Answer to Question #296181 in Management for Shweta

Question

Discuss the various inventory management/control techniques prevalent in the industry.

Discuss how some of these techniques would be applicable to a retail store in the FMCG

sector for effective management of their inventories; i.e soaps, household supplies, etc. (you can assume inventories of your choice to explain)

Answer 1

The most common inventory management techniques include; Just-in-time (JIT) inventory which involves holding as little stock as possible, negating the costs and risks involved with keeping a large amount of stock on hand, ABC inventory analysis, Dropshipping, Bulk shipments, consignment, Cross-docking, and cycle counting.

Bulk shipments

This method banks on the notion that it is almost always cheaper to purchase and ship goods in bulk. Bulk shipping is one of the predominant techniques in the industry, which can be applied for goods with high customer demand like grocery supplies.

ABC inventory management

ABC inventory management is a technique that’s based on putting products into categories in order of importance, with A being the most valuable and C being the least. Not all products are of equal value and more attention should be paid to more popular products.

Inventory Cycle counting

Cycle counting or involves counting a small amount of inventory on a specific day without having to do an entire manual stocktake. It’s a type of sampling that allows you to see how accurately your inventory records match up with what you actually have in stock.