An organization’s fulfillment operations must be efficiently honed to survive in today’s ultra-competitive market. One aspect of business it really pays off to optimize is inventory control. Below is a brief look into what this practice entails, as well as a few ways a company can enhance its inventory control system.
First, what is inventory control? Also referred to as stock control, it is the process of carefully optimizing inventory levels via science-based approaches. It involves an assortment of activities, systems and procedures all designed to keep operational costs as low as possible while still maintaining an adequate level of stock to meet customer demands.
When done right, it has the power to improve profit margins by making the best use of a business’s resources. Such resources include but are not limited to raw materials, components, finished products and operating supplies. If, however, inventory is not sufficiently measured, verified or used correctly, it could lead to costly setbacks, such as spoilage, overages, obsolescence, stockouts and disappointed customers — all of which could put a company at financial risk.
It’s important to note that although inventory control is an element of inventory management, the two terms are not synonymous. The main differentiator is that inventory control handles the stock already on hand and maintained by the company, while the other deals with incoming inventory, demand forecasting and replenishment.
How might an organization enhance its stock control? One of the first approaches is to invest in modern management software. Technology has come so far, so fast, and — in the realm of logistics — companies can’t afford to be left behind. The right inventory control and management software could help to keep pace. It also is an essential component of another method of improvement: a perpetual inventory system.
Highly specialized, this method refers to continuous, automated inventory tracking in near-real-time. Using innovative programming and equipment, “perpetual counting” can provide more accurate data than periodic counts, which are also more susceptible to shrinkage and fraud. Such accuracy may be invaluable in times of market instability and supply chain disruption.
Another way to enhance operations is to partner with an accounting or business compliance service. Especially advantageous for small-to-midsize companies, these professional services could help their clients develop a more effective inventory control system, set up bookkeeping and accounting systems, comply with industry regulations and so much more.
Looking for additional methods for improving inventory control? Check out the accompanying resource for further information!
