Inventory Management and Asset Management are the two primary aspects of business techniques. Inventory Management deals with tracking the stock details that a company sells, and purchases from time to time during its operation whereas, the Asset Management tracks the assets of business of all types from fixed to floating or tangible to intangible in nature.
Both are interrelated to one another as they play effective roles upon each other for business growth.
Main purpose of inventory management is to ascertain the quantity of stock on hand so that there shouldn’t be any shortcomings in satisfying its valued customers. Inventory of a business constitutes raw materials, work in progress, finished goods and operational and maintenance expenses over a period of time.
Implementing Asset Management techniques in businesses is like bringing the entire operations under one secured umbrella. In fact, Asset Management is a broader term which on its course of application brings in a careful analysis of data of inventory. In particular Asset Management audits and controls the resources that are used by organisations for manufacturing a product or services periodically.
So implementing an Asset Management strategy empowers business units to have a constant check on its entire inventory operations and helps drive to its optimization levels. They can be understood in following ads:
Acquiring Inventory Efficiency:
This enables businesses to procure and maintain stock well in tune with purchase order to meet its valued customers’ needs and prevent loss of goods or loss of value of stock due to market fluctuations. Similarly, have an eye on overselling of products which in turn affect the cost and expenses incurred by the company.
Provide Savings and Security :
The existing stock and other accessories require time to time guidelines to protect from theft, fire or any other eventualities. The Asset Management through its constant auditing empower the business entities to achieve complete accuracy on the stock value, losses against price fluctuation, damages or repairs.
Study Market Operations:
Constant monitoring of the market operations helps guard the current stock position, need for procurement of raw materials against a high demand or reduce the stock in accordance with the diminishing demands in the market. This strategy helps in reducing risk of excessive stocking, stock shortage and from other negative impacts. This registers a good profit to the organisation leading to higher inventory turnover.
Increase Productivity:
By offering timely knowledge management skills, building up good awareness among the entrepreneurs and staff makes one to be abreast with market conditions and overcome any casualties. This in turn increases productivity.
Create Prospective Insights:
Due to constant scanning and supervising the A to Z operations of the organisation, the company gets an edge over its inventory control keep a guard on its overstocks, under stocks or obsolete stocks and entire life cycle of inventory. This paves for better insights profiting the organisation.
This way a well laid Asset Management report inculcates disciplinary steps in its inventory management and allows businesses to make profit and help sustain for longer duration.
