The whole process of managing inventory is complicated and has many different steps to it. You not only need to manage stock itself, but also all the daily activities that come with it. This is where inventory management and inventory control come in. While the terms sound similar to each other, they have key differences. Let’s take a look at their meaning and what are the differences between inventory control vs inventory management.
What Is Inventory Management?
Inventory management is the process of managing the flow of inventory throughout the supply chain. It’s responsible for managing inventory from the point of order from a supplier to the point of selling to a client. Additionally, it also manages the relationships with suppliers and clients. By implementing an inventory management strategy you can optimize the supply chain, reduce costs and improve customer service.
Inventory is the most important asset for a company. For most companies, like retail, it’s the core of the business. If there isn’t enough stock available at hand, issues like customer dissatisfaction come up. On the other hand, if there is too much inventory available, this results in increased holding costs. For these reasons, inventory management is needed as well as necessary for businesses that deal with stock.
What Is Inventory Control?
Inventory control is the daily process of monitoring inventory levels across different locations. The goal of inventory control is to ensure that there is enough inventory available when needed depending on demand. Inventory control is responsible for decreasing the risk of overstocking as well as understocking. It helps to minimize the amount of inventory that is held by a company, therefore decreasing holding costs while also keeping enough inventory at hand.
Inventory Management System
An Inventory Management System is a software that helps you manage your inventory in a better and more efficient way. While using spreadsheets and other tools to manage inventory might seem like a good idea, businesses that deal with a fair amount of stock should use an inventory management software. This tool can reduce human errors, enhance productivity and efficiency, reduce costs, and is less time-consuming. Additionally, you can restrict employee access to certain data, therefore achieving data security. Lastly, you can have greater visibility of your stock with real-time data and make decisions based on the data it can provide you.
Inventory Control System
An Inventory Control System is a tool that helps in monitoring inventory levels and automates a lot of manual processes. It provides a better picture of how much stock is available, where is it located, and when there is a need to order more. Additionally, it manages the day-to-day stock and warehouse activities. An inventory control system can warn when there are low stock, overstock, and expiring items. It also sends notifications when there is a need to reorder products. Also, it tracks real-time inventory transfers as well as the movement of orders and returns.
What Are The Differences?
Now that you know what inventory control and inventory management are, it’s time to see the differences between inventory control vs inventory management. While the two terms are not synonymous, they are related to each other.
Specifically, inventory management is the broader term that consists of inventory control. Inventory control is responsible for the daily tracking and organizing of inventory, counting stock, and helping keep the right amount of inventory. On the other hand, inventory management is responsible for predicting demand, managing stock from the point of order to selling, tracking inventory turns, and determining when to reorder inventory. Since inventory control tracks the daily movement of inventory, the data it exports is used in inventory management. Therefore, it helps inventory management take better decisions for the future.
Lastly, inventory management is a proactive process whereas inventory control is reactive. This means that inventory management focuses on preventing and eliminating issues before they have a chance to appear while inventory control deals with issues after they have happened.
To sum up, the two terms are not synonymous but they are related to each other. Inventory management consists of inventory control and depends on it to take the right decisions. The main goal of inventory management is to optimize inventory levels in the long run while inventory control monitors and adjusts the inventory levels daily. Also, one of the main objectives of inventory management is to maintain good relationships with suppliers and clients. While inventory control can affect those relationships, it doesn’t deal with them directly. It mainly focuses on tracking inventory inside the warehouse as well as in other locations.
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Klaudia Brudnowska is a Digital Marketer at Megaventory, a company that provides cloud-based software for inventory management. She is creative, enjoys creating content, and aspires to learn about new digital marketing techniques.