Every resource a company uses to create its goods or services, from raw materials to completed commodities, is subject to stock management. Therefore, stock management includes all facets of a company's inventory.
Other names for stock management include stock control and inventory management.
Here, we will discuss what stock management is, why it’s an important aspect to businesses and what mistakes to avoid when partaking in stock management.
What is stock management?
Ordering, storing, managing, and regulating goods is known as stock management.
Every resource a company uses to create its goods or services, from raw materials to completed commodities, is subject to stock management. Therefore, stock management includes all facets of a company's inventory.
Other names for stock management include stock control and inventory management.
Why inventory management is important
Increases efficiency and productivity
Your productivity and efficiency can be greatly increased by using stock management tools like bar-code scanners and stock management software. These technologies will assist in getting rid of manual processes so that your staff may concentrate on other, more crucial facets of the company.
Improves the organisation of the warehouse
A well-organised warehouse is supported by a good stock management plan. You will struggle to manage your inventory if your warehouse is poorly organised. Many businesses decide to maximise the utilisation of their warehouses by grouping the top-selling products together and positioning them in convenient locations. In turn, this aids in expediting the order fulfilment procedure and maintains client satisfaction.
Saves time and money
You can save yourself the trouble of having to conduct an additional stock take to make sure your records are accurate by keeping track of which products you have ordered and in stock. Additionally, a sound stock management plan helps avoid wasting money on items that aren't in high demand.
Improves the precision of inventory orders
You can determine exactly how much inventory you need to have on hand at any time with the aid of good stock management. This helps avoid product shortages and enables you to maintain precisely the right amount of inventory without filling your warehouse with extra goods
Bad examples of inventory management
Using outdated methods to track items
As your business expands, manual inventory monitoring becomes time-consuming and error-prone. Ordering problems will occur from you always being one step behind your real inventory levels.
Using Excel/electronic spreadsheets to track inventory is also prone to resulting in errors.
Having too large of an inventory
Large amounts of inventory can reduce profits in addition to giving management more hassles. The more inventories you buy, the more cash is locked up in unused goods. Your cash flow may suffer significantly as a result.
You will need to sell your inventory in order to see any improvement in your cash flow. Meanwhile, you can find yourself needing to borrow money to cover bills, wages, or other costs in order to keep your company afloat. There will also probably be interest charges for these loans.
By doing this, you not only lose money, but you also run the risk of missing out on a chance to advance your company because of a lack of available funds.
Inadequate forecasts and reports
Businesses make the mistake of ordering too much inventory when they don't use or have access to reliable statistics on things like sales trends, best-selling products, and consumer behaviour. When this occurs, businesses face issues including an overstocked inventory, inadequate orders, shortages, and clientele loss. Businesses may estimate their customers' future behaviour and order in accordance with that forecast to satisfy client demand while staying within their budgets thanks to accurate real-time reporting that is available 24/7.
How to manage stock
Here are some top tips to help you out.
Set minimum stock levels
Setting "minimum stock levels" for each of your products is the first and most important step. This is the minimum quantity that must always be on hand, so when it drops below this predetermined level, you know it's time to place an order for more.
First In, First Out (FIFO)
Many companies adhere to the stock management principle known as "FIFO." Therefore, products that were purchased initially (first-in) should be sold first (first-out). This is highly helpful to prevent spoilage, wear and tear, or obsolescence of supplies, especially for perishable products.
Quality control
Never forget to examine the stock's quality. This might be as easy as asking someone to conduct a brief quality check while reviewing your stock to search for any indications of damage.
Additionally, double check the labels on your products to make sure they are accurate to avoid any errors during stock monitoring and tracking.
Have a contingency plan
Risk management frequently uses a contingency plan to get ready for potential future situations or incidents.
The following problems with stock management are just a few examples:
· Unexpectedly high sales cause you to run out of stock
· Lack of available storage space
· Inaccurate inventory calculations result in having too few things to sell
· When a supplier runs out of inventory, and you still have orders to fill
· Late stock delivery
Keep track of your stock efficiently with Label Source
If you wish to implement a labelling system that will allow you to locate and track your assets at any time, Label Source's asset tags are perfectly suited to the job. These robust numbered labels are available in a wide range of different materials, and they can be customised to include your company name, your logo, and other information.
