For most companies that manufacture products, inventory management is a really big deal. And while many people go through advanced study in inventory management, we tend to view it a little more simply:If you overstock, it ties up capital that could be used more effectively somewhere else, and business owners know that cash flow considerations are not to be taken lightly. On the flip side, you have inventory on hand when someone is ready to buy.If you understock, and don't have products on hand when someone wants to buy, you run the risk of them going elsewhere. You might even run short of materials and have to halt production while you restock. These are not good things.ISO's Stainless Steel Banding Inventory As business managers, we've decided that ISO Stainless will always maintain inventory of our products so that we can ship to you when YOU need it, not when it's most convenient for us.However, there's more to managing inventory than simply keeping a lot of product on hand, so let's take a closer look at some of the considerations.Return on AssetsMaintaining the "ideal" number of items on hand that you need for production gives you the greatest return on your total assets. This can be a large item on your balance sheet, and a lack of inventory can cause catastrophic losses, according to an article by KRE Publishers.Planning for inventory needs must be properly done, by looking ahead to determine in advance the quantity of items that must be ordered, and the frequency at which they are ordered.Once you've set your order, the ongoing stock of vital goods needs to be monitored to help you decide when to order again based on facts and data. An optimum inventory investment keeps costs at their minimum, by not tying down capital by purchasing too much inventory.Impact on SalesSome people are willing to wait for their products, while others will not.Inventories that are improperly managed can definitely affect your sales by potentially losing one time sales as well as long term relationships, especially if you operate in a competitive industry.You must keep excess inventory to avoid downtime and to keep customers from heading to your competition, without keeping so much on hand that you run into lack of capital for other investments in your business income.What's Most Important To You?In business, as in life, there's opportunity cost no matter what you do.When you manage inventory, you have the cost of having product on the shelves versus the cost of potentially losing a sale.Some of our competitors choose the "order and wait" route. But at ISO, we're committed to giving our customers what they want, and that means always having ample product on hand.
