Tips for Effective Stock Control and Inventory Management
- Check All Incoming Stocks. Your first focus should be checking on whether the delivered stock is exactly what you ordered from your supplier.
- Store Stocks Wisely. It is easier to place your stock wherever it fits. ...
- Create Clear Labels. Large enterprises make use of radiofrequency identification or RFID to easily track, update, and monitor their stock items and levels.
- Track Expiry Dates. If you offer expired products, then you will be liable for hefty fines if the product gets delivered to the customers.
- Avoid Compounding Problems. When you miss something like keying in important details, you are bound to compound your problems. Let’s face it.
- Set Threshold Stock Levels. Every business has different peak times for sales. Different suppliers also have different lead times.
- Manage Returns Effectively. One of the biggest issue surfaces when businesses don’t document returns well. This does not only create inefficiencies with quality control.
- Monitor Stocks Consistently. You should always keep track of your stock in real-time. In fact, you should have it on a dashboard.
- Keep Priorities in Check. Keeping track of inventories altogether is a time-consuming and exhausting task. So, you should keep your priority straight.
- Use an Automation Solution. Today, it is best that you consider using automated solutions for inventory management and controlling of your stock levels.
- Prioritize your inventory. ...
- Track all product information. ...
- Audit your inventory. ...
- Analyze supplier performance. ...
- Practice the 80/20 inventory rule. ...
- Be consistent in how you receive stock. ...
- Track sales. ...
- Order restocks yourself.
How to pick the right inventory control system?
- Purpose-designed to handle inventory management and key supply chain functions
- A single source of truth for data
- Updates happen in real time
- Repetitive tasks can be automated
- Lower risk of errors
- End-to-end workflow management
- Your data is often secure and protected on enterprise-grade servers, even if you run a 1-person operation
What are the methods of inventory control?
The four main inventory control methods are:
- ABC System – Organize items into three groups.
- Min-Max System – Set high and low inventory quantities.
- Two-Bin System – Have a main stockpile of goods and a backup stockpile.
- Order-Cycle System – Schedule cycle counts on a regular basis.
What are the methods of stock control?
Stock control and inventory
- Types of stocks
- How much stock should you keep?
- Stock control methods
- Stock control systems - keeping track manually
- Stock control systems - keeping track using computer software
- Using RFID for inventory control, stock security and quality management
- Stock security
- Control the quality of your stock
- Stock control administration
What is the best stock control software?
What Are The Best Inventory Management Software?
- Zoho Inventory. Best for businesses looking for a cost-effective inventory management tool. ...
- QuickBooks Commerce (Formerly Inventory Management). Best for medium-sized businesses requiring tracking sales, inventory, and assembly. ...
- SellerCloud. ...
- ChannelAdvisor. ...
- Fishbowl Inventory. ...
- nChannel. ...
- Katana. ...
- 4PSite. ...
- TradeGecko. ...
- Dear Systems. ...
What is the best way to manage inventory?
Inventory management techniques and best practices for small businessFine-tune your forecasting. ... Use the FIFO approach (first in, first out). ... Identify low-turn stock. ... Audit your stock. ... Use cloud-based inventory management software. ... Track your stock levels at all times. ... Reduce equipment repair times.More items...•
What are 4 stock control methods?
What are the methods of stock control?Just-in-time (JIT)FIFO.Economic Order Quantity.Vendor-managed inventory.Batch control.
How do you organize inventory?
HOW TO ORGANIZE WAREHOUSE INVENTORYUse information labels and use photos of products.Store products sold together near each other.Keep best selling products close to the front.Make clear aisles throughout the warehouse.Stack inventory higher to make use of vertical space.Use mobile shelving units for seasonal products.More items...•
What is the 80/20 rule in inventory?
The 80/20 rule states that 80% of results come from 20% of efforts, customers or another unit of measurement. When applied to inventory, the rule suggests that companies earn roughly 80% of their profits from 20% of their products.
What are the 3 major inventory management techniques?
In this article we'll dive into the three most common inventory management strategies that most manufacturers operate by: the pull strategy, the push strategy, and the just in time (JIT) strategy.
How do you keep track of stock?
The simplest way to track inventory is to manually count your inventory every two weeks and compare the numbers versus sales. That's known as periodic inventory. There is also perpetual inventory, where an inventory management app or software is used and integrated into your business's POS.
What are the 4 types of inventory?
There are four main types of inventory: raw materials/components, WIP, finished goods and MRO.
How do you manage inventory in Excel?
How to Create An Excel Inventory Management SystemCreate a spreadsheet. ... Add any necessary product categories as columns. ... Add each product that you carry to the spreadsheet. ... Adjust the quantities as you make sales. ... Time-consuming process. ... Lack of automation and real-time reporting. ... Greater chance for errors.More items...•
How do I make an inventory spreadsheet?
How to Create an Inventory Sheet:Open a new spreadsheet in Microsoft Excel, Google Sheets, Numbers or another program. You can use whichever spreadsheet program you feel comfortable with. ... Name your headings. ... Enter items and their corresponding information. ... Save the sheet and update during inventory.
How do small business manage stocks?
17 Tips for Small Business Inventory ManagementUse the Inventory Method That's Right for Your Business. ... Understand and Accurately Forecast Demand. ... Identify Low-Turn Stock. ... Track Stock Levels. ... Audit Stock Levels. ... Use Just-in-Time When Feasible. ... Focus on Quality Control. ... Consider Drop Shipping.More items...•
What is ABC inventory analysis?
ABC analysis is an inventory management technique that determines the value of inventory items based on their importance to the business. ABC ranks items on demand, cost and risk data, and inventory mangers group items into classes based on those criteria.
What is ABC material?
In materials management, ABC analysis is an inventory categorisation technique. ABC analysis divides an inventory into three categories—"A items" with very tight control and accurate records, "B items" with less tightly controlled and good records, and "C items" with the simplest controls possible and minimal records.
What are the 4 types of inventory?
The four types of inventory are raw goods, work-in-progress (WIP), finished goods, and maintenance, repair, and operations goods (MRO). Understandi...
What are the 3 major inventory management techniques?
Three common inventory management techniques are first in, first out (FIFO), last in, first out (LIFO), and just-in-time (JIT) inventory. Each of t...
What are the five elements of inventory management?
Five key elements of inventory management are categorizing and organizing your inventory, maintaining updated inventory records, auditing inventory...
What are the main inventory formulas?
The main inventory fomulas used by retail businesses are inventory turnover, sell-through rate, days inventory outstanding (DIO), economic order qu...
What is inventory management?
Inventory management is the part of supply chain management that aims to always have the right products in the right quantity for sale, at the righ...
Aren’t spreadsheets a good way to manage inventory?
Spreadsheets aren't an effective inventory management tool because they have to be updated manually, which is time consuming and means the data is...
Do I really need software to manage my inventory?
Inventory management software is key to effectively running a modern retail business. Square’s inventory management software connects with your poi...
Isn’t inventory management software expensive?
Not necessarily. When some software firms may charge you a hefty sum for their programmes, Square’s cloud-based software is completely free.
What is inventory control?
Essentially, it refers to when you have control over your stock, typically due to effective inventory management processes. It’s much easier to maintain control of your inventory with centralized inventory management.
Why is reorder point important?
Calculating reorder points is vital for effective stock management , but it can be incredibly time consuming when dealing with a large number of products. A powerful inventory management system makes it a lot easier.
How to calculate inventory turnover?
Also known as stock turn, inventory turns, and stock turnover, this formula is calculated by dividing the cost of goods sold (COGS) by average inventory.
How does inventory affect sales?
Inventory directly affects sales (by dictating how much you can sell) and expenses (by dictating what you have to buy). Both of these elements factor heavily into how much cash you have on hand. In short, better inventory management leads to better cash flow management.
What is inventory management?
Inventory management is the process of organizing and managing stock throughout the supply chain. The goal of inventory management is to minimize the cost of holding inventory, while keeping stock levels consistent and getting products into customers’ hands, faster. It’s the heart of a successful retail business.
Why is inventory management important?
Effective inventory management is essential for ensuring a business has enough stock on hand to meet customer demand. If inventory management is not handled properly it can result in a business either losing money on potential sales that can’t be filled or wasting money by stocking too much inventory.
What is dead stock?
Dead stock is stock that can no longer be sold but not necessarily because it expired— it could have gone out of season, out of style, or otherwise become irrelevant. By adopting a diligent strategy, you can address this costly inventory mistake.
What is a square POS?
Square’s retail POS offers robust inventory management software that updates in real time and lets sellers manage their inventory from anywhere. Our system is great for omnichannel retail and syncs with your brick-and-mortar point of sale and online store.
Why are spreadsheets not effective?
Spreadsheets aren’t an effective inventory management tool because they have to be updated manually, which is time consuming and means the data is almost always out of date. Also, spreadsheets can’t scale with your business, can’t communicate with your POS, and don’t show you how your products are selling.
What is drop shipping?
Instead, a wholesaler or manufacturer is responsible for carrying the inventory and shipping the products when a consumer buys from your store.
What is inventory management?
Inventory management is the part of supply chain management that aims to always have the right products in the right quantity for sale, at the right time. When done effectively, businesses reduce the costs of carrying excess inventory while maximizing sales.
Why is it important to evaluate your business?
It’s important to evaluate your business on a regular basis to ensure that you’re on track to succeed. One of the most integral parts of your business is inventory management.
What should be sold in the same order as they were purchased?
Goods should be sold in the same chronological order as they were purchased or created. This is especially important for perishable products like food, flowers, and makeup. A bar owner, for example, has to be cognizant of the materials behind the bar and apply FIFO methods to improve bar inventory.
What is the app that Square uses to manage inventory?
Square has two apps small businesses can use to manage their inventory: Square Point of Sale and Square for Retail. If you own a business with only one location, Square Point of Sale should be a great fit for you.
How to do inventory?
It can do the following: 1 Tell you how much specific items in your stock are costing you. 2 Monitor items arriving and leaving in more detail than would be possible with traditional spreadsheets. 3 Connect to other technology. This might mean using QR codes and bar codes and even sensors that provide real time information about the movement of inventory. 4 Help you prioritise your stock, so you can understand what you have to order more of and do so more frequently. 5 Show you the balance between high-ticket items that are sold less frequently and those that are less expensive and account for most of your volume. 6 Standardise how you receive stock, so staff members handle it consistently and tick all the necessary boxes. 7 Allow you to see what’s out of stock, so you can reorder the right quantity quickly and easily.
Why is digital inventory management less effective than cloud computing?
Because of its cost and complexity , digital inventory management was once the preserve of larger companies but now prices are falling and systems are becoming more adaptable thanks to the growth of cloud computing. There are a number of reasons why the traditional spreadsheet is less effective than cloud computing technology.
Why is it important to have the right processes in place to manage inventory?
Putting the right processes in place so you can effectively manage your inventory will mean your business can work smarter and ultimately be more successful.
What is the biggest expense in a business?
Inventory is the biggest expense – and the greatest liability – for many businesses. How well managed it is and how quickly and efficiently items are moved from storage to where they’re needed tells you a lot about how well your business is run on a purely practical level.
What is inventory management?
Essentially, managing inventory covers purchasing, storing and then using or selling items. These might be raw materials, manufacturing components, semi-complete products that are awaiting their final parts, or finished products that are waiting collection and delivery.
Why is inventory management important?
The effectiveness of your inventory management can dictate the success or failure of your business. In these difficult economic times with companies facing uncertainty and challenging market conditions, it’s more important than ever that you’re taking advantage of software rather than trying to manage your inventory and stockpiles with spreadsheets.
What are the advantages of accounting software?
Another advantage of accounting software over spreadsheets, as a growing number of small businesses are discovering, is that you can see the value of stock you’re holding, that is incoming and is outgoing in real time. You can instantly see your sales figures for any given period and respond accordingly.
What are the different types of inventory?
Before you can tackle effective inventory management, you'll need to understand exactly what inventory comprises. These are some of the many different types of inventory: 1 Raw materials, or materials you use to manufacture your products 2 Unfinished products, works in progress that are not ready to be sold 3 Finished products, which are typically stored in a warehouse until sold or shipped 4 In-transit goods, which are no longer in the warehouse and are being transported to their final destination 5 Cycle inventory, or products that are shipped to a business from a supplier or manufacturer, then immediately sold to customers 6 Anticipation inventory, or excess products in anticipation of a surge in sales 7 Decoupling inventory, which are parts, supplies, or products set aside in anticipation of a slowdown or halt in production 8 MRO goods, which stands for "maintenance, repair and operating supplies" and supports the production process 9 Buffer inventory, or "safety stock," which serves as a cushion in case of an unexpected issue or need for more inventory
What is inventory management?
Inventory management involves ordering, stocking and using a business's materials or products. There are various types of inventory, like raw materials, cycle inventory and MRO goods. Prioritizing your inventory helps you understand what you need to order or manufacture more frequently so you can continuously fulfill your customers' needs.
Why is inventory management important?
Inventory management is a crucial piece of a business's profitability , but a lot of small businesses don't practice good management when it comes to the items they sell. Some businesses have too little inventory, unable to meet customers' expectations by supplying enough available products.
Why is excess inventory important?
Excess inventory not only ties up valuable cash flow, but it also costs more to store and track. Effective inventory management lies somewhere between these two extremes. While it requires more work and planning to achieve an efficient management process, your profits will reflect your effort.
What is MRO goods?
MRO goods, which stands for "maintenance, repair and operating supplies" and supports the production process . Buffer inventory, or "safety stock," which serves as a cushion in case of an unexpected issue or need for more inventory.
What is the B group?
The B group is what's in between: items that are moderately priced and move out the door more slowly than C items but more quickly than A items. 2. Track all product information. Make sure to keep records of the product information for items in your inventory.
What is unfinished product?
Raw materials, or materials you use to manufacture your products. Unfinished products, works in progress that are not ready to be sold. Finished products, which are typically stored in a warehouse until sold or shipped. In-transit goods, which are no longer in the warehouse and are being transported to their final destination.
11 inventory control procedures and techniques
Every business will apply its own way of inventory control. However, at the end of the day, managing stock efficiently is the target that everybody wants to achieve. There are a few common procedures and inventory management best practices that can instruct you on how to manage inventories more efficiently.
How inventory control can affect your business?
Incorporate an adequate inventory management process with your system can help businesses ensure their financial health and stock level that satisfy customers’ needs and expectations. According to netsuite.com, 62% of customers have stopped buying from a company because of bad customer service.
Conclusion
In general, inventory management can affect the success or failure of a business. Having proper visibility into your stock at any required moment is essential for success.
Why Use Excel For Your Inventory System?
Well, you might think it’s a dated way to manage inventory, but still, there are some business start-ups with limited funds managing their inventory with a pen, paper, and log sheets.
Set Up Your Own Excel Sheet
You can create your own excel sheet, and here are the things you need to create tabs for.
Why is Excel Not the Best Tool for Inventory Management?
If you started with Excel recently, you might not have faced it’s limitations yet! But a single error via Excel can also be an expensive affair.
Essential Resources
A creative human existing on the planet just like others, nothing new. A poet who loves to write stories that can influence people and hence can write anything (believe me I can). Would choose watching movies over novels.
