Admin inventory in logistics how effective most optimal?

In the context of fierce competition along with that is the cost of inputs continuously variable automatic management of inventory is no longer an ancillary activity which has become the key element in the logistics chain of the business. According to research by the world Bank, The cost logistics in Vietnam, accounted for about 16-20% of GDP, higher than the global average. In it, the cost of warehousing – inventory is one of the largest component, directly affect the financial performance and ability to satisfy the market.

The inventory excessive will lead to deposited funds, incurred costs preserved, difficult to control the quality of goods, while deficiency of inventory back cause disruptions to the supply chain affects the level of customer satisfaction.

Therefore, in this article Lac Viet Computing will give business a practical, comprehensive management, inventory value in logistics – from core concepts, role in the supply chain to the index need tracking, application models and tools to support efficient.

1. Admin inventory in what is logistics?

Admin inventory in logistics is the process of monitoring and control to optimize the amount of goods that are stored at the score warehouse in the supply chain, to ensure that meet customer needs at the right time, right quality, with storage costs low.

In other words, this is not merely inventory management physical, but also includes:

• Planning import – export goods in accordance with the forecast demand.
• Guaranteed inventory safe, avoid fracture of the supply chain.
• Optimal rotation goods to minimize the costs – financial risks.

Practical example: A business ecommerce enter the top too much before the peak season but don't have the tools to closely monitor the needs in each area will lead to inventory status, excessive in some stock, while the other end of the line → affect the speed of delivery, costs of transfer is not required.

Management of inventory plays a role as the “veins” in the logistics chain, the link between purchasing department, warehousing, distribution and financial accounting. The benefit highlights include:

• Maintain the line of stability: When well-managed inventory, businesses can ensure the goods are ready to serve customers without the need for storage too much.
• Reduce operating costs: Limit the storage of excess help save storage area, storage costs/labor cost losses.
• Optimize cash flow: excess inventory is money lying dead. Good governance helps rotated capital efficient business support, maintain liquidity.
• Improved accuracy in forecasting and planning: Thanks to the data inventory transparency, the decision to purchase, production, delivery will be practical basis clearer.

2. The model management inventory in logistics popular today

2.1 Model Just-In-Time (JIT) – Enter the goods at the right time, not a storage surplus

Just-In-Time method is admin inventory in logistics which business to enter only when really needed, usually immediately before use or delivery. The main objective is to minimize the amount of inventory, thereby saving costs of storage, improving cash flow.

Illustrative example: A business vehicle assembly plant just order components when orders from dealers, components are delivered on the date of manufacture – no need to store before the week or months as previously.

Benefits:

• Optimize cash flow: the Business doesn't have to get capital out reserve items too soon.
• Reduce the cost of warehousing, storage: Increase the efficient use of warehouse space.
• Increased flexibility: in accordance with the business whose products are constantly changing or short-life.

Challenge:

• Depends on the supplier, punctual delivery, with stable quality.
• Request tracking system, inventory, forecasting demand accurately avoid production interruptions while about slowly.

Business should be applied when: There are supply chain, stable, fast delivery speed, product change, or need to optimize working capital.

2.2 Model Economic Order Quantity (EOQ) – Calculate the amount of order optimal

EOQ model is to help businesses determine the number of optimized cargo should be placed in each warehouse, so that the overall cost (including the cost of ordering and the cost of storage) is the lowest.

Simple example: Business A each order will cost an extra cost of shipping and handling orders. If you put too little → right place multiple times → increase the shipping cost. If you put too much → inventory increase → costs of storage increase. EOQ will help to find out the “balance point” reasonable.

Benefits:

• Reduce overall cost of operations, importing, warehousing.
• Have plans to enter the restaurant regularly, avoid fracture source.
• Easy application with Excel or warehouse management software, no need complicated tools.

Restrictions:

• Not to factor in fluctuations in demand or delivery time is not stable.
• Need to have accurate data on the cost of ordering, storing the same consumption periodically.

Business should apply when: business items stable, have consumption data clearly and want to better control operating costs repository.

2.3 Model ABC – Classification of goods for inventory management efficiency

Concept:
The ABC model divides goods into three groups based on consumption value or importance to the business:

• Group A: Less items but high-value → need tight control.
• Group B: average value → management in moderation.
• Group C: More items but low value → control more flexible.

Illustrative example: A stock has 500 items. Group A has 50 items, but accounts for 70% of the total value of stock. Group C has 300 items but only accounted for 10% of the value. Businesses need to focus precise control group A (barcode scanning, inventory periodically), and group C can check quarterly.

Benefits:

• Focus resources on the most important products.
• Optimal cost of inventory and warehouse management.
• Easy application in any scale business.

Business should be applied when: There are large number of different products and want to prioritize control the goods affected much revenue or profit.

Model comparison apply for business

Suggestions:

• Small business development: should start with the model EOQ combine ABC.
• Businesses have supply chain stability, produced according to orders: should implement JIT + ABC to control the important goods.
• Retail business multi-items: priority apply the ABC model, then combine with the EOQ to a decision to enter the row.

3. The indicator is important to track in management and inventory in logistics

The measurement inventory't just stop at the tally the number of goods in stock. Businesses need to assess the performance status of the inventory through the indicators specialized. These indicators help the financial department, logistics and sales coordination decision accurately and timely in order to save costs.

3.1. Inventory turnover (Inventory Turnover)

Distance calculator:
Spin inventory = cost of goods sold (COGS) / value of average inventory

Meaning: this indicator to know over a period of time (usually 1 year), the business had the “rotate” or consumption of inventory, how many times. Only the higher the number, proof of goods selling, which is not stagnant in stock.

For example, If cost of goods sold for the year is 10 trillion, and the value of inventory on average, is 2 billion → spin inventory = 5 cycles/year → the average of each of 2.4 months (12/5), stock is “new”.

Actual value:

• To help businesses assess efficient use of capital invested in inventory.
• Detection of goods sold slowly, since it has the policy discounts, promo or stop typing more.
• In accordance with business, retail, fashion, food – place quick spin is the vital factor.

3.2. The number of days of inventory average (DSI – Days Sales of Inventory)

Distance calculator: DSI = 365 / spin inventory

Meaning: this index indicates the average loss how many days for enterprises to consume all of existing inventory. Only the lower the number the sales performance as high.

For example: If rotation inventory is 6 → DSI = 365/6 = 61 days → on average, 61 days new sold out a round of inventory.

Actual value:

• DSI-house financial administration predicted to be the spin cycle capital.
• Is the basis to calculate their working capital requirements and financial planning.
• Can compare with industry or opponents to assess the ability to manage inventory current.

3.3. Inventory safety (Safety Stock)

Inventory safety is the amount of goods minimum required to maintain in stock to ensure business operations are not interrupted when:

• The spike in customer demand.
• Supplier delivery is delayed.
• Have trouble in shipping or production.

How to identify: often, businesses identify inventory safety based on analysis of data consumption in the past, delivery time the average standard deviation of demand.

Actual value:

• Ensure the ability to meet orders promptly, to avoid losing customers due to lack of orders.
• The risk of fracture of the supply chain in unusual situations.
• If, however, put inventory safe too high, will cause deposition of capital and increase the cost of management – should be reasonably calculated.

3.4. Accuracy rate inventory (Inventory Accuracy Rate)

Distance calculator:
The accuracy rate = (the Number of actual inventory management / data system) × 100%

Meaning: this indicator reflects the degree of homogeneity between data inventory on software/system with real in stock. If the difference will cause deviations in sales reportsplan , purchase, even causing damage when the inventory.

For example, If the system recognizes there are 1000 products but in fact only 920 → accuracy rate is 92%. Security level is usually recommended is above 95%.

Actual value:

• Help detect errors in the import process – output – storage, avoid loss of goods.
• Are important factors in internal audit, financial transparency.
• With the business sale multi-channel, the rate of accurate inventory also affects the visibility of inventory on the sales system (POS, eCommerce).

4. The software tool supports management effective inventory

4.1 Excel spreadsheet: Easy-to-apply, but limited when the scale increases

For the small or new business development, management, inventory value in logistics, Excel is a simple tool accessible. Business can create table track export – import – inventory according to each code, duration and warehouse location. However, when the number of product inventory increased, Excel is prone to issues such as:

• Trouble updating data in real time.
• Uncontrolled deviation when multiple users to manipulate.
• Not connected with the accounting system or purchase.

Therefore, the Excel sheet should be considered as a temporary solution, only fit with the models, simple operation and low volatility.

4.2 software inventory management independent: advanced solutions for growing business

When the scale operation expanded, the need for cargo control in several warehouses, a lot of code and line displacement increases, the warehouse management software independent solution is more suitable. The software is usually supported:

• Management code according to multiple attributes (size, colour, production batch...).
• Track inventory by location, branch, or place of delivery.
• Warning minimum of inventory or inventory alert go beyond the norm.
• Access historical import – export – transfer of goods easy.

However, the limitations as the software repositories are often not directly connected with the system of accounting and finance, which led to lost time for illumination or data entry back in the other departments.

4.3 software integrated logistics – financial accounting: optimal run the entire chain

The ideal solution for medium-sized businesses and large, is to use software has the ability to integrate inventory management, commissioning, logistics, finance and accounting on the same system. A number of platforms ERP or accounting software has modules to manage inventory can now:

• Connection data from the stage of purchase – inventory – sales – accounting – financial reporting.
• Automatically updates the inventory levels, the optimal planned to buy/sell.
• Support inventory, classification of goods according to the ABC model, or alert the slow rotation.

4.4 LV Financial AI Agent – Assistant analysis, inventory intelligence for the financial management

LV Financial AI Agent is not a software repository mere, which is the assistant financial analysis, smart, deeply integrated with the accounting system (such as AccNet) to put out inventory report in-depth analysis service for financial decisions and strategic operation management.

The salient features support management inventory business:

• Automatic synthesis of data inventory, real-time analysis according to each code group, and each region or branch warehouses.
• Warning goods rotation, low inventory, overdue or value of inventory is too high compared to the revenue of the same period.
• Ratio analysis inventory on total assets ratio, inventory turnover, number of days of inventory average (DSI) – support reviews the financial health from the perspective of logistics.
• Hints import or liquidation inventory, slow-moving, based on the propensity to consume earlier.
• Integrated with management reports and other financial help CFO/ administrator grasp the inventory not only the quantity but also impact cash flow and profitability.

Admin inventory in logistics not only is this math tally of cargo that is a core part decide the operational efficiency, financial costs and the ability to react flexibly of business before market movements. Mastering the management model, only the number of reviews and application tools appropriate technology – especially the integrated solution as LV Financial AI Agent – will help the business reduce inventory costs, optimize cash flow to increase competitiveness superior.

If you are looking for a solution admin inventory in logistics comprehensive and in accordance with the peculiarities finance – logistics of his business, don't hesitate to book a free consultation analysis tools LV Financial AI Agent to experience effectively managing a real difference.