Inventory Management vs Inventory Control: Inventory Management and Inventory Control are often used interchangeably in the field by professionals. However, if we dive deep into the topics, we will find that they in fact possess a few differences. In this article, we will aim to clear up those points of difference and also try to paint a better picture of which should be used and when.
Both the terms, Inventory Management and Inventory Control may be similar but each of them has different focuses. While the former has more to do with inventory forecasting and ordering, the latter is a part of inventory management and focuses on how to handle the stock. In fact, Inventory Management is a subset of inventory control.
Let’s look at each of these in-depth.
First, let’s start with inventory management.
Inventory Management vs Inventory Control
Inventory Management is a process that has many different components which have been divided up into categories. Inventory Control, on the other hand, deals solely with those aspects of inventory for which there are short-term variances from expected amounts and costs. These areas include safety stock, order quantities, transportation methods as well as the actual control over items in storage locations such as warehouses or retail stores.
In this section, we will discuss both concepts to help you understand what they entail better. We’ll also point out where one might be more appropriate than another depending on your needs and business operations.
Inventory Management revolves around inventory forecasting and replenishment activities. It manages the entire process of procurement, storage and using the inventory product, both as raw materials and as the finished products. It includes knowing what product is in store, the quantity, where it is located and ensuring that it is stored in good condition, along with products that are not in stock and when they need to be brought in, in order to properly fulfil customer orders. It also is required to ensure that the business is not holding more stock it can sell. Inventory Management is by far one of the most crucial processes in an organization, especially those in eCommerce.
The process of managing and controlling inventory is what enables a business to ensure that it has the right product, in the right place at the right time for its customers. This ensures many things:
- It reduces waste by decreasing stock levels closer to demand;
- Ensures that products are available when needed (e.g., seasonal peak periods);
- Ships only paid items, and helps maintain customer satisfaction through timely delivery; and other benefits!
In order to make inventory management even more efficient in your organization, an online system can be used to manage stock across multiple warehouses in different locations – it makes this an excellent solution for companies with decentralized operations.
DID YOU KNOW: Inventory Management is also known as stock management.
Inventory Control is a part of the inventory management process. It has to do with managing (a.k.a. controlling) the inventory that the company already has in its possession. The different activities involved in inventory control are receiving, storing, transferring and tracking inventory as well as fulfilling orders and managing returns. For any eCommerce company, stock rotation is an important part of inventory control, as well as the overall inventory management process. To ensure you have control over what items are used to fulfill customer orders, it is important to define the flow of stock. Depending on the kind of products (or services) that you sell i.e. your product portfolio, you can dictate how a product is deployed to fulfill customer orders.
If you have a service-based product, the servicing of customers is also made easier through inventory management. The use of tools such as route planning and automated dispatching can save time while optimizing resource utilization within your organization.
Inventory control software manages all these processes behind the scenes automatically for retailers or distributors without requiring any manual effort from employees! This makes it easy to manage stock across multiple warehouses in different locations, which is often a challenge for SMBs, and hence, makes this an excellent solution for companies with decentralized operations.
- Some common inventory control methods are:
FIFO (First In, First Out) –
- The oldest inventory is used first to fulfill customer orders.
LIFO (Last In, First Out) –
- The inventory received most recently is used to fulfill customer orders.
FEFO (First Expiring, First Out) –
- The inventory closest to its expiration date is used to fulfill customer orders.
The Similarities Between Inventory Management and Inventory Control
Let’s look at some similarities between inventory control and inventory management. Both practices work to ensure that a business has the right products on hand for customers. Because inventory control is responsible for creating forecasts, it works closely with order fulfillment teams and other departments in an organization.
Inventory control vs inventory management track and manage stock. They also might use advanced inventory management software to help them do their jobs better.
Although inventory control is a part of inventory management, but the two areas have different objectives.
Inventory control tracks inventory daily while keeping an eye on trends over longer periods to inform purchase orders and forecasts for future needs by product lines or departments. In contrast, inventory management takes a more holistic approach that looks at several factors such as seasonal changes in demand, competitor actions and production output from suppliers before making decisions about how much inventory should be kept in stock.
Both practices use mobile devices for barcodes and radio frequency identification (RFID) scans so they can get precise real-time updates about current levels of supply/demand. They also might employ advanced software programs designed for this purpose to help them stay better than ever before.
Inventory Control and Inventory Management: Different Responsibilities
There are some differences between inventory control and inventory management as well. In most cases, a business or organization will have an entire department dedicated to inventory control while having one person handle the responsibilities of being an “inventory manager.”
An important difference is that in smaller organizations it’s common for people who hold several roles within a company to wear multiple hats when it comes to managing stock levels. For example, someone whose title may be customer service representative could also serve as the team leader responsible for maintaining spot-on supply levels at all times — including ordering products from suppliers on time so they don’t run out of stock
To Bring it Full Circle
Inventory Control = The management of inventory already in the possession of a company.
Inventory Management = Inventory control plus forecasting and planning for future inventory requirements, managing purchasing activities to ensure an adequate supply is available at all times, maintaining relationships with suppliers so that supplies will be timely and deliveries reliable when needed (e.g., time-phased shipment schedules), storage, protection against damage or loss while in transit or in-store; also includes disposal of excess stock and scrap materials.
The two terms are not interchangeable: “inventory” refers only to goods held by retailers until they’re sold/transferred whereas “inventories” can refer both to physical items as well as data about those items’ location, condition etc.
Schedule a demo today so we can see how inventory management & inventory control work at your company, and how we can make it even better! We can help you manage the entire supply chain with our best-in-class software, ZapERP Inventory that is available online or on mobile devices for added convenience. It’s a great solution for any business looking to improve its warehouse operations!
How to Choose the Right Inventory System for Your Company
Every company is unique in its own way, and equally has its unique needs which need to be fulfilled. When you set out to choose the “right” inventory management software for your business, here are a few steps that might help you to get started:
– Define your vision of inventory management by evaluating your basic needs. Analyse all the existing options, including your current inventory software (if you have one) and identify the gaps that you would like to fill. Determine which areas have a scope of improvement and what features you would like to have in your “ideal” platform.
– Identify the inventory management needs that will help you better achieve this vision. For example, if you want to improve on response time and customer satisfaction, then working with a system that provides more real-time data might be what you need. If however, your goal is to increase overall efficiency within each department or location, finding ways to integrate your systems may provide an advantage over other companies that still use manual processes.
– Prioritize these business functions which are most critical for meeting organizational objectives (for example cost reduction). Customer service comes in as one of the top priorities since it plays such an important role not only in building stronger relationships but also in increasing revenue via repeat sales/cross-selling
ZapERP Inventory – Manage inventory the smarter way
ZapERP is an inventory management platform that is completely built on the cloud and is designed to make inventory management easy and more flexible. The system works on a number of different levels:
– Inventory Management: Manage the entire process of inventory movement from procurement to delivery from a single platform.
– Loss Prevention: ZapERP automatically calculates reorder points when stock quantities reach a defined minimum level which helps your business avoid running out by allowing you to order just before this happens so there’s no disruption to your supply chain.
– Warehouse Management: Whether you have one warehouse or multiple, you can manage it all on the ZapInventory platform. Perform core functions that include; receiving goods, tracking stock and ensuring efficiency in storage.
– Order Management: The system will help you track your sales, orders, inventory, and fulfilment order rate. It starts when a customer places an order and ends once they receive their package or service. It allows a business to coordinate the entire fulfilment process — from order collection, inventory and delivery visibility to service availability.
…and many more features! Schedule a call with us today!