Inventory management is when a business orders, tracks, stores, manages and ships its products. For consumers who only see finished products on shelves, inventory management probably seems fairly straightforward. In reality, there’s a complicated web of logistics at work to get the right products in front of the right consumers at the right time.

As an inventory management professional, your responsibility will be to coordinate all the moving pieces of a business’s supply chain to ensure maximum efficiency. In this sense, you’re like a conductor drawing a symphony from a crowd of instruments.

Why Is Inventory Management Important

When handled correctly, precise inventory management can drastically improve a company’s sales and margins. It achieves this by ensuring a company’s shelves are stocked during popular times of the year but limited during the slower weeks. At the same time, efficient inventory management can also reduce expenses and overhead associated with storing and transporting products.

It’s important to note that inventory management isn’t only necessary for the Amazons and Microsofts of the world. It’s also crucial for businesses of all sizes. In fact, it can be even more important for smaller businesses.

Supply Chains for Small Businesses

In 2020, the well-known brand Kellogg Co. saw a significant increase in product sales for its cereals, noodles and snacks as more people around the world worked from home and stayed inside. Growth was at 7% over a nine-month period that year. However, its packaging and shipping services could not keep up with the demands and pandemic restrictions, so Kellogg had to work with its regional packaging suppliers to find alternative packaging sources from countries like New Zealand. While Kellogg survived the year with gains in market share and profit, it also had the big-business budget and funds to mitigate this crisis and survive. For small businesses, however, this is often not the case.

Small businesses need to be laser-focused with their inventory management to ensure that they are constantly optimizing performance while minimizing expenses. For many small businesses, it’s not an exaggeration to say that a $100,000 blunder could instantly put them out of business.

The State of the Industry

If you’re considering entering the world of inventory management, then you’re in luck. There has hardly been a better time to get started. This is mainly because the COVID-19 pandemic and the Ukraine/Russia war have plagued the global supply chain for the past two years.

Looking forward, small business owners are putting their inventory management processes under a larger microscope than ever, which means opportunity abounds for supply chain professionals that can help small business owners maximize their bottom line. It’s likely there hasn’t been this much focus on the industry since the creation of the internet.

Inventory Management Responsibilities

As an inventory management professional, one of your primary roles is to improve your company’s processes by leveraging internal data. Here are just a few examples of what that looks like:

  • Understanding and accurately forecasting consumer demand based on historical records
  • Determining whether a First In First Out (FIFO) or Last In First Out (LIFO) system is best for your business
  • Auditing your stock to identify and eliminate products with a low turnover rate
  • Tracking your stock over time and uncovering actionable trends
  • Quality control, particularly for perishable goods

With this in mind, you will also act as a liaison between your staff and your clients/customers. Externally, you must do your best to predict what products your clients might want and when they want them. Internally, you need to put people, machinery and procedures into place to ensure you’re reaching your goals.

Inventory Management as a Career

Undoubtedly, a career in inventory management requires a unique blend of analytics skills, intuition and a passion for data. However, before you can put these skills into action, you’ll also need to deeply understand how a business runs. After all, you can’t expect to improve a business’s bottom line without first understanding its value proposition, target demographic and main competitors.

This is why many professionals choose to pursue a Master of Business Administration (MBA), particularly one that focuses on supply chain management. These programs can prepare you to advise businesses on how to succeed, given today’s fluctuating global supply chain.

In particular, the University of Wisconsin-Parkside’s online MBA program offers a course specifically for Global Supply Chain Management. This course educates students on the most current terminology, consents and models involved in supply chain systems. Examples of this include network planning, logistics and risk-pooling strategic alliances.

Learn more about the University of Wisconsin-Parkside’s online MBA with a concentration in Supply Chain Management program.