Inventory control is a process in which a company’s inventory levels are managed. Keeping track of inventory can be overwhelming, and there are plenty of inventory control systems available today to help streamline the supply chain. You can accurately and efficiently track your inventory with special processes and technology. Inventory control can occur in a company’s warehouse or across several locations.
An inventory control system monitors the usage, movement, and storage of a company’s stock. From the time a certain item or product is in stock at your warehouse to the time it reaches its final destination, inventory control allows you to keep track of it along the way.
What Can Inventory Control Include?
Inventory control aims to maximize profits while having the lowest amount of inventory in the warehouse. There are a few different systems and processes to be set in place to achieve this. These inventory control systems may include inventory counts, integration of barcode scanners, details, history, and locations of products, adjustments and reports, and tracking inventory with sales and purchase orders physically.
These technologies make it easier to handle inventory and not compromise the customer experience and satisfaction. Instead of handling inventory manually, systems set in place eliminate human error while controlling the stock level. When inventory control is effective, the sales to inventory ratio can be changed positively. In a warehouse with limited space, inventory control allows you to make the most out of it and meet the demand of your customers.
Ways to Control Inventory
There are several ways you can accomplish inventory control. Your system should be able to track inventory levels and create and fulfill orders. The simplest way to control inventory is manually, either with a stock book or a ledger. This system would be most successful among smaller businesses with less inventory.
Another way is through stock cards. Stock cards records unit prices, sale prices, and inventory counts. Individual cards can be used for each product when you have a lot of inventory. This method is more complex than others, and it requires continuous updates to keep the system effective.
Spreadsheets are a common method to track inventory, and product data can be captured automatically using a spreadsheet. This method can be customized to meet the specific needs but requires coding that can keep up with the system automatically; otherwise, it’s similar to a manual control system.
Inventory software can be a basic way to automate stock updates, and the software can help to run cost comparisons identify best-selling products and worst-selling products. More advanced software is available that can scale along with the business.
Why Inventory Control Is Important
Inventory control can help with several things, from your bottom line to customer satisfaction. Time, money, and resources can all be saved through inventory control. Without control of your inventory, it can end up hurting your business more than anything.
Organizational control is one reason why inventory control is important. When you have inventory control, you have organization control as well. You’re better equipped to manage your inventory when it is organized. When your stock is organized, you have a better idea of what you have in your warehouse to fill orders and still have safety stock. Inventory control also keeps you from having too much overstock that is just taking up space or dead stock that doesn’t sell.
Quality control can be better implemented if a solid inventory control system is in place. If your inventory is properly managed and tracked, then quality can be better controlled. Inventory control not only allows you to ensure the stock you have gets rotated and stays quality controlled, but it also allows you to track the quality of the stock that is being received as well.
To manage your assets, you need to accurately record all the inventory you have. Managing your assets not only allows you to understand your company’s value and know spoilage overall, but it can also aid in this case an audit occurs. Inventory control allows for accounting accuracy.
How Inventory Control Improves Your Business
Implementing inventory control can help with your finances and your customer satisfaction. Customer service is vital to the success of a business. A lot of the time, customers get frustrated over backorders and out-of-stock items. When there is no inventory control, these things can slip through the cracks, resulting in customer frustration. When a customer is frustrated, they tend not to come back to that company most of the time.
When implementing inventory control methods, a business can address many different issues. Some issues include decreased sales, loss of loyal customers, inventory loss, spoilage, and cost-efficiency. When an inventory control process is implemented correctly, management and customer demand are balanced, improving your business’ success overall.
Getting Started with Inventory Control
Implementing an inventory control process can be overwhelming for most businesses, and it can be hard to understand the procedures and know-how to implement them successfully. The following are a few tips that can help smooth the transition.
Inventory Control System Essentials
Paying attention to the key essentials is vital. When searching for an inventory control system, you’ll need to find one that addresses all aspects of your business. A solid inventory control system should be able to track inventory, production, and sale and establish forecast formulas and vendor relationships.
Inventory Control Planning
Don’t skip the planning stage. Inventory control goes beyond the warehouse, and the control procedure should be continually planned, updated, and implemented. You’ll want an inventory control system that can adapt along with your business, so you’ll need to plan everything before executing the plan.
Inventory Management Team
Establish and appoint a solid inventory management team. Those who are assigned to keeping the inventory control system in place are pertinent. Whether this team consists of warehouse managers or pickers on the floor, they should perform tasks in an efficient and timely fashion.