If you’re conversant with the Inventory management software world, then you know that it consists of buzzwords that outline parts of the software that can play a vital role in the proper management of inventory. What most people who use these buzzwords don’t know is that not everybody knows the ins and outs of inventory management and they may need detailed explanations to get the hang of it. We’ve picked out some common terms used in inventory management and how they can help your business to grow:
Inventory management terms: Bill of materials
Bill of materials refers to all data relating to any material production plan, as well as required components and its assemblies. Bill of materials helps you to draw up a plan for specific products that should be produced and the particular ingredients to get from the inventory to aid the production plan. Bill of materials also lets you quickly know the items available in stock and those that need to be reordered to aid in the product production plan. The bill of materials will save you a ton of time when compared to managing inventory manually.
Inventory management terms: ABC Analysis
ABC Analysis will avail to you information about your stock items that massive contribute to your cost of goods sold by considerating the 80/20 rule. The 80/20 rule means that 80 percent of inventory sales originate from 20 percent of your items. ABC Analysis can help with the management of your inventory, restocking and keeping low stock of items you don’t need. Inventory management can free up capital to use in the expansion of your business because money is not held up in stock.
Inventory management terms: Turnover
Turnover is the rate at which inventory is sold and restocked in a given period. High turnover means your inventory is moving fast. Inventory management system can help you determine your stock turnover and tell you which stock items can have a dramatic effect on your cash flow.
Inventory management terms: Multiple warehouse management
When businesses start out, they usually have a store on the premises to keep inventory. But when they scale up, they find that they have a lot of inventory to handle, which means they have to look for a separate location to accommodate excess inventory. Some retail Pos systems let you manage inventory in multiple locations. The inventory management system also enables you to initiate transfers within the inventory system. Even with multiple warehouses, the POS software can help you manage your inventory effectively.
Inventory management terms: Serial number trucking
Many businesses have tracking systems that enable them to monitor their inventory in store and when in transit. They give every product a serial or lot number to facilitate tracking. When an item is returned by the customer, they are able to identify it and sort out the customer quickly. There are POS systems that have the capability to track stock items using the serial number. This can help minimize cases of inventory theft and help in stock taking.
Inventory management terms: Physical inventory
Physical inventory is the act of physically counting stock items in the store or warehouse, entering the details in a retail Pos system and ascertaining if they agree with the records in the computer. This is the surefire way to check the accuracy of your stock items. A Point of Sales software can help here by printing out stock sheets to physically enter the counted stock items.
There are many more terms that you should know if you want to wrap your head around inventory management. But you might come across these more often. It’s a good idea to learn them off by heart to be articulate in inventory management niche.
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