The Key Differences Between Inventory Management and Inventory Control you Should Know

Inventory is the essential investment of a business. It is a vital asset, and every business should know the quantity of inventory present and its worth. As the profit generated from the inventory is the primary source of revenue for the company, it is crucial to employ practices to manage the inventory effectively. Inventory management and inventory control are two such practices that every business should perform for efficient and more profitable handling of stock.

Inventory management and control are usually interpreted as the same thing, but the reality is quite different. One deals with the whole process starting from ordering, managing, and maintaining inventory to ensuring their timely availability, optimum level, and storage, while the latter deals with the stock present at the moment or in-hand. Let’s discuss both of them in detail.

What is Inventory Management?

Inventory management practice helps in systematic and productive stock management by accounting, storing, and monitoring inventory in-hand as well as ordering the stock for the future through demand forecasting. More precisely, it deals with the management of raw materials and finished goods, storage, and processing. It ensures that the inventory required, to meet present demand, is at an optimum level by predicting future needs with the help of historical data and previous trends.

Earlier inventory management was done manually, but now Inventory management software has taken its place. It is used to automate as well as streamline the inventory management process. The software keeps track of inventory and gives you real-time updates regarding the location of items and their quantity. It counts or audits the inventory consistently with better accuracy and maintains records. Some of the popular inventory accounting methods include cycle counting, perpetual counting, periodic counting, etc. With the feature of demand forecasting, it helps businesses in product replenishment to meet the future market demand. It automates the process of reordering. Moreover, inventory management software also improves the transparency of the supply chain by providing real-time information and insight into the location of finished products and raw material within the supply chain at any time. This feature is essential when the business is vast and global. It’s also incredibly useful for police stations when it comes to evidence management.

What is Inventory Control?

Inventory control mainly deals with managing the inventory in-hand or say present in the warehouse. It manages, monitors, and tracks the inventory present in storage and counts it consistently. Inventory control’s primary function is to locate the items in the inventory and maintain their quality by keeping check of temperature and other factors in the storage area. Inventory control eliminates the loss due to stock getting outdated or products stored for a long time reaching their expiry by taking appropriate measures and queueing them first for sale. 

Just like inventory management software is used for inventory management, inventory control software is used for automating the inventory control process. The software helps businesses maximize the profit that can be derived from the existing inventory. It helps in reducing losses by eliminating situations like inventory shrinkage, overstocking, and understocking. It also recognizes slow-moving and fast-moving stock and thus helps the management make decisions that further help in optimizing inventory spaces.

Difference between Inventory management and Inventory Control

Although Inventory management and Inventory control sound similar, there are many differences between the two:

1.Inventory management refers to the steps taken for effectively managing and maintaining inventory, predicting the inventory demand and product replenishment. Besides, inventory control takes measures to regulate the stock in-hand, works on maintaining quality control and optimizing storage space.

2.Inventory management software tracks and counts the inventory consistently, and using records, seasonal trends, and other data analytics forecasts future demand, thus easing the reordering process. On the other side, inventory control software focuses on the inventory present in the warehouse. It regulates the inventory as well as monitors their surrounding conditions to ensure that quality remains optimum. 

3.The main difference between inventory management and control is that the former focuses on both present and future inventory. In contrast, the latter only focuses on regulating the stock already present in the warehouse.

4.Inventory management software tracks and monitors items in the inventory and the supply chain to ensure correct product deliveries and enhance visibility in the chain, whereas Inventory control only tracks in-hand inventory and has no role in supply chain management.

5.We can say that inventory management works on a larger scale and covers the supply chain, whereas inventory control on a smaller scale focuses only on the warehouse.

Both inventory management and inventory control are necessary for effective inventory handling and generating profits. With strong management and control software, businesses can quickly achieve the most out of their investment in terms of benefits and productivity.

Wrapping Up

Inventory management and control sound similar, and most of the functions they perform overlap like tracking, auditing, and optimizing inventory and storage space. Still, they shouldn’t be confused as one, because inventory management has a broad range and deals with various business operations, starting from inventory handling and optimization to the supply chain management. On the other note, inventory control has a comparatively lower range and deals with warehouse and regulating inventory present. One thing to note is that both systems or practices are essential for better management of the inventory; thus, both methods should work in conjunction with each other.