The influence of inventory on company's productivity

Author: Iloka Benneth hiemelie

Published: 4th April 2017

In every aspect of one’s life (whether it is on the individual or corporate level), there is a need to adopt quality inventory management. Inventory management does involves monitoring the in-flow and out-flow of resources in such a way that what is needed production is always available. In the modern business world, increased competition and variety of goods and services entails that the first to arrive is the winner of the market. This increased demand for faster product and service delivery means that inventory management has become more significant and important. As a professional, inventory management has been useful to me and its usefulness is actually expected to increase in the near future. It is virtually impossible to maintain a successful professional level of career development without adopting necessary management of inventories in the process. There are significant number of reasons why inventory management is important to my professional life as: it will help me to deliver desired business outcome, it will help me to manage minimize expenses and maximize profit, and it will help me to more productive.

The influence of inventory on productivity of any given organization can never be overemphasized. Take for instance the case of a manufacturing, with an increase in product order but has no available resources for production due to poor management of inventory. Such firm will experience decrease in production as it will not be able to manufacture without necessary raw materials. As such, inventory management will help me to be more productive in the future as a professional because it will: 1) allow me to know the necessary raw materials needed for production; 2) highlight the stages of production the raw materials are needed; and 3) help maintain sustainable stock of such raw materials. For instance, if I work in a production firm that manufactures beverages, inventory (order inventory) will allow me to know the volume (in cartons) of product needed. From such order, I will be able to reference the warehouse (warehousing inventory) to know if the required raw materials are available in the volume needed. In cases where raw materials are not enough, I will be able to purchase prior to production. Essentially, productivity will be enhanced (both on individual and team level), as I have necessary raw materials for production in desired volume.

Secondly, inventory will help me to minimize expenses and maximize profit. Through production inventory, I will be able to analyze suppliers based on their “best fit” features. This reflects their ability to supply raw materials at affordable price and high quality. Additionally, inventory will allow me to determine volume of products available at my distributors’ outlets and resupply in time to ensure that their outlets never goes out of stock (for my products). Therefore, by sourcing quality materials at affordable costs which will allow me to produce quality products at competitive or cheaper prices) and ensuring that my products (never goes out of stocks) are always available, I will be able to able to minimize costs and maximize profit in the process. Thus, inventory management is essential when it comes to meet desired performance outcome of increased profitability in my future works.

Finally, inventory management will help me to deliver desired business outcome in my future works. Generally, the business of any given business of described as business. This implies that no company goes into the market without expecting to make profit and remain sustainable. That is the major purpose for establishing corporations (be it for profit or not for profit companies). There are countless factors that influence the performance of corporations but these factors can be grouped into external and internal. External factors relate to elements of corporate process that exist outside of the company, while internal factors reflect elements of the corporate process that exist within the organization.

Manufacturing inventory helps to understand what is needed, retail inventory regulates supply, service inventory controls service delivery functions, and all these inventories are necessary when it comes to benchmarking performance of the organization. Continuing from the case of manufacturing firm as discussed above, inventory management will help to monitor manufacturing, supply, post sales, and performance functions of the company. As such, it will help me to benchmark my performance by understanding factors that influenced positive performance and enhance such future in the future business process.

Evidently, inventory management is of great importance in my future professional performance. This is because it will help me to deliver corporate goals of increased performance, help me to minimize expenses and maximize profit, and help me to be productive. As such, it can be concluded that inventory management is an integral aspect of any organizations’ sustainable business operations and profit maximization as it allows both the company and staffs to set prospective benchmarks that will be used to increase their overall performance – in both short- and long-run bases.