inventory management differs from general
warehouse management because it involves the
determination of how quickly to produce a
particular product. The factors involved in
many cases are similar, though there are some
variances in making the final decision as to
how quickly manufacturing should push items
through the production line.
Of course, the first concern in production
inventory management is on
the front end of the process. If you donít
have the materials required for production, then you
canít move forward in providing the products to
others. You must make certain that you have all the
supplies you need, from raw materials to factory
workers, to complete the production process.
Supply and Demand
You must determine the current demand for the product
on the market.
Good production inventory management
occurs when you produce just enough material to
satisfy customersí needs without overextending the
production line and manufacturing too many of any
You donít want an incredible amount of
back stock lying around, as this detracts from your net
On the other hand, you donít want to be in
short supply when a large order comes in, so having a
little extra on hand is a great idea, and making sure
you are prepared to make a production run for such
orders is vital.
Never simply assume that everything manufactured will
be flawless. An important consideration in production
inventory management is to allow room for error. In
other words, calculate a sufficient amount of product
to assume that, even with flaws that get past quality
control efforts, there is sufficient stock of the
In many instances, even the best production
inventory management strategies fail
in the long run due to the cost of the production
process being overlooked as a factor. It is important to
maintain a cost effective production process, and this
includes making sure that
your inventory is not an overwhelming factor. This
comes back to not overproducing any items that come
off the assembly lines. Doing so is a waste of time
and materials, costing you excess money to create.
Obviously, conservation of the materials, time, and
energy consumed in manufacturing unnecessary goods is
essential to maintaining a cost effective production
inventory management strategy.
Be proactive in keeping close watch on all occurrences
in your production or manufacturing facility to make
sure that there is no waste, and you are guaranteed to
achieve a greater standard of success and profitability.