Inventory Control: Inventory Management Systems

Topic: Logistics
Words: 355 Pages: 1

Inventory is essential to managers as it is often the most critical component of a company’s assets. Minding the importance of inventory, managers must understand how to minimize stock waste in order to maximize productivity and competitiveness. A prominent example of cost reduction through lean management is Toyota which and adopted lean manufacturing practices to eliminate operational redundancies (Muller, 2011). Lean manufacturing has been effective in reducing non-value-added practices.

The primary aim of lean inventory management is to reduce the amount of waste produced by manufacturing processes. Such an approach leads to saving a significant amount of expenses because there will be minimal to no waste materials, lower storage costs, and no losses from deadstock generation. Traditional barcode systems require an operator to scan and position an object individually, so lean management saves money on labor. RFID can collect data without the need for human interference (Chongwatpol & Sharda, 2013).

JIT’s most fundamental principle is to closely match inventory and output with demand; it only stores and uses the resources required to meet current and planned orders. JIT allows inbound trailers to move products directly to outbound trailers in certain techniques, enabling a well-established distribution network to operate at scale (Chen et al., 2013). JIT allows merchants to keep a minimal amount of stock supplies on reserve, balancing operating expenses and avoiding stock-outs in the event of a sudden increase in demand.

Thus, by implementing inventory management systems, businesses significantly accelerate their operational processes and simultaneously reduce cost on many cost-consuming operations. Modern technology allows enhancing the methods of conducting large, complicated procedures, turning them into a single management program that benefits both companies and their clients (Films Media Group, 2008). However, the proper execution of these management practices is not possible without the correct alignment of in-house activities.


Chen, J. C., Cheng, C.-H., Huang, P. B., Wang, K.-J., Huang, C.-J., & Ting, T.-C. (2013). Warehouse management with lean and RFID application: a case study. The International Journal of Advanced Manufacturing Technology, 69(1-4), 531–542. Web.

Chongwatpol, J., & Sharda, R. (2013). Achieving Lean Objectives through RFID: A Simulation-Based Assessment*. Decision Sciences, 44(2), 239–266. Web.

Films Media Group. (2008). The transformation age: Surviving a technology revolution with Robert X. Cringely. Films on Demand. Web.

Muller, M. (2011). Essentials of inventory management. New York [Etc.] Amacom.

Reyes, P. M., Li, S., & Visich, J. K. (2016). Determinants of RFID adoption stage and perceived benefits. European Journal of Operational Research, 254(3), 801–812. Web.

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