To thrive in today’s ultra-competitive market, a company’s fulfillment operations must be fine-tuned. One aspect of business that can set a company apart from the rest is inventory control. Here’s a quick summary of what this entails, as well as a few tips to master your company’s inventory control system.
To begin, what exactly is inventory control? It is the process of carefully optimizing inventory levels using science-based approaches. It is also known as stock control. It entails a variety of activities, systems, and procedures all aimed at reducing operational costs while maintaining an adequate level of stock to meet customer demands.
It has the potential to increase profit margins when done correctly by using a the resources at hand most efficiently. Such resources include raw materials, individual parts, completed goods, and manufacturing supplies. If inventory is not properly measured, verified, or used, it can lead to costly setbacks such as wastage, surpluses, obsolescence, stockouts, and disappointed customers, all of which can jeopardize a company’s finances.
It is important to note that, while inventory control is a component of inventory management, the two terms are not interchangeable. The primary distinction is that inventory control deals with stock that is already on hand and maintained by the company, whereas the other deals with incoming inventory, demand forecasting, and replenishment.
How can a company improve its stock control? Investing in modern management software is one of the first steps. Technology has advanced so rapidly that companies in the logistics industry cannot afford to fall behind. Having the right inventory control and management software can help you keep up. It is also a necessary component of another method of improvement known as a perpetual inventory system.
This method is highly specialized and refers to continuous, automated inventory tracking in near-real time. “Perpetual counting” can provide more accurate data than periodic counts, which are also more susceptible to shrinkage and fraud, by utilizing innovative programming and equipment. Such precision could be invaluable during times of market volatility and supply chain disruption.
Collaboration with an accounting or business compliance service is another way to improve operations. These professional services, which are especially beneficial for small-to-medium-sized businesses, could assist their clients in developing a more effective inventory control system, setting up bookkeeping and accounting systems, complying with industry regulations, and much more.
Looking for more ways to improve inventory control? For more information, see the accompanying resource!