TECHNIQUES OF INVENTORY CONTROL
Aims and objectives of inventory control:
1. Supply constant flow of materials to the operation – items needed for production, maintenance, engineering and distribution should be in stock and ready for use.
2. Ensure correct quality of stock required – inventory control is responsible for ensuring that the correct type and quality of stock needed is always available for operation. The user, purchasing and quality control will set the type and quality of the required. It is up to inventory control to ensure that specifications set is the one that stores will issue.
3. Distribute stocks – this can relate to both pre-production and finished stock. It is the aim of inventory control to ensure that goods needed for operation are at the point of consumption.
4. Supply information for control of production – inventory control has to advice production planning about what to produce in order to keep up established levels of the organization finished stock and must also advice on the amount of production, maintenance and distribution that can be carried out in the light of the working stock held.
5. Control obsolescence of stock – inventory control ensures that all stock held by the organization are used at regular rate and therefore has not been superseded by new or redesigned item. It can happen that item in stock are made redundant by changes in design, technology and the law.
6. Control stock rotation – stock rotation is the process of consuming materials in the correct order and in accordance to their shelf life or sells by date. This ensures that all stocks issued are in correct condition. Other activities include:
- Determining of limits of inventories to be held
- Determination of inventory policies.
- Follow up to examine the working of inventory policy and effecting changes as and when needed.