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What is inventory control?

What is inventory control?

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Inventory control system consists of systems and is the procedure of managing a company’s inventory items, in their own warehouse or over any other locations. It monitors the movement and comprises management of goods from the time you have them in warehouse storage to their final customer destination or disposal of the items that are not ideal. An inventory control not just monitors their movement, usage, and storage but also helps businesses in maintaining a sufficient supply in good condition. Proper inventory management system can keep track of your purchase orders to ensure that you are keeping the optimal amount of each product. While you can handle the control system manually, there are automated systems available that can help manage your stock levels, and also help reduce costly human error.

Why inventory control?

Establishing an inventory management control system allows you to set reorder points and enables you to satisfy customer demands and maximize profits. These systems can be kept in place to help with forecasting. Warehouse managers as well as production planners should adhere to the following inventory control process in controlling their inventory:

  • Receiving, storing, and transferring goods
  • Barcode scanner integration
  • Placing goods in strategic locations
  • Keeping track of inventory items and their locations with sales and purchase orders in the warehouse
  • Documenting product locations, details and histories
  • Monitoring the complete condition of items in stock
  • Fulfilling purchase orders with stock on hand
  • Integrating barcode scanners
  • Forming reports and adjustments

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Tips for effective inventory control.

Here are some of the tips for effective inventory control:

  • Categorize all incoming stocks: Check out whether all the incoming delivered stock is exactly what you have ordered from your supplier because oftentimes suppliers may get stock orders incorrectly packed. This can put your sales and credibility at. Whereas in some cases, you might also get more stock items than you have actually wanted. And without checking, you won’t be able to make necessary returns in time or before the next order.
  • Audit your inventory: Many businesses do a comprehensive count daily, weekly, monthly or once a year spot checks of their hottest items. Regardless of how often you count it, ensure to physically count your inventory regularly so that it matches up with what you think you have.
  • Track product information: Make sure to track and keep records of all the product information for goods in your inventory. This information must include SKUs, barcode data, suppliers, locations and lot numbers. You may also want to consider tracking the item cost over time, so that you’re aware whether there is change in the price, like scarcity and seasonality.
  • Store stocks wisely: It may seem easier to put your stock wherever it fits however, this can make it even harder to track the product. If you have similar items along with similar packaging then, while in a rush, you or your staff may make grave errors. Therefore, it is best to have a clear system and an organized stockroom that everyone can easily learn.
  • Analyze supplier performance: An unreliable supplier not just affects your stock but can also cause problems for your inventory. If you have suppliers that are frequently late with deliveries or short an order then it’s time to take action. Discuss the issues with your supplier or switch partners so that you won’t have to deal with uncertain stock levels and the possibility of running out of inventory.
  • Create an internal SKU system: Creating an internal SKU system will help to quickly identify and track products during regular activities. SKUs typically use a combination of letters and numbers that are arranged in order to deliver key details about an item at a glance. With this your employees know exactly what an and where the item is and other key details such as how it displays or ships.
  • Practice the 80/20 inventory rule: Prioritize inventory management of 20% of stock items because 80% of your profits come from 20% of your stock. It will help you understand the entire sales lifecycle of these goods, including how many items you have sold in a week or a month, and closely monitor them. These items will make you the most money therefore, don’t fall short in managing them.

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