Providing customers with the products they are interested in in the shortest possible time is the key to survival in a market where there are hundreds of competitors who may offer a better service than yours. Today’s customer is very clear about a few things: they want to buy the item without waiting, of high quality and with a good delivery. Businesses must adapt to these demands, and good inventory management is vital.
Being able to offer the product without the customer having to wait for it to be replenished can help us to build confidence and sell much more, so it is very important to know what is happening with the goods we have in stock and whether there is a possibility of stock-outs or any other related incidents. Normally this type of situation is usually due to poor inventory management, so today we are going to explain how to keep a practical and simple stock control that will avoid future problems.
First of all: what is stock control?
Also known as warehouse control or inventory control in Spanish, stock tracking means having an exhaustive and as up-to-date as possible control of the items and merchandise that we have available in the warehouse and that are ready to be sold. The aim is to organise, plan and control them so that if a customer asks for a product, he or she does not have to wait because it is not available.
This process is part of the logistics of a company and seeks to offer a constant service to the demand that the different items of a business may have. It is not easy to reach the break-even point of outgoing and incoming products, as each has its own sales frequency, which depends entirely on the customers. Although we can control the procurement of products from within the company, we must learn to regulate the frequency and size of orders without falling short or going overboard.
Ideally, the inflow and outflow should be the same, but this is almost impossible to achieve, so all we can do is try to reach that perfect balance, keeping our stocks as low as possible without running out of anything (without breaking down).
As you may have noticed, you have to be a bit of a juggler to have a moderately useful and convenient stock control, both for the company and for the customer who places the order. We will have to know our business and how the warehouse works very well in order to offer a quality service.
Advantages
Having a good management of the goods in our warehouse will offer advantages at a commercial level, because it will help us to sell more, but we will also be able to enjoy other benefits:
- Cost-savings. Not having as much merchandise because there is greater stock control means that less space is needed to store it, which reduces the expense involved. The one we have will require less time and human capital.
- Improved service. A well-functioning warehouse will be able to dispatch all orders so that they arrive quickly and efficiently. Today this is a huge advantage over our competitors, so we will end up generating more sales in the medium term.
- Higher sales. Providing a quality service to customers, being ready to make the sale on demand, will help build buyer confidence and, in the long run, sell more.
- Reduction of administrative tasks. Inventory and warehouse tracking, together with the tasks related to this part of the business, require a lot of time and concentration. If we have the stock under control on a daily basis and from the very beginning, the workload will be greatly reduced.
- Increased cash flow. If we can control or balance the flow of sales with the expenditure we make on them, we can enjoy greater liquidity.
How to monitor stock control
We now see how we could start to keep a more orderly inventory control. We know that this process, if you have to start from scratch, can be complicated, so we have broken it down into steps so that you can go step by step:
Set your goals. Let’s start with the basics: every company has specific needs and, although they all want to meet their demand without having more stock than necessary, they will not all take the same steps to achieve this. You have to find out what works for you: look at your industry, how your business works and make sure that personal needs are covered.
Use a stock control software. Manual counting is totally outdated and takes a lot more time (as well as possible human error) than using special inventory software. This programme will automate the process efficiently, registering inputs and outputs for each item and updating your information automatically.
All the data it generates can be consulted by the company’s employees, helping everyone to be informed of the situation in the warehouses in almost real time. It is also able to warn if an item is going to run out soon, so you can instantly locate errors in the stock and solve them without affecting the customer’s order.
Label each item. It may not be an eye-catching step, but it is certainly very important to correctly label the items in the warehouse so that you know how many and what kind of items you have. Make sure the labels do their job: to help identify each item quickly, clearly, simply and without misunderstanding.
Conduct an initial inventory. When you start with stock control, it is best to generate a stock status report (you can also add a photograph) at the beginning, known as the opening inventory. You will have to count all the items in order to know the values you are starting from in order to give the information to the software.
Conducts periodic manual inventories. While we can rely on technology to keep daily records and consult your information in case of questions or problems, we cannot completely abandon manual inventory. Technology can also make mistakes, especially in rare actions, such as breakages or replacements, which are not reflected in the computer system. In these cases it will be necessary to rely on the ‘lifetime’ control and to correct any software faults.
Analyse sales. Keeping track of sales is important, but it is just as necessary to anticipate them. It analyses demand, the company’s sales and its buyers. This way you can generate patterns and understand buying behaviour to see how much of each product you will need. It is not necessary to have 100% correct data, as a sales analysis will always make stock control more efficient.
It retains a safety stock. This would be the last step: to have ’emergency reserves’, so to speak. The market and the sale of products is unpredictable, so we have to be prepared for anything. Always have a safety stock available in which you have a small quantity, usually small, of product that you do not plan to sell. This will cover any unforeseen emergencies.
Tools for stock control
If you want to start implementing technological tools that help you enjoy the benefits of stock management and control, here are some of the most popular ones. They will help you both in the stock itself and, indirectly, to improve customer service, increasing its quality and differentiating you from the competition:
Optimus Price. This software will help in the optimal calculation of prices, ascertaining the customer’s need for it and managing the relevant calculation. To perform all these tasks, it relies on data such as product demand, competitors, etc. and establishes the best price for the product.
Axos. Designed for companies in sectors such as distribution and warehousing, this software focuses on solving specific problems of this type of company, as they handle many products, clients, prices, stocks, etc. It works in stages: system consulting, data migration and publication, training, customisation of business reports and parameterisation.
Odoo. This integrated ERP software is made up of several parts: CRM, website and e-commerce, invoicing, accounting, manufacturing, warehouse and inventory management… You can plan business resources because it unifies processes in a single organisation. It is made up of a series of applications that automate and track movements within the company, providing all the information for workers from any device.
Stock control, as you have seen, ultimately affects the performance and reputation of the whole company, as it helps to provide better customer service and to find out more about the performance of the business and its ‘logistical health’. If you are thinking of upgrading this part of your business to save money and manage it better, but don’t know how to start, we at MRO by Servitec can help you.
For more than 30 years we have been helping companies to optimise the management of their industrial assets and improve the operational efficiency of their business. Our services enable the integration of supplier panels and improve aspects such as part traceability, lead time and safety, among others. All the solutions we offer are designed to be efficient and to optimise supply management through the principles of supply and supplier consolidation. If you would like us to start helping you in your business, you can contact our team for personalised advice on everything you need.
