What is inventory management and how does it work?

Inventory management is an element of your supply chain that includes things like regulating and overseeing purchases — both from suppliers and consumers — stock storage, controlling the amount of merchandise for sale, and order fulfillment.

Naturally, the specific inventory management meaning for your organization will differ depending on the types of products you offer and the channels through which you sell them. However, as long as those essential parts are there, you’ll have a firm foundation on which to develop.

To keep track of inventory databases and make ordering decisions, small-to-medium enterprises (SMBs) frequently employ Excel, Google Sheets, or other manual tools.

Inventory management methods with these systems go beyond basic reordering and stock monitoring to include everything from end-to-end production and business management to lead time and demand forecasts, as well as KPIs, reports, and even accounting.