Active Inventory

Tags: Glossary

Materials held in a facility, which are intended to be consumed in manufacturing/assembly or sold in a specified period, are referred to as Active Stock Goods. These goods are stored in active pick locations and are ready for order filling.

What is Active Inventory?

Active Inventory

Active inventory, also known as active stock goods, refers to materials that are held in a facility with the purpose of being consumed in manufacturing or assembly processes, or to be sold within a specified period. These goods are strategically stored in active pick locations within the facility, ensuring they are readily available for order fulfillment.

In the world of logistics, active inventory plays a crucial role in maintaining efficient operations and meeting customer demands. By having these goods readily accessible, businesses can minimize lead times and improve order fulfillment rates. This is particularly important in industries where time is of the essence, such as e-commerce, retail, and manufacturing.

One of the key advantages of active inventory is its ability to support just-in-time (JIT) manufacturing and order fulfillment strategies. JIT aims to minimize inventory holding costs by ensuring that materials and products are delivered exactly when needed, eliminating the need for excessive stockpiling. By storing active stock goods in active pick locations, businesses can quickly retrieve and deliver them to the production line or customers, reducing the need for large inventory buffers.

Active inventory is typically stored in areas of the facility that are easily accessible and organized for efficient picking and packing. These active pick locations are strategically designed to optimize the flow of goods, minimizing travel time and maximizing productivity. Common examples of active pick locations include shelves, racks, bins, or designated areas on the warehouse floor.

To effectively manage active inventory, businesses employ various inventory management techniques and technologies. These may include barcode scanning systems, radio frequency identification (RFID) tags, or warehouse management systems (WMS). These tools help track the movement of goods, monitor stock levels, and ensure accurate order fulfillment.

In conclusion, active inventory refers to materials held in a facility that are intended for immediate consumption in manufacturing or assembly processes, or for sale within a specified period. By strategically storing these goods in active pick locations, businesses can optimize their operations, reduce lead times, and improve customer satisfaction. Effective management of active inventory is essential for businesses aiming to streamline their supply chain and meet the demands of a dynamic marketplace.

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