What is Inventory Management?
Inventory management in procurement is the systematic process of overseeing and controlling the inventory of goods, raw materials, and finished products in an organization. Its objective is to prevent excessive inventory or stockouts by effectively managing the processes such as ordering, storing, tracking, and optimizing inventory levels throughout the supply chain, from manufacturers to warehouses and end customers.
The primary goal of inventory management is to ensure that the right quantity of items is available at the right time and in the right place. It helps achieve cost savings, improved operational efficiency, mitigate risks, and strengthen supplier relationships.
Just-in-Time (JIT), Vendor Managed Inventory (VMI), and Customer-Managed Inventory (CMI) are popular inventory management models used by organizations to gain better control over inventory management.
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