What Is Inventory Control

Inventory Control?
Inventory control—also called stock control—ensures an organization has enough supply. The method ensures customer demand and budgetary elasticity by controlling internal and manufacturing processes.

Purchases, reorders, shipping, warehousing, storage, receiving, customer satisfaction, loss prevention, and turnover are needed for inventory control. Nearly half of small firms don't maintain inventories, even manually, according to the 2017 "State of Small Business Report".

Inventory control maximizes profit with little stock investment without hurting customer pleasure. It helps organizations evaluate their assets, account balances, and financial data. Inventory control prevents stockouts. Walmart lost $3 billion in 2014 due to stockouts caused by poor inventory control.

Supply chain management (SCM) oversees the flow of raw resources, commodities, and services from production to consumption. Stock control includes warehouse management. This process integrates product codes, reorder points, reporting, product descriptions, inventory listings and counts, and selling and storage techniques. Warehouse management matches sales and purchases to stock.

Inventory control should cover all goods. These practices can manage the following items.

Inventory Control—Why?

Product-based businesses' main capital expense is inventory. Inventory dominates this sort of company's balance sheet and eats up a lot of operating capital.

Inventory control prevents overbuying and shortages. While some just-in-time ordering organizations have very little inventories, most businesses need inventory control systems to manage their inventory.

Lowering inventory may free up finances for expansion or profitability. If a corporation needs more inventory and tight inventory control raises inventory levels, sales and profitability may increase. Inventory control may optimize your warehouse, stock room, supply room, or storefront to save money and better manage any goods.

How Inventory Control Improves Business
Proper inventory control can help a corporation meet client needs and maximize profits. According to the 2015 "Global State of Multichannel Customer Service Report," 62% of customers have discontinued buying from a firm with bad customer service. Out-of-stock or backordered items top customer service concerns. According to convenience store study, out-of-stocks can lose one in 100 customers. When their regular product is out-of-stock, 55% of buyers at any retailer would not buy an alternative. Inventory control strategies could also reduce costs and revenue losses in these areas:

Spoilage
Obsolete
Storage fees
Cost-efficiency
Sales drop
Losing customers
Overstock
Inventory loss
Warehouse losses

"Owners of small and emerging businesses would be stunned to see how much help they can get and money they can save by wisely managing their inventory," says David Pyke, co-author of Inventory and Production Management in Supply Chains, now in its fourth edition and professor of operations and supply chain management at the University of San Diego. Small firms often rely on inventory for capital. Good techniques optimize inventory management and client demand.

4 Inventory Management Methods

Manual: Tracking inventory with a pen and paper in a ledger or stock book is the easiest technique. This approach works for small firms with few items. It's hard to plan with this method because it's a real record.

Bin Cards: Stock cards are a more complicated solution. Stock cards list each product's unit price, sale price, and inventory count. In huge warehouses and stockrooms, employ product-specific cards. The system tracks purchases, sales, refunds, and promotional stock withdrawals. Note any issues on the stock card. Stock card systems need regular updates to work. Recording odd stock pulls prevents data errors.

Simple Spreadsheets: Small firms track inventories with spreadsheets. Spreadsheets, like Microsoft Excel, can automate and digitize product data. Stock levels and statistics can be updated regularly using little coding. Businesses easily adapt these systems. Users must understand how the spreadsheet works because everyone designs one differently. Because only high-level macros or coding that joins spreadsheet systems can automatically update them, this method is also considered manual.

Basic Inventory Software: SMBs use low-cost inventory software. This simple cloud-based automation links to your point of sale software to update stock in real time. Analytics and reporting let you do cost comparisons, create reorders, find top and worst-selling products, and drill down to order details or consumer habits. Simple inventory management software may expand as your organization expands. #inventorymanagement #Excel #retail #InventoryManagementSystem #ExcelInventoryTemplate #ExcelTutorial #ExcelForBeginners #SupplyChainManagement #finance #financetraining #inventorymanagement

[proactivechain]

Looking for supply chain experts to proactively manage your supply chain? Visit Proactivechain.co for expert assistance.

[MRO-Management]

Inventory Control starts with proper inventory cataloging and continuous data governance. Having the right taxonomy is critical to having the right data to manage your inventory