Stock control, or inventory control, is the maintenance of the right amount of stock so a business can match customer demand without a waiting period, while still keeping the costs of holding stock to a minimum. This is a delicate balance for business selling physical products, and while it seems theoretically simple, in practice it’s quite complicated! Economic downturns, seasonal fluctuations, consumer trends, and even the weather all factor into stock control. So here are some tips for manufacturers who are struggling with it!
- Stick to a single type of inventory control system
Whether a periodic or perpetual system, choose the one that suits your business best and then stick with it.
- Review current inventory
Determine not only what you have on hand, but also its value. This includes finished goods and any raw materials. Sales reports will help to identify bestsellers as well as slow-moving/old items.
- Determine what ideal stock levels are
Certain stock will always be needed, and deciding on what maximum and minimum stock levels are for each item is key. Identifying parameters makes working with stock far easier. Accurate stock records also go a long way in keeping up with changing stock levels as well.
- Review your inventory control constantly
- Review purchasing patterns – they should be based on sales history and forecasted demand.
- Monitor inventory metrics – stock turn rate can tell you if your current process is working.
- Order less stock, but more frequently – without reducing sales, this can help to improve liquidity.
- Before introducing sales or promotions, ensure that you have sufficient stock for demand.
- Have a backup plan for items that don’t sell as planned – this could be via donation or return to suppliers.
- Review sales policies – your sales teams can help to sell fast-moving items strategically and also clear out slow-moving items.
- Efficient storage – picking and packing should be efficient, and ease of access to goods should depend on how fast they sell.
- Track all products information
This includes barcode data, country of origin, lot numbers, etc. It can help to inform decisions, and helps keep records complete.
- Look into your supplier’s performance
The right supplier can make inventory control a dream – and the wrong one can make it a nightmare if their deliveries are constantly delayed, their goods come damaged, or they’re just unreliable. Stock reorders should also be done personally so that you’re sure of them.
- Use the right software
Technology can greatly impact the process of keeping up with controlling inventory. Not only inventory management software, but mobile scanners and point-of-sale systems as well. Flowlens for example is an affordable software that is geared towards small assembly, build-to-order, and engineer manufacturing businesses. Software like this can help take the burden off managers by planning real-time stock requirements and purchasing to avoid shortages, managing BOMs, sub-assemblies, parts and suppliers, planning jobs, tracking progress, WIP and profits.
There are many options for software such as this that integrate with other software and make stock control far, far easier.