After the abolishment of Quota regime with effect from Jan. 2005, Garment industries in India had to face stiff competition from global players. In order to compete effectively, they focused on the most efficient way of capital utilization, investing in the right area for the right reason to boost the overall performance. A major investment of any industry lies in its stock. Garment industry too is very much dependent on its inventories. Control of inventory flow is vital for any manufacturing unit, since inventory control plays a significant role in its profitability. Inventory in Garment industry consists of the following items: 1. Garmenting items - are those which directly form a part of the garment. Eg.- fabrics and trims. 2. Non-garmenting items - are those which do not form a part of the garment, but, are very essential in the manufacturing process. Eg.- needles, trimmers, spare parts of sewing machinery, etc. Optimum inventory levels play a major role in the growth of an organization. On the other hand, excess inventories have resulted in the downfall of many industries. Industries are growing extensively aware of the benefits of having optimum inventories in stock so as to allow the usage of capital in a more effective way.
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