Inventory control is provided by any company to ensure that it has the right materials on hand to avoid stock-outs and involves procurement, care, and disposition.
The raw materials inventory is the parts that the company has currently in stock that haven't been used in finished goods or work-in-process production. There are two subcategories of raw materials:
Any company needs to have enough raw materials on hand to ensure that the production process is launched promptly, but not too much as the company is not going to invest in an inordinate amount of inventory. The main purpose of the inventory control in the raw materials is designed to address the balance by frequently ordering the materials in small sizes from vendors.
Work-in-process (WIP) inventory includes materials that have begun their transformation to finished goods but have only been partly converted during the manufacturing process. In other words, these items are unfinished and are currently being worked on or waiting in the buffer storage for further processing.
Work in process goods requires storage space, represents the not available for investment capital, and carries an inherent risk of the earlier expiration of the product shelf life. Many companies strive to keep the real amount of WIP as low as possible for the purpose to reduce the amount of capital tied to the manufacturing process.
Finished goods include items that are completed as to the manufacturing process and are ready for sale to customers. Finished goods inventory is designed to maintain the inventory of the finished goods in the "between the work-in-process and shipping finished goods" step and is critical for increasing the company's output and decreasing its excess products in the storages.
Resale goods inventory is the returned goods that are salable. Depending on the company preference may be included in the "goods for sale" or "finished goods" inventory.
Prism Visual Software, Inc. offers an inventory control system that includes ServQuest™ desktop and MiniMate™ mobile software. Using our inventory control software system gives companies some benefits.