2024 Complete Guide to Inventory: Types and Management Techniques

Inventory is the backbone of your business, comprising the products your customers love and the goods that drive your profits. This guide will help you understand the essentials of inventory management in 2024, its categories, and why and how to manage it effectively.

What is Inventory?

Inventory includes all goods involved in the manufacturing of the final product or ready-to-sell items. These items are considered current assets on the balance sheet and are intermediaries between manufacturing and order fulfillment. Efficient inventory management leads to higher productivity and profitability.

Purpose of Inventory

Inventory supports retail operations with a continuous supply of materials for production and sales. Effective management ensures enough inventory to meet customer needs without excessive carrying costs.

Types of Inventory

1. Physical Inventory: Tangible goods that can be counted, weighed, and measured. This includes:
   • Raw Materials: Unprocessed materials used in production.
   • Work-in-Progress (WIP): Partially finished goods.
   • Finished Goods: Ready-to-sell products.
   • MRO Supplies: Items needed for production and sales, like office equipment and PPEs.
2. Merchandise Inventory: The total value of goods your business holds, including raw materials and finished products.
3. Digital Inventory: Real-time tracking and monitoring of inventory using technology and inventory management systems.
4. Pipeline Inventory: Goods in transit from manufacturers or suppliers to fulfillment centers or warehouses.

Inventory Management

Inventory management involves organizing, storing, managing, and tracking inventory to optimize operations and enhance profits. Key benefits include:

• Improved demand forecasting
• Empowering contingency planning
• Saving on storage costs by strategic inventory allocation

Why Outsource Inventory Management to a 3PL like ShipBots?

Outsourcing to a 3PL like ShipBots offers numerous advantages:

• Real-time Inventory Tracking: Visual tracking of inventory counts.
• Strategic Distribution: Lower shipping costs and reduced shipping time.
• Integration: Seamless integration with major eCommerce platforms and marketplaces.
• Proactive Reordering: Prevents stockouts.
• Efficient Kitting and Bundling: Enhances sales.

At ShipBots, we use a customizable inventory management portal to analyze trends and enable data-driven decisions. We help clients forecast customer demand and offer competitive fulfillment solutions.

To learn more about optimizing your inventory management process, contact us here.

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