What is the relation between Inventory management system and administration ? How Administration Inventory management policy ?

The Inventory Management Policy and Procedure minimizes inventory and costs of inventory ownership. The Procedure ensures the best inventory practices are employed and align with overall company financial objectives and meet operational needs. It applies to all departments involved in managing inventories including the Finance, Accounting, Purchasing, Sales and Operations.

Inventory levels are an important facet of financial management.  Carrying large inventories mean significant costs of ownership. The overarching goal of any organization should be to minimize inventory levels of all types through the use of best inventory management practices that meet the organizational needs and service level goals. What exactly is inventory? It is the quantity of goods and materials on hand in the form of raw and purchased materials, work-in-process, and finished goods (and for retailers, resale goods); typically appears as an asset on the Company’s Balance Sheet.

The purpose of inventory management is:

• To minimize and monitor inventory performance through metrics such as Days Inventory and Inventory Turns;
• To minimize and monitor Cost of Ownership;
• Ensure that inventory practices do not adversely affect the Company’s financial performance; and
• Ensure that best inventory practices are employed and that they meet the Company’s needs.

Responsibilities:

• The CFO (Chief Financial Officer) is responsible for overseeing the Company’s financial investment in inventories and for assisting in developing and reviewing the INVENTORY MANAGEMENT PLAN.
• Top Management is responsible for developing inventory policies and overarching inventory goals
• Involved Department Managers are responsible for helping to complete the review of and implementing the  INVENTORY MANAGEMENT PLAN.

 Activities Covered in the Inventory Management Policy Procedure

• Inventory Management Overview
• Inventory Management Planning Inventory Management
• Reviewing the Inventory Management Plan
• Improving Inventory Management

Forms Included in the Inventory Management Policy Procedure

• Inventory Management Plan Form
• Inventory Management Results

It is the optimal usage of the available materials by managing the production process and also of their procurement at best possible reduced prices without compromising the quality. All procedures are managed based on the principles of scientific inventory management adjusted to the reach of management to reduce the carrying cost of inventory on the one hand and availability of sufficient quantity at the best price to fill the requirements for the production process without interruption to the supply side.

Stock control, otherwise known as inventory control, is used to show how much stock you have at any one time, and how you keep track of it.

It applies to every item you use to produce a product or service, from raw materials to finished goods. It covers stock at every stage of the production process, from purchase and delivery to using and re-ordering the stock.

Efficient stock control allows you to have the right amount of stock in the right place at the right time. It ensures that capital is not tied up unnecessarily, and protects production if problems arise with the supply chain.

The administration of a business includes the performance or management of business operations and decision making as well as the efficient organization of people and other resources to direct activities toward common goals and objectives.

In general, administration refers to the broader management function, including the associated finance, personnel and MIS services.

Sorry this question not in mt specialty...................