Every modern organization of today recognizes the importance of an efficient inventory management, especially the big players in supply chain management such as Wal-Mart. With extensive use of information technology in each and every corner of our lives, inventory management is also under the influence of the IT revolution. Many FMCG’s and supply chain companies use advanced inventory management strategies that involve the use of highly advanced technology and software. Have a look at some of modern techniques of inventory management:

Originally used by Japanese automobile giant Toyota for optimizing their production process while reducing inventory. JIT is one of the most popularly practiced approaches used by many organizations. It involves saving an exact amount of materials which are needed at present thus ensuring almost zero inventory with minimum lead time.

Barcode Scanning Tracking
It is another technique to achieve total inventory control and management. Previously there was no such foolproof method that used to keep an exact track of inventory items. But, now, barcodes are exclusively used in supply chain or production areas which can be scanned by barcode readers. Reading then sends to central control unit regarding the product details, and updating various details about product.

Material Planning
Material requirements planning or particularly known as MRP is widely used approach in manufacturing plans to systematically plan the various requirements of production in future either monthly, quarterly, half-yearly or yearly depending on the size of organization.

RFID (Radio Frequency Identification)
Use of RFID is an advanced technology to increase equipment inventory and business process visibility. It helps to accurately track the location and exact count of materials and store them in central database which offers a bird’s eye view on inventory levels in organization. Hence, it empowers the users to make informed decisions based on facts.

Vendor Managed Inventory
Vendor managed inventory or VMI is a technique where the inventory storage is the responsibility of vendor or supplier of goods for optimizing the inventory held by distributor or user of goods. This is done with the help of communication link over the internet that provides vendor with the necessary data to plan inventory and place orders. This can result into better inventory accuracy forecasting.

Sometimes due to unpredictable and dynamic nature of markets nowadays, these techniques should be used cautiously. Since incorrect forecast can lead to excess inventory.