When it comes to the so-called "inventory control", many people understand it as "warehouse management", which is actually a great misinterpretation.

The traditional narrow sense of inventory control is mainly aimed at the inventory, data processing, storage and distribution of materials in the warehouse, and the purpose of keeping the physical inventory in the best state is achieved by means of anti-corrosion and temperature and humidity control. This is just a form of inventory control, which can also be defined as physical inventory control. So, how to understand inventory control from a broad perspective? Inventory control should be to achieve the company's financial operation objectives, especially cash flow operation. By optimizing the whole demand and supply chain management process (DSCM), reasonably setting up ERP control strategy, supplemented by corresponding information processing means and tools, the inventory level can be reduced as much as possible under the premise of ensuring timely delivery, and the risks of inventory backlog, scrapping and depreciation can be reduced. In this sense, physical inventory control is only a means to achieve the company's financial goals, or just a necessary part of the whole inventory control; From the organizational function, physical inventory control is mainly the responsibility of warehouse management department, while generalized inventory control should be the responsibility of the whole demand and supply chain management department and even the whole company.

Why until now, many people's understanding of inventory control is limited to physical inventory control? The following two reasons cannot be ignored:

First of all, our enterprise does not attach importance to inventory control. Especially those enterprises with better benefits, as long as they have money to earn, few people will consider the issue of inventory turnover. Inventory control is simply understood as warehouse management. Only when there is no money to spend, will someone look at the inventory problem, and the result is often simple, bought too much, or the work of the warehouse department is not done well.

Second, the misleading of ERP, especially some so-called domestic ERP. Some simple software for purchasing, selling and storing is called ERP. How much inventory can enterprises reduce by using what they call ERP? It seems that inventory control can be done by their small software. Even ERP bosses in the world, such as SAP and BAAN, define simple warehouse management function as "inventory management" or "inventory control" in their functional modules. In this way, we don't quite understand what inventory control is, let alone what inventory control is.

In fact, a broad understanding of inventory control should include the following points:

First of all, the fundamental purpose of inventory control. As we know, the two key assessment indicators (KPI) of world-class manufacturing industry are customer satisfaction and inventory turnover rate, which is actually the fundamental purpose of inventory control.

Second, the means of inventory control. It is far from enough to improve the inventory turnover rate only by relying on the so-called physical inventory control. It should be the output of the whole demand and supply chain management process, including not only warehouse management, but also more important parts: forecasting and order processing, production planning and control, material planning and procurement control, inventory planning and forecasting itself, as well as the distribution and delivery strategy of finished products and raw materials, and even the customs management process. With the whole process of demand and supply chain management, it is the management of information flow and capital flow In other words, inventory itself runs through all aspects of the whole supply and demand management process. In order to achieve the fundamental purpose of inventory control, it is necessary to control all aspects of inventory, not just to manage the acquired physical inventory.

Third, the organizational structure and evaluation of inventory control. Because inventory control is the output of the whole demand and supply chain management process, to achieve the fundamental purpose of inventory control, there must be a reasonable organizational structure suitable for this process. Until now, we can find that many enterprises have only one purchasing department, and the warehouse is just below the purchasing department. This is far from meeting the requirements of inventory control. From the analysis of demand and supply chain management process, it can be seen that procurement and warehousing management are typical executive departments, and inventory control should focus on prevention. It is difficult for executive departments to "prevent inventory" for the simple reason that their assessment indicators are largely to ensure supply (production, customers). How to establish a reasonable demand and supply chain management process according to the actual situation of enterprises, so as to set up a corresponding reasonable organizational structure, is a problem worthy of discussion for many enterprises.