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Inventory control is something that should be front-of-mind for anyone in the wholesale distribution business. In the simplest of terms, inventory control involves having greater oversight over one’s stock. Some refer to it as “internal control” or even as an accounting system set up to safeguard assets. Let’s take a look at why inventory control is so important as well as what’s involved in developing an effective system.
What is Inventory Control & Why Is It Important?
Understanding what you have, where it is in your warehouse, and when stock is going in and out can help lower costs, speed up fulfillment, and prevent fraud. Your company may also rely on inventory control systems to assess your current assets, balance your accounts, and provide financial reporting.
Inventory control is also important to maintaining the right balance of stock in your warehouses. You don’t want to lose a sale because you didn’t have enough inventory to fill an order. Constant inventory issues (frequent backorders, etc.) can drive customers to other suppliers entirely. The bottom line? When you have control over your inventory, you’re able to provide better customer service. It will also help you get a better, more real-time understanding of what’s selling and what isn’t.
You also don’t want to have excess inventory taking up space in your warehouses unnecessarily. Too much inventory can trigger profit losses––whether a product expires, gets damaged, or goes out of season. Key to proper inventory control is a deeper understanding of customer demand for your products.
How Companies Control Inventory
There are many different ways to keep control of your inventory. One basic way is to create a spreadsheet with various columns for product name, item number, and quantity. You can have a column to deduct what you sell and ship. You can also keep a log of returns and new incoming stock.
Of course, this is an incredibly labor-intensive process that no growing business wants to deal with. It requires continuous manual monitoring to ensure every transaction is accounted for. The information is difficult to share, and another huge pitfall is human error. People are prone to make mistakes––mistakes that are difficult to track and result in inaccurate inventory numbers.
Ultimately, the more automated your system is, the less paperwork there will be. There is a whole host of inventory management software options out there. These software systems may offer integration with your enterprise resource planning systems or multichannel integrations.
You may have the option to use barcode scanners that will communicate with other devices, such as barcode printers or mobile devices. Some are designed to track the location of the product within the warehouse, which helps when it’s time for picking and packing.
Of course, once you have the tracking systems in place, you need to figure out how you’re going to determine when to order new stock. Some use a stock control method called minimum stock, in which new stock is ordered once it reaches a pre-set minimum level.
If your needs are very predictable, you can use a fixed quantity control system. With this method, every time you place an order, whether it’s weekly, monthly, semi-monthly, your order will be for the same amount. Some people refer to this as a standing order (for more inventory management techniques)
The direction or method you chose will all depend upon the business you’re conducting and the essentials you feel must be fulfilled.
The bottom line is that inventory control is vital to the survival of your business. If you don’t have a good handle on your inventory you’ll never have a true account for how your business is doing. It’s a competitive market out there. Don’t let inventory excess or shortages become your downfall.
By: Johnny Marx
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|Yêu cầu: 03:03, 28/09/2018|
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|Cập nhật: 03:03, 28/09/2018|