Inventory

The inventory could be useful for a longer period. It is necessary to store the material properly to have that perishability.

Management of inventory is important as companies invest a hefty amount in the purchase of materials. The requirement of material starts from the requirement of the material to purchasing and managing it. 

Most of the time inventory contributes as the necessary resource to the different processes. 

The inventory requirement manages the right amount of inventory in the organization. Excessive ordering of inventory to avoid shortfalls or deficit ordering of inventory to avoid the blockage of the funds is not the ideal situation.

Demand for the material used to contribute to the inventory makes it a costly affair. Management should handle materials properly to avoid the wastage of stocks and money.

When the company is not aggressively investing in inventory, it increases the profits.

Efficient inventory management contributes to the high quality of the end outcome.

 Management of inventory helps in the storage of the inadequate product for future use.  

Inventory is the stock available to the organization in any form and at any stage. Inventory includes raw material, work-in-progress, and finished goods in the supply chain. Inventory levels in the organization depend upon the levels of demand and supply.

Inventory is one of the costly elements in the organization. Organizations need to determine the requirement of the inventory. 

Inventory costs are associated with the order the manager makes for goods.

Inventory management helps the organization analyze and meet the inventory cost and requirements.

It provides a clear idea of how much stock is needed in the business currently and how much should be the turnover period.

Inventory management could be different for different departments of an organization.

In the same organization, factories need to maintain the stocks of raw materials while the showroom needs to keep the inventory of finished goods produced by the factory.

It is broad as it caters to the holistic approach. 

The responsibility of an organization is to know the requirement of the material at the different stages.

Purchases

Purchasing is one of the most significant aspects of an organization as an organization can’t fulfill the whole raw material need internally. Purchase of required raw material or tools seems to be the most reliable option in such situations. Sometimes, companies get a better deal by purchasing it from the external market.

Earlier, it was easy to handle purchases just by placing an order. Nowadays, it is quite difficult and different with the changing conditions and increases in competition. 

Some of the other factors important for purchasing department are:

Verification of sellers’ credentials is necessary to know the authenticity

An inspection of the quality of material

Evaluation of various costs associated with the raw material like transportation

Purchasing department creates a network of sellers and shares the information with other departments.

The purchasing department is responsible for the purchase of raw materials, sellers, and equipment from a reliable source at the appropriate time.

The importance of purchasing is out to test with the selection of raw material to make it into finished goods. The quality of the raw material is crucial for the organization to have properly finished goods.

Transportation

Organizations use transportation for easy movement of their products and tools. 

Transportation decisions are dependent on the mode of transportation and the route of transportation. 

If an organization decides to transport its products through the air, it increases responsiveness and costs. On the other hand, if the organization chooses the land route, their cost decreases and the responsiveness of the transportation.

The organization should also evaluate if they have the infrastructure for transportation or if they need to hire these services.

Transportation plays a significant role for every business, and when an organization is operating in two different places, it becomes a crucial part of the business.

Efficient transportation options help the organization bridge the distance between the two establishments of the same organization.

work 

Work measurement is the process of measuring the effective time taken by an employee to do the assigned job in favorable working conditions.

Work measurement plays a significant role in minimizing the inputs and maximizing the output of the employees. Job design should be feasible for workers and the organization.

Work measurement defines the quantity the requirement of the person by applying various techniques.

Organizations determine a standard by studying the output provided by employees in the given working conditions.

These standards are known as work standards or time standards.