory costs and the ability to satisfy customer demands in a timely manner. Occasionally, inventory control and inventory management can be used interchangeably.

When does inventory management occur?

Inventory management occurs throughout the supply chain management process. An efficient system will ensure that records are kept every step of the way and that management is alerted to any problems early in the process, making them easier to solve. The aim is always to shorten the order fulfilment time without incurring additional costs.

The principles of inventory management include:

  • Demand forecasting

Being able to pre-empt and predict demand allows for the maximising of cost savings. With regards to inventory management, it allows your business to establish the minimum and maximum inventory levels. Inventory that is idle is costly because of the expenses incurred handling and monitoring, as well as the additional storage costs.

  • Warehouse flow

Just like any process in business, there should a simple, fluid flow to allow for the efficient completion of tasks. A cluttered and disorganised warehouse flow will result in inefficiencies that will raise costs and ultimately delay distribution, upsetting your customers.

  • Stock rotation

This is the clear indicator of how effective your inventory management system is. It will reflect how well you have interpreted your maximum and minimum levels of inventory.

  • Process auditing and assessment

As with all business processes, continuous improvement is facilitated by audit and assessment. It helps you identify weaknesses and shortcomings so you can panel beat the process. In inventory management, audits of the process should occur at every transactional level from stock receipt to distribution.

Objectives of inventory management

Ultimately inventory management has to maintain a delicate balance between two objectives. It needs to maintain stock levels that are sufficiently:

  • High enough to make production and sales activities smooth and profitable
  • Lowenough to keep costs low and maximise profitability


  • Continuous supply of raw material and finished goods for consistent production
  • Reduction of inventory associated costs including theft, obsolescence and wastage etc.
  • Maximum customer satisfaction with timely and effective distribution

Contact us today for superior inventory management and supply chain management efficiency.