Call our team +44 (0) 207 566 3939

BLOG

Inventory management – a key operation in the development of SMEs

The importance of inventory management

Inventory management is an operation that Small and Medium Enterprises (SMEs) should not exclude from its sales strategy if you want to generate profits and avoid economic losses.

Inventory management is the efficient handling of raw materials, manufacturing phase items and finished products. This process requires the involvement of the entire corporate structure, in order to perform specific actions and to facilitate proper handling of the goods.

Here are the kinds of tasks that each corporate division must run to meet that goal:

1. Procurement. This sector is responsible for relations with suppliers. The duties are:

a) Check the availability of delivery agents by type of manufactured item.
b) Manage the delivery time of the requested orders.
c) Negotiate the price of inputs.
d) To process credit with suppliers and define their terms.
e) Report the difference between the prices of inputs to cash and credit.

2. Production. The request for purposes of inventory management is to provide information on the number of items that can be manufactured every day and spending inputs required for that process. This area is also responsible for recommending the use of racks or shelves for storage of merchandise.

3. Storage. This segment must be designed and the necessary space to store supplies and products to be installed, depending on the goals and production requirements.

4. Finance and Accounting. The objectives of this department are:

a) Valuing inventory, determining production costs and defining sales prices.
b) Determining the prices of finished goods on credit.
c) Assess the availability of resources to purchase inputs and store all types of inventories.
d) Define the right time to hire financial solutions such as Credit Card Working Capital, designed to meet operational needs as inventory management.
e) Calculate inventory turnover and create strategies for managing surplus or missing supplies.
f) To establish the balance between revenues and expenditures associated with the handling of goods.

5. Administration. This division is responsible for plotting escape routes to the unexpected, such as the absence of a supplier, the lack of key inputs, production equipment failure, reduction or the occasional increase in productive capacity.

6. Sales. This department is responsible for establishing direct contact with consumers and implementing strategies for placing manufactured products and even agree to acquire items in progress.

Read more helpful and insightful articles brought to you by Robert Carter from Your Virtual Office London on our startup and business blog.

Related Category Posts

Certificate of Incorporation: How to Get a Replacement

Certificate of Incorporation: How to Get a Replacement

After you register a company, advisably through a company formations agent who can competently manage communication with Companies House, you will receive the all-important certificate of incorporation. Depending on how you registered your company,...

read more
This Is Why You Must Perform a Company Check

This Is Why You Must Perform a Company Check

Before you conceive a company name, it’s imperative to check if your desired company name is available — running a search on the Companies House name availability checker will return this basic information. But your relationship with Companies House’s online checking...

read more
Your Company Registration Number Explained

Your Company Registration Number Explained

You’ve spent years trying to launch your business. You’ve finally got a registered office address. And now you’re ready to drive your business in earnest. At this overwhelming stage you must be sure you exercise a comprehensive filing system to remedy any...

read more

Capital Office Ltd is registered in England and Wales: Registered Address: Kemp House 152 – 160 City Road London EC1V 2NX

Company Number: 06294297 | VAT No: 976201416 | ICO No: ZA084808 | Anti-money laundering registration number: XZML00000125126

© Copyright 2019 Capital Office Ltd - All Rights Reserved

Please click here to view the latest businesses using our address without authorisation.