Traceability and clear visibility of transactions within the warehouse setting is essential for the health of your supply chain. The process of ordering, storing, and using inventory has a direct impact on the growth and health of any company. A prominent inventory is a core component of the supply chain and is where all areas of it convert. We will explore how inventory control affects your supply chain logistics to help you better understand your own operations.

What Is Inventory Management?

Any company that produces something or stores something in a warehouse must keep track of what they have and where it is. Storing and tracking of inventory in a closed environment is inventory management in the most basic terms. When a finished product comes into the warehouse, it must be counted and located within. When an order comes in, the product is picked and shipped to the customer. The product comes in, and the product goes out, and the process is all tracked by means of inventory control software. Weekly or monthly cycle counts are done to verify inventory accuracy. If the count is off, then adjustments are made.

What Is Supply Chain?

Supply chain logistics or management is a broader view of inventory management. Supply chain refers to all goods coming in or out of a warehouse, production facility, and cross-docking operation. It is not limited to inventory that the company produces but includes raw materials, component parts, and personal things like forks and toilet paper for employees. Supply chain is exactly that, supplies. It’s anything that the company needs or uses in its day-to-day operations and how it moves through the building. Part of the supply chain is the carriers, trucking companies, and third-party freight providers that move the materials from point to point. Once the products leave the loading dock, they become the carrier’s responsibility.

How They Work Together

Inventory control affects supply chain logistics directly. Inventory and supply chain work in tandem, and there can’t be one without the other. Inventory is important to supply chain because without it, a company wouldn’t know what they have and what they need. Accurate inventory control allows for accurate forecasting and ordering of materials. The supply chain will break down with accurate inventory counts. Supply chain management means identifying your business needs and being able to respond to those needs quickly.