![]() Honestly, this is mainly a matter of personal preference and shouldn’t lead to trouble.īut minor distinctions can be made, so you should be aware of those too. Many business owners and retailers use both terms interchangeably - some note that inventory is used more in US English and stock in UK English. Whether there is any difference between inventory and stock has been the root of much unnecessary confusion. The difference between inventory and stock Live inventory man agement software helps you keep your inventory information up to date and free from human errors. It’s the whole reason that recording and tracking inventory digitally became a staple as soon as it was possible. You need to look for the right tools to help you tame it. Then it becomes clear that keeping track of your stock is not something you can force. Understanding that inventory is dynamic and fluid is the first step to attaining good inventory management. Inventory can be like a sneaky shapeshifter that always finds a way to slip out of your grasp before you get a full hold of it. That’s one of the main issues businesses often have - dealing with the constantly moving pieces of raw materials and the finished products themselves. You could have all kinds of different waxes being used to make a variety of candle shapes. Unfortunately, these progressions aren’t always so simple and linear. And, of course, the finished good would be a fully formed candle with a wick on top, ready to burn for a cheesy romantic dinner. Work-in-progress would be colored or shaped wax. Raw materials would be wax, wicks, and colors. Let’s look at the example of making candles. MRO inventory - Maintenance, repair, and operations supplies needed to keep production running.Finished goods - Products that are completed and ready to be sold.Work-in-process - Items in the process of becoming finished products.Raw materials - Components that can be used to create products.You could break down the types of inventory into the following: Regarding materials directly related to your production process, it includes items ready to be sold and items you intend to sell in the future. That means looking at all the bits that go into getting your products made. ![]() We believe it’s more helpful to think of inventory as the sum of all items used in your business intended for sale. This includes anything related to the operations of your business, such as safety or office equipment. ![]() Some offer an interpretation that refers to inventory as the sum of all items used in your business. There are many definitions of inventory out there. Defining inventory - it’s much more than just your finished products Once we unpack these a bit, the inventory management definition should come into focus. In this case, we must understand what inventory really is and the aims and objectives of solid inventory management. At best, you’ll always be one step behind the leaders, at worst, they might take you over a cliff. ![]() Otherwise, you’ll end up following others blindly. It includes the systems and processes companies use to track their inventory and determine when to order more.īefore diving into the details, it’s always best to get to grips with the fundamentals. Inventory management is the science and art of ordering, storing, and using a company’s inventory - the materials and components a business sells or uses to make its products. ![]()
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