Let's start with a clarification: inventory control is not the same as inventory management.
Inventory control is the regulation of the inventory that you have in your store or warehouse – managing the stock you have.
Inventory management tracks inventory through the supply chain – from sourcing to order fulfillment, focusing on what stock to order when, in what quantities, and from which supplier.
We focus on inventory control, consider some best practices to help save your business some money and time.
Inventory control is warehouse management and can be used to maximize profits without impacting customer satisfaction. It requires you to know your stock – how much of what stock is on hand, where it is, and its quality. It also means implementing appropriate procedures to ensure your business can operate effectively.
Inventory control includes making comprehensive inventory lists and counts, syncing stock on hand with sales and purchase orders, and recording product details, histories, and locations.
Whether your business is reaching its next growth phase, or launching or expanding its eCommerce capacity, you need to have savvy inventory control and management to build a sustainable, profitable, and scalable business.
Inventory control can make life easy; it just requires a little work. Inventory control is immaculate stockrooms and warehouses and the effective use of space. It's reduced admin and quality products as it eradicates obsolete and damaged goods. All of which is good for your bottom line.
Metrics such as product performance help ensure that you purchase the right inventory at the right time to avoid costly mistakes. For example, ordering too little of a popular item or not enough of another.
With a clear overview of your stock, you can cater to a growing customer base. Having visibility of what's available means that no customer order is left unfulfilled, keeping customer satisfaction high.
Use inventory control to forecast future purchasing trends and inform stock orders. Ensure supply and demand levels are in sync to increase profitability.
Relying on manual record-keeping to track stock numbers, sales, inventory flows, and cash flow isn't always sustainable as a business grows. However, there is a solution.
The following are a sound basis for inventory control:
Create an inventory control plan. Your inventory control plan should address your orders – from purchase to sale – and consider reducing wasted warehouse space. It will also include stock forecasting and how to nurture supplier relationships.
Plan, implement, sleep, repeat. Inventory control is ongoing and will need to be updated regularly. Tracking inventory metrics – such as product performance, sales revenue, average items per sale, etc. – and use these to inform your plan, making changes as required.
Ensure you have critical stock. Critical stock is your best sellers – the money makers. You should have an inventory control process in place to ensure essential stock is always available.
Review your shipments. Don't make the mistake of accepting something at face value to be left to deal with the financial ramifications of inventory loss. Review your orders.
Inventory costs vs. stock on hand. It's important to strike a balance between inventory costs and the benefits of having stock on hand. Accurate forecasting can help you to achieve this.
Choose a scalable system. When investing in inventory management software, while it may be tempting to go for a cheap or free system, if you plan to grow your business, invest in a cloud-based system that can grow with you. The benefits will include valuable analytics that will even help you with that growth journey.
We look at cash flow basics, how cloud-based apps are helping, and the metrics that matter.
We're still waking up to the impacts of COVID-19. Businesses are navigating economic uncertainty and changing customer behaviors. We focus on the hospitality sector and building financial resilience.