Why optimize inventory management

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Optimizing warehouse stock management is crucial for several reasons. Firstly, it reduces the costs associated with storage, warehouse maintenance and dealing with suppliers and customers, which translates into greater profitability for the company. Introducing improvements in warehouse processes contributes to a better use of resources such as space, working time or equipment, which translates into greater efficiency for the company.

Taking stock control into account, proper kuwait email list management allows the company to maintain an adequate level of products in stock, reducing the risk of stock-outs and avoiding unnecessary excess merchandise. As a result, the company is better able to meet customer expectations, which translates into greater customer loyalty and satisfaction.

Inventory analysis and monitoring facilitates demand forecasting, which in turn enables more effective planning of supply and resource utilization. As a result, the company can react more quickly to market changes and adapt to the needs of its customers.

What is ABC/XYZ Analysis and what is it used for?

ABC classification is very often used in warehouse and inventory management. It allows to distinguish the materials that will be most relevant for the company. Dividing materials into appropriate groups is very important for the efficient operation of the company. The ABC method can be extended to include XYZ classification, which is necessary to examine the regularity of material consumption.

The above analysis is a kind of extension of the Pareto Principle, developed in 1951 by the American management theorist Joseph Juran and named after the Italian economist and sociologist Vilfredo Pareto. According to this principle, 80% of wealth is held by only 20% of society. Of course, these proportions are not so rigid and in reality they deviate from the 80/20 value much more often. However, the above principle is reflected in many areas of life.