What is the role of Inventory Management

As inventory accounts for significant cost within an organization its unsurprising that many companies have departments whose primary objective is the management and optimization of materials – while this is a wide raging activity which may vary from company to company there are a number of common objectives that are often encompassed by the function. This includes:

1. They delivery of service levels to customers by ensuring inventory is available in accordance with need.
2. Forecast future stock requirements
3. Optimize stock levels ensuring a correct mix of stock type and quantity to meet budgetary and service level requirements.

4. Provide visibility of inventory throughout the organization and supply chain

A number of factors can influence the focus of inventory management notably industrial sector, customer, organizational structure (decentralized for example) and influence of external factors such as globalization.
A number of tools and models are often used these include

1. ABC Analysis
2. Min/Max
3. Demand Planning
4. Runners, Repeaters and Strangers