![]() Inventory that doesn't sell is typically called dead stock. However, decoupling is when stock is kept separate, so this doesn't occur. Decouplingĭecoupling refers to the additional items, or WIP, kept on hand to prevent production line hold-ups.įor example, inventory used by one stage of a manufacturing line might slow down other parts of the process. Cycle inventoryĪ business might order cycle stock in phases to help them get the right level of inventory at the lowest storage price. For example, when supplier shortages occur or you experience a surge in customer demand, safety stock may enable you to fulfil orders. ![]() Safety stock is additional inventory kept by a business to manage unexpected events. Maintenance, repair and operating (MRO) inventory refers to the items used to manufacture goods - for example, machines and tools. Work-in-progress (WIP) inventory consists of unfinished goods and raw materials moving through the manufacturing process. Examples of raw materials include oil to make soap, wood to make furniture, or paper to make books. Raw materialsĪ company uses raw materials to create or finish products to sell. These are the various types of inventory: Finished goodsįinished goods are the items you have created, assembled, or packaged that are ready to sell to the customer. ![]() What are the different types of inventory? It follows the movement of goods - from raw material to sale - with the goal of ensuring a company has the right amount of inventory on hand at the right time in the right locations to meet customer demand, lower holding costs and minimise waste. ![]() Inventory management is the process of purchasing, storing, using, selling and tracking a company’s inventory. An inventory management system is crucial for success as it provides a business with detailed insight into the financial health of their enterprise and helps keep proper stock levels to serve customers better.īelow we discuss inventory management, how it can best serve your business, and why you should consider investing in an intelligent stock management system. ![]()
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