In today’s complex business environment, a fine-tuned inventory management system has become a need-to-have, not a nice-to-have. Even relatively small companies can find themselves responsible for sourcing, storing and shipping goods worldwide. On top of that, COVID-19 pandemic showed companies how quickly events can disrupt supply chains and jeopardize their business.
For professionals interested in entering a career in inventory management, the online Master of Business Administration (MBA) with a Management Information Systems (MIS) Specialization program from Southern Illinois University Edwardsville (SIUE) can help prepare you with the foundational skills you need to succeed.
What Is an Inventory Management System?
An inventory management system manages and tracks a company’s goods from supplier to customer. This encompasses purchasing, receiving, storing, selling, shipping and handling returns.
A company’s inventory management system is like a car engine. The standard car engine has several parts that all need to work together to accelerate the car. If just one part breaks down, the engine will stop working. Additionally, the engine is hidden from view behind the car’s sleek exterior.
In a company, the inventory management system has several different pieces that work together to help get products from point A to point B and move the company forward. If just one part of the system breaks, it could be catastrophic for the business. Also, just like an engine, the customer rarely sees the inventory management system.
Just like different types of vehicles require different types of engine models, different companies require different types of inventory management systems. There are two main types of inventory management systems:
- Periodic inventory system: Provides updates on products periodically, usually every three months, six months or longer.
- Perpetual inventory system: Provides updates on inventory in real time. This is the type of system that most large, modern companies use.
In addition, consider how a finely tuned engine will help the driver save money because the engine will require less gas and maintenance. Similarly, an efficient inventory management system can pad a company’s bottom line by saving on labor and other costs. An inefficient inventory system can also cause a company to miss out on sales by not having enough product on hand.
Since it directly impacts the bottom line, many companies are eager to hire a skilled MIS professional who can help keep the company’s inventory at optimal levels.
How MIS Functions in a Business Environment
There are four ways that a modern MIS will aid your organization:
- Reports on inventory costs: This helps you determine how much profit per item you earn.
- Reports on inventory levels: This helps you determine how quickly inventory moves through your system, which products are the most popular and which products sit on your shelves for months.
- Value of inventory: This helps you determine how much your inventory is worth, which can be used as collateral when applying for a loan.
- Increased inventory: This helps you actively track your inventory so you can stock up on items if there is a spike in sales.
As a professional in MIS, you will be responsible for monitoring a few or all of these elements.
How to Succeed in MIS
Business management software company aACE highlights several tips for improving the operational efficiency of your company’s inventory management system. The five most important steps to take include the following:
- Tossing out spreadsheets: There are too many powerful MIS tools out there to still use a manual spreadsheet. Many tools will combine all your systems, update in real time and automate nearly the entire process.
- Tracking everything: This includes elements like the product name, type, serial number, barcode, SKU, vendor information, location of inventory storage, responsible party, last order date and how the item is used in your operations.
- Understanding your sales process: Monitoring your inventory levels is important but only tells you one side of the story. To succeed, you must understand how your inventory levels relate to your sales process, product types, industry trends, economic trends and more.
- Evaluating suppliers: You should conduct routine risk assessments of your suppliers, especially those that supply your most critical products.
- Automating reorders: Creating pre-determined reorder parameters can help you avoid human error in the reorder process.
Regarding inventory, there is much more responsibility than meets the eye. The marketing team, accounting team and other departments all play important roles. However, all of this comes secondary to getting products from suppliers to customers, which is the responsibility of the MIS professionals. In this sense, you’re involved in the most critical part of the business.
With that in mind, many young professionals prefer to obtain an MBA, particularly one specializing in MIS, before entering the industry. Doing so will help you develop your ability to formulate and implement MIS, making you a more attractive candidate to employers.
In particular, SIUE’s online MBA with a Management Information Systems Specialization program prepares students with several foundational skills and advanced applications. You can earn this degree fully online in as few as 12 months, regardless of your undergraduate background and with no foundation courses required.
Learn more about Southern Illinois University Edwardsville’s online MBA with a Management Information Systems Specialization program.
