Managing inventory is an important task faced by processors today and is a key contributor to company profitability.
What is inventory?
Inventory is the term for the goods available for sale and raw materials used to produce goods available for sale, and is listed as a current asset on a business’s balance sheet. Knowing how much stock you have, where it's located, and where it’s going helps determine inventory turnover; a key metric for evaluating revenue generation.
Developing an accurate value for the balance sheet requires either a physical inventory count or a dynamic inventory management system.
What is inventory management, and why is it necessary?
Inventory management is the tool used to organize, optimize, and — most importantly — track all of a company's raw and finished products.
Tracking inventory is not only a best practice for running a successful business; it’s necessary for compliance with SEC regulations and SOX for public companies. Companies are required by law to show a well-documented, understood, and controlled supply chain as a part of this compliance.
The best inventory management systems not only track inventory, but also provide actionable insights and data useful for making more informed business decisions, such as identifying low and high-performing products and notifying invested users prior to stock outs. Because there are numerous types of systems and methods for counting inventory, an inventory management platform is a helpful tool to ensure best practices.
What exactly is an inventory management platform?
An inventory management platform (IMP) is an organized approach to freeing up cash through proven experience, demonstrable results, and adaptable approaches that work for any size organization. Through this process companies will have access to structured cash flow optimization opportunities. It is a tool to achieve corporate, departmental, and personal goals, as well as KPI’s.
Additionally, enhanced balance sheet metrics allow organizations to make decisions and adapt to changing markets. Improving cash flow creates a competitive advantage and reduces opportunity costs. This results in increased liquidity that could be used for investing in new technology and purchasing new assets.
Is an inventory management platform the right choice for your company?
Traditional methods explore only unit (SKU) expense reduction through a variety of bid and fact gathering methodologies. They have no way to capture or generate sustained results after the first year of use.
JRW’s Inventory Management Platform focuses on four key levers — inventory reduction, transportation optimization, ingredient consolidation, and automation and technology.
So, what makes the JRW Inventory Management Platform stand out from other solutions in the industry? Consider these four factors:
- This platform defines the importance of cash flow and the many possible areas your company can improve on this front.
- It emphasizes behaviors and needed responsibilities to adopt the platform.
- It provides an action plan and road map for the process.
- It presents achievable metrics, mutual expectations, and prioritization on implementation.
There are several qualifiers and focuses necessary to achieve results, including:
- A focus on total cost of ownership vs. “best price”
- Defined department(s) in charge of inventory
- Known end customer ingredient requirement
- Company commitment to specify priority and timeline
- Mutually aligned expectations on defining success
Interested in seeing how JRW's Inventory Management Platform can benefit your organization? Sign up at the bottom of this page to be the among the first to receive the brand-new JRW Inventory Management eBook once it's released.