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Inventory Control vs Inventory Management (2024 Update)

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In this Inventory Control vs Inventory Management article, we explore the unique characteristics of Inventory Control and Inventory Management and compare their differences. Read on to learn more. 

inventory control vs inventory management

What is Inventory Control?

Inventory Control is the process of regulating and overseeing the quantities, locations, and movement of goods within a business. It focuses on maintaining optimal stock levels to meet demand while minimizing costs and ensuring product availability.

Unique Characteristics of Inventory Control

Inventory Control has several distinctive characteristics:

Emphasis on Cost Reduction: Inventory Control focuses on minimizing carrying costs, such as storage, insurance, and depreciation, to enhance profitability.

Real-time Monitoring: It involves continuous monitoring of inventory levels to make quick adjustments in response to changing demand.

Forecasting and Reordering: Inventory Control systems rely on demand forecasting and reordering strategies to maintain optimal stock levels.

Inventory Valuation: Precise valuation methods like FIFO (First-In, First-Out) or LIFO (Last-In, First-Out) are often employed to assess the value of inventory accurately.

Limited Scope: Inventory Control primarily deals with the physical aspects of inventory management and doesn't delve deeply into strategic planning.

inventory management vs inventory control

What is Inventory Management?

Inventory Management encompasses a broader approach to handling a company's inventory. It involves the entire supply chain and focuses on optimizing the flow of goods from suppliers to customers efficiently.

Unique Characteristics of Inventory Management

Inventory Management is characterized by:

Holistic Approach: Inventory Management takes a comprehensive view of the supply chain, addressing not only inventory control but also procurement, production, and distribution.

Strategic Planning: It involves long-term planning and decision-making to align inventory with business objectives, including customer service levels and financial goals.

Demand Forecasting: Advanced forecasting techniques are used to predict demand accurately and ensure the right products are available at the right time.

Supplier Collaboration: Inventory Management often includes collaboration with suppliers to optimize lead times, reduce costs, and improve product availability.

Technology Integration: Inventory Management systems often integrate with other software, such as ERP (Enterprise Resource Planning) and CRM (Customer Relationship Management), for seamless data sharing and decision-making.

difference between inventory control and inventory management

Inventory Management vs Inventory Control: How Are They Different?

Despite being similar in nature, inventory management and inventory control fulfill different purposes. We will explore these differences below:

Objective and Focus:

Inventory Management: Encompasses a broader set of activities, including inventory control, but also involves strategic planning, forecasting, supplier relationships, and overall optimization of the entire inventory system.

Inventory Control: Primarily focuses on minimizing carrying costs, reducing stockouts, and maintaining optimal inventory levels to meet immediate demand.


Inventory Management: Takes a more holistic approach, considering long-term strategic decisions, such as product assortment, sourcing strategies, and supply chain network design.

Inventory Control: Deals with the day-to-day tactical decisions related to reorder points, safety stock, order quantities, and replenishment cycles.

Time Horizon:

Inventory Management: Involves longer-term planning to align inventory levels with future demand forecasts and overall business objectives.

Inventory Control: Typically focuses on short-term or immediate inventory needs, ensuring that stock is available to meet current customer demand.

Cost Considerations:

Inventory Management: Considers a wider range of costs, including carrying costs, ordering costs, stockout costs, and obsolescence costs, while balancing them with customer service levels and strategic objectives.

Inventory Control: Primarily concerned with minimizing inventory holding costs and order-related costs, such as ordering and setup costs.

Technology and Tools:

Inventory Management: Uses more advanced planning and optimization tools, including demand forecasting software, inventory optimization software, and supply chain management systems.

Inventory Control: Often relies on inventory control software or systems to track and manage current inventory levels and reorder points.

Decision-Making Frequency:

Inventory Management: Includes less frequent, strategic decisions related to product lifecycle management, supplier selection, and network optimization that may occur on a monthly or quarterly basis.

Inventory Control: Involves frequent, routine decisions related to order quantities and reorder points that may occur daily or weekly.

Performance Metrics:

Inventory Management: Performance metrics include strategic KPIs such as total inventory cost, cash-to-cash cycle time, and supply chain efficiency.

Inventory Control: Typically measured using metrics like inventory turnover, stockout rates, and service level performance.

Risk Management:

Inventory Management: Takes a broader perspective on risk management, considering supply chain disruptions, supplier risk, and demand variability, and develops strategies to mitigate these risks.

Inventory Control: Focuses on immediate risk mitigation, such as avoiding stockouts or overstock situations.

In summary, while inventory control and inventory management are related concepts, they serve distinct purposes. We hope that our Inventory Control vs Inventory Management comparison article has given you a better understanding of the key differences between the two.

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