How to Do Effective Stock Control
Managing your inventory can be one of the hardest things about keeping a business afloat. As companies grow larger, it gets more complicated to figure out how to handle stock control. Whether you’re running a bricks-and-mortar trade counter or online business, you need to maintain an appropriate quantity of stock. Carelessness with stock can lead to substantial loss of revenue, as you might find that you have nothing to sell at all.
Fortunately, there is one way to avoid this. One of the most important parts of supply chain management, stock control can streamline your inventory management and reduce holding costs. Read on as we dig deeper into this crucial topic.
What is stock control and why does it matter?
This is the simple part. Stock control is a process by which business owners or managers know how much stock they have at any one time. The main aim of stock control is to ensure that a business always has enough of the products they sell. It also keeps track of inventory, updates stock figures and even helps with features such as automated reordering.
As you can imagine, this is of paramount importance for online sellers, as they might not have direct physical access to the items themselves. Stock control helps wholesalers and retailers to stay on top of all inventory-related activities. For example, an efficient stock control system will flag when a key product or material is close to running out.
What are the best tips for stock control?
Most customers won’t appreciate that holding stock costs money. Storage space, insurance and labour don’t come for free. All companies need to invest properly in stock control, as it will save them cash in the long run. However, businesses that are just starting out or that have only recently started growing might find stock control too overwhelming. Fortunately, there are a few tips that will simplify the process.
Stick to the Pareto principle
You might have heard of the Pareto principle, also known as the 80/20 rule. Basically, this principle dictates that roughly 80% of your profits come directly from 20% of your products. Translated into stock control language, this means that you need to prioritise the stock management of your best-selling products over slower sellers. In the end, these are the products that bring home the bacon. Keep a close eye on inventory flows and make sure your shelves or warehouse always have enough stock of your best performers.
Applying the Pareto principle might seem too drastic a measure for some business owners who may question whether this lopsided approach works at all. However, it’s important to keep current socio-economic conditions in mind. As you must have seen in the news, UK companies have struggled to get stock in time for a while. There are several reasons for this, from the pandemic and Brexit to the global supply chain crisis. Whatever the cause, this is not going to be solved anytime soon. Chances are that your business will be hit too at some point. If that happens, you want to be prepared.
The 80/20 rule will also help you to identify which products are performing better. In time, you’ll have a clearer idea of which products are profitable and which aren’t, improving your chances of generating healthier profits.
Set threshold stock levels
Even the most reliable supplier could let you down on a bad day, so be prepared for anything. One of the best things about having an effective stock control system is that you’ll be able to predict when you will run out of stock. To avoid unpleasant surprises, always restock before products run out. Delivery times will vary depending on the weather and other factors out of your control such as traffic or industrial action.
A stock-out threshold will make the restocking process a lot smoother. It’s as simple as this:
- First, research your sales figures and identify your best sellers.
- Then, set a minimum amount of inventory of a certain item that you need on hand.
- If your actual inventory figures are lower than your threshold stock levels, then it’s time to restock.
Use inventory management software
This is probably the most important advice we can offer. Even if you are managing a small company, you still have a wide range of inventory management programs available. With different features ranging from mobile integration to usage and trend reports, the services provided by these apps can vary greatly.
Plainly speaking, stock control software makes everything less of a headache. Nowadays, this kind of software comes completely packed with handy features such as automated purchasing processes or the automatic calculation of optimum stock levels. The right software can save you incalculable amounts of time and head-splitting admin work. Even more importantly, they are often all-in-one solutions. An effective stock control tool will centralise and oversee every process involved in reviewing inventory. This means that your stock control will be in safe hands – with no room for manual error.
No company is too small for inventory management software. If you want to reduce the chances of getting your numbers wrong and help your business to grow, invest in it.
Take control of your stock
The importance of stock control should be clear by this point. Now it’s time to cut the talk and walk the walk. If you want to implement a user-friendly and effective inventory management solution in your company, try OGL's stock control system. Our comprehensive inventory management system will streamline your stock operations and improve your company’s chances of success.
If we have left any questions unanswered, our free guide to stock management will hopefully make things clearer. You can also watch a demo of our Stock Control Software and decide whether it’s the right option for your business...