Inventory management is not only applicable when the economy is in recession, but also an enterprise management component that must be valued by the company at any time. In addition to fixed assets, a company has a large number of liquid assets, and the inventory part plays a decisive role in current assets. In the general situation of destocking, how can companies allow themselves to be more comfortable in the market?
A company's inventory takes up liquidity. When the company's efficiency is not good, cash flow is reduced. Increasing the quick ratio of liquid assets can improve the efficiency of the use of total assets. The crux of the excess inventory of finished products is the unsalable products, that is, the finished products are not right. For such companies, their thinking still stays in making products to sell, rather than what companies need to do in reverse. In other words, the root cause of excessive corporate inventory is that they are doing sales rather than marketing. Stocks appear to be piles of products in the warehouse. In fact, the product itself has problems. Therefore, to carry out market-oriented strategic inventory management, that is, adopt a push mechanism based on market demand. To solve the problem of excessive inventory, the most important thing is to grasp the market, otherwise the products that are made will certainly be a backlog.
These enterprises must strengthen basic management, including 5S management, ISO standardization management, and establish a stocktaking inventory system. Conditional companies must implement ERP for electronic inventory management, establish a computer inventory management system, and conduct real-time and dynamic understanding of inventory. Any purchase must pass this link to determine the company's safety stock and economic order quantities. This not only avoids shortages, but also minimizes inventory costs. For the use of raw materials, we must adopt the principle of first-in-first-out, otherwise the raw materials purchased in the early days are easy to expire and be scrapped.
In addition to establishing and improving the inventory management system, enterprises have some strategies for reducing inventory. For example, inventory management also requires the cooperation of the corporate financial department. Some companies' financial management is only accounting accounting and has not been transferred to management accounting. The financial department and the management department lacked a contact mechanism, which did not play a role of supervision and guarantee for the company's inventory. Many SMEs' purchasing departments have great powers, and the technical departments and quality assurance departments are not involved in them. Therefore, it is easy to cause unqualified raw materials and generate inventory. In enterprise procurement, the procurement department needs to form a linkage mechanism with the sales department to manage the procurement in a centralized manner, with clear separation of powers and responsibilities, and mutual checks. The finished products are delivered by the sales department. The raw materials in transit are the responsibility of the purchasing department. Such procurement can fully integrate with the market and reduce inventory effectively.
In addition, the sales department and other siblings should participate in inventory management and establish links between companies and suppliers. Many SMEs do not have a long-term relationship with their suppliers. They usually buy from where they are cheaper and when they are cheaper. Such a lack of planned procurement may be cheap for a short-term purchase, but they do not consider the use of funds. Blind-eyed blind purchases will lead to excess inventory, and raw material differences between different batches and different sellers It will lead to unstable quality. Enterprises should establish long-term strategic partnerships with suppliers and implement strategic procurement.
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