At SavTech, we believe that mastering inventory is the first step to achieving operational efficiency and sustainable growth. While most people associate inventory with shelves full of finished products, for a business, inventory represents everything it needs to keep operations running—from raw materials to spare parts.
For instance, if your business manufactures soup, your inventory might range from tomatoes and noodles to packaging cans and even the fuel used by delivery trucks.
The Four Main Types of Inventory
Most companies deal with one or more of the following inventory types:
- Raw Materials & Components
These are the fundamental elements that make up a finished product. In our soup example, this includes vegetables, spices, flour, and packaging materials. - Work-in-Progress (WIP)
This refers to items currently under production—partially assembled goods or products being packaged. Optimizing inventory at this stage improves cost control and production timelines. - Finished Goods
These are completed products ready for sale or shipment. They’re fully packaged, labeled, and quality-checked—waiting to be delivered to customers or distributors. - MRO (Maintenance, Repair, and Operating Supplies)
These support manufacturing but don’t end up in the product itself—things like tools, lubricants, cleaning supplies, and replacement parts for machines.
At SavTech, we also help businesses categorize additional inventory types based on their operations, such as packaging materials, promotional stock, or field return inventory.
Why Inventory Management Matters
Inventory can either be an asset or a liability. Without a structured system, businesses may overstock, tying up working capital, or understock, leading to missed sales and customer dissatisfaction.
Here’s how effective inventory management from SavTech can save you money and boost efficiency:
Benefits of Smart Inventory Control:
- Reduced storage costs
- Lower risk of spoilage, theft, or obsolescence
- Less waste and better sustainability practices
- Faster order fulfillment and higher customer satisfaction
- Better forecasting and budgeting accuracy
Risks of Poor Inventory Management:
- Overstocking ties up capital and leads to higher storage or tax liabilities
- Understocking halts production and results in lost sales
- Poor tracking can lead to errors, delays, and customer churn
SavTech’s Inventory Solutions integrate forecasting, real-time analytics, and mobile access to help you make informed decisions across the supply chain.
SavTech’s Steps to Effective Inventory Management
While inventory systems can vary depending on your business size and complexity, every process follows these foundational stages:
- Planning & Procurement
Forecasting demand, considering seasonal trends, and ordering raw materials/components at optimal times using data-driven insights. - Receiving & Inspection
Goods are received, verified, and recorded. Smart scanning with SavTech barcode systems ensures instant SKU matching and automated entry. - Storage & Cataloging
Inventory is organized using SKUs, barcodes, or QR codes for fast retrieval. Our warehouse software ensures FIFO (First-In, First-Out) movement to reduce waste. - Fulfillment & Shipping
Orders are picked, packed, and shipped efficiently with real-time inventory syncing. Our integration supports batch handling, route optimization, and delivery tracking. - Auditing & Reconciliation
Automated tools, including barcode and RFID systems, match physical inventory with system records, highlighting any discrepancies for investigation. - Reordering
Our system sets dynamic reorder points based on lead time, stock levels, and sales velocity, avoiding both excess and shortage.
SavTech’s Inventory Management Strategies
There’s no universal method that fits all inventory needs. At SavTech, we implement or customize the following strategies depending on the client’s business model:
1. ABC Segmentation
We categorize inventory based on importance:
- A-items: High value, low volume – tight monitoring needed
- B-items: Moderate value and quantity
- C-items: Low value, high volume – minimum control required
2. Just-In-Time (JIT)
Inventory is restocked only when needed. Ideal for businesses with precise demand forecasts and reliable suppliers. SavTech’s demand planning tools ensure seamless execution.
3. Safety Stock Buffering
To manage unpredictability, we help clients maintain buffer stock for essential SKUs to cover lead-time delays or demand spikes.
4. Economic Order Quantity (EOQ)
We calculate the most cost-effective order quantity using your demand rate, ordering cost, and carrying cost—reducing total inventory expenses.
5. FIFO (First-In, First-Out)
SavTech systems automatically prioritize the sale of older stock first, especially useful for perishable or time-sensitive products.
6. LIFO (Last-In, First-Out)
In high-inflation environments, LIFO may be useful for financial or tax advantages by selling recent (higher cost) items first.