Your inventory control process is critical to making sure that your business can maintain the proper level of stock, keep up with the demands of your customers, and avoid potential delays. Do you have effective inventory control in place for your business, or are you struggling to maintain the stock you need to keep up with customer needs?
What is Inventory Control?
Inventory control is the process of keeping track of the stock you have on hand versus the stock you need to have on hand, including ongoing changes in demand based on current client needs.
Effective inventory control allows you to keep track of the changing and growing needs of your business. Your inventory control needs may include tracking what you have on hand in your warehouses, your stores, and facilities across the country or, for smaller businesses, it may be focused primarily on what is available in your shop.
Inventory control may include tracking:
- Raw materials needed to make certain items
- Work in progress
- Finished, shelf-ready goods
- Repair and operating supplies
Inventory control is different from inventory management in that inventory control keeps track of the items already in your physical locations, while inventory management deals with the supply chain as a whole, including ensuring that you have a steady flow of inventory through your business.
The Importance of Inventory Control
Inventory control is important for a number of reasons.
1. Manage Customer Demand
If you don’t have the stock on hand to manage the needs of your customers, you will miss vital sales. Not only that, but decreased inventory may also cause customers to seek out their needs elsewhere–and in some cases, which may mean that your customers stick with that new business, rather than returning to you.
2. Maintain Your Supply Chain
Part of the inventory control process is ensuring that you have adequate levels of all stages of inventory, including raw materials and the materials needed to help keep your business running effectively.
With effective inventory control measures, you can ensure that you have a supply chain in place that will allow you to keep up with the needs of your business–and that, if supply chain delays and challenges do occur, you can better protect your business.
3. Manage Working Capital
Many businesses, especially small businesses, often struggle with working capital. When you purchase stock, you have the expectation that the stock will sell within a reasonable period, allowing you to keep that steady flow of capital through your business.
Inadequate inventory management, on the other hand, can make it difficult for you to maintain the steady flow of working capital your business really needs.
4. Avoid Overstock
While you want to make sure you have enough inventory on hand to meet the demands of your customer base, you also want to make sure that you do not have too much inventory on hand. Overstock may mean that you end up having goods go bad or break before they are purchased, which can mean financial losses for your business. Often, you will end up selling off overstock at much lower prices, which can lead to financial losses.
5. Keep Up with Current, Real-Time Inventory
Ideally, your inventory control measures should allow you to keep up with real-time inventory.
Your inventory needs can change dramatically and unexpectedly. By tracking real-time changes in inventory, you can often do a better job of keeping up with immediate needs–and you can adjust your ordering accordingly.
6. Maintain Better Overall Inventory Quality
By keeping tight control over your inventory, you can often do a much better job of maintaining your inventory quality.
Inventory control can help avoid unnecessary damage and make it easier for you to ensure that perishable items do not go bad before you have a chance to sell them.
Check out our guide to sourcing raw materials!
What Does Inventory Control Mean for Your Business?
For a functioning, inventory-based operation, there are several things that inventory control may mean for your business.
1. Organize Your Floor
Inventory control may start with a clearly organized store and warehouse, or an organizational system that allows you to clearly see what you have on hand and take inventory with ease.
2. Automate
Ideally, you should automate as much of the inventory control process as possible. Automated processes ensure that your business keeps running smoothly and that you regularly have the inventory you need on hand.
3. Track and Document
You need to track and document your inventory across all your locations, including warehouses and stores. Make sure you know where your inventory is, including inventory that may have moved between facilities. You also need to document when inventory has moved into that location and rotate it to ensure that it moves out at the right time.
Furthermore, make sure you’re tracking your inventory trends. You may want to consider when specific items are most likely to move out and note any changing trends in inventory demand.
4. Understand Your High-Value Goods
Keep track of your highest-value goods and what they mean for your business. You may need to prioritize inventory of those high-value goods to ensure that you can keep up with customer needs and protect your business.
5. Set Your Reorder Points
With effective inventory control, you can determine when you most need to reorder vital items. Reorder times may be different for different items, depending on your business’s unique needs and the needs of your target audience.
Effective Inventory Control Matters
With an effective inventory control system in place, you can do a much better job of managing the ongoing needs of your business and your customers. With inventory control, you’ll know what goods you have on hand, what items you need, and where those items are in your system–and with real-time tracking, you can adapt to any needs immediately.
Want to learn more about how inventory control can help your business? Contact us today for more information about our inventory control and management systems.
