Inventory management is something that many organizations struggle with, and oftentimes it’s because they don’t know how to effectively track their assets. So, let’s examine three common systems that allow you to monitor and manage your inventory, and how each can affect organization.
Just-in-time inventory system
This system operates just like it sounds – the organization maintains a very low level of inventory and orders more “just-in-time”, as needs arise. While this can be very effective at keeping inventory levels (and therefore costs) down, it can also lead to longer service time for equipment, lost business due to out-of-stock materials, and more.
Periodic inventory system
A periodic inventory system calculates the amount of inventory that is on hand on a regular, recurring basis (each week, month, quarter, etc.). Typically, this style of inventory management requires staff to take a manual count of inventory each period, making it an ideal solution for small organizations that don’t require a lot of staff, or organizations that sell very few items (Ferrari, for example).
Perpetual inventory system
A perpetual inventory system differs from a periodic system in that it tracks inventory in real time. As soon as an item is used, or added, its quantity is immediately updated in the inventory management system. This type of system reduces the likelihood of running out of inventory and tends to save organizations money in the long run.
How FMX can help: If your organization is struggling to maintain proper inventory levels and you think the next step is an inventory management system, we can help! FMX will alert you when you reach the minimum quantity level for an inventory item and predict how much you should order based on items you’ve used in the past week, month, or year. Learn more about our inventory management feature.