Inventory management is required to monitor the goods and services of a company.If you do not know what is in inventory, then you cannot maximize your profits.When it comes to controlling inventory, there are two main systems that can do it.Those would be the perpetual and periodic inventory systems.They are updated in two totally different ways.This article will focus on the perpetual system.
The perpetual system is constantly updated.The system is update for when orders are shipped, placed or received.This is mostly possible due to technological advances that allow computers to be updated in real time.Bar coding is used to enter the correct information.The perpetual inventory system is well liked because the information is the most recent.You know that you info will be the most recent that is available.
But, humans can still cause errors.The information is only as accurate if it is entered into the system.Info cannot be analyzed if it does not reach the system.This is why the information must be updated constantly.
Obviously, all systems will have good and bad features.Because the reporting is done in real time, this is a huge benefit.For instance, sales personnel must know how much inventory is in stock before they can sell it to potential customer.This is especially true if the customer is expecting same day delivery.This information can be pulled from the salesperson's laptop or phone.The info is easy to get.It is a smart way to check inventory before placing a same day order for a customer and finding out that the product is not in stock.
In the past, the salesperson would have to get someone from the office to help him with this info.Many times this would have meant sending someone out to the warehouse in order to do an actual physical count of the inventory.For some companies, this might take hours.This explains why the perpetual system is so well liked.It cuts down on time.
There are not too many disadvantages of using the perpetual system. The main complaint is that it requires a hefty investment on the front end.The software is not cheap.However, most companies find the system very beneficial, once the software has been purchased and installed.Also, the system is always being updated, which is a hassle for the anyone entering the info.A lot of information has to be consistently feed into the system in order for it to work properly.
There are both disadvantages and advantages, but it is a great inventory management system.
The perpetual system is constantly updated.The system is update for when orders are shipped, placed or received.This is mostly possible due to technological advances that allow computers to be updated in real time.Bar coding is used to enter the correct information.The perpetual inventory system is well liked because the information is the most recent.You know that you info will be the most recent that is available.
But, humans can still cause errors.The information is only as accurate if it is entered into the system.Info cannot be analyzed if it does not reach the system.This is why the information must be updated constantly.
Obviously, all systems will have good and bad features.Because the reporting is done in real time, this is a huge benefit.For instance, sales personnel must know how much inventory is in stock before they can sell it to potential customer.This is especially true if the customer is expecting same day delivery.This information can be pulled from the salesperson's laptop or phone.The info is easy to get.It is a smart way to check inventory before placing a same day order for a customer and finding out that the product is not in stock.
In the past, the salesperson would have to get someone from the office to help him with this info.Many times this would have meant sending someone out to the warehouse in order to do an actual physical count of the inventory.For some companies, this might take hours.This explains why the perpetual system is so well liked.It cuts down on time.
There are not too many disadvantages of using the perpetual system. The main complaint is that it requires a hefty investment on the front end.The software is not cheap.However, most companies find the system very beneficial, once the software has been purchased and installed.Also, the system is always being updated, which is a hassle for the anyone entering the info.A lot of information has to be consistently feed into the system in order for it to work properly.
There are both disadvantages and advantages, but it is a great inventory management system.
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