To satisfy these expectations of reasonable price, reasonable remuneration as well as good profitability, COST REDUCTION must be a continuous activity.

For most of the production and service organizations, high amount of money is blocked into inventory. Often safety stock limits are kept high to take care of unforeseen situations like stock-outs or heavy rejections. This high inventory means high inventory carrying cost to the organization.

High inventory hides quality problems. Low level of inventory forces to keep high quality standards and reveals any quality deterioration.

To reduce cost and increase quality level, good control on inventory is necessary. A good control on inventory also helps in reducing associated costs like procurement costs, material handling costs, lost opportunity costs etc.

To have good inventory control, warehouse must be managed efficiently. WM module of SAP R/3 is one of the best tools available to control inventory at bin level.

Click here to know more about WM module of SAP R/3.