Inventory is the backbone of retail and manufacturing companies, and managing it as it moves through the supply chain is a crucial task for businesses. From ordering to storing to using inventory in manufacturing processes or shipping it out to customers, there has to be oversight to ensure there’s always enough stock to meet demand.
Managers and company owners have to balance this demand with the cost of both the product and storing it. That’s what inventory control is all about. We’re going to look at the ways good inventory control makes businesses more efficient and put forward ideas to make the system better.
Why inventory control is important
More chance of items staying in peak condition
Any stock that’s damaged in storage is a financial loss for your company. Inventory control can reduce or eliminate damaged goods by tracking items closely as they move through the supply chain. When carried out thoroughly and accurately, stock gets rotated through the system faster. This means items spend less time in storage where they could sustain damage, resulting in a higher probability of goods being top quality.
Maintains the right levels
While there always has to be enough in stock to satisfy demand, having too much of any item is not good for the bottom line. Good inventory control finds those correct levels, ensuring they’re maintained while adding a bit more for emergencies – safety stock.
When the inventory control is on point, all the information needed for an audit is at your fingertips. This saves a company time and money.
Inventory control doesn’t just mean keeping a close eye on stock as it moves through the supply chain and its levels in storage, it also provides data about which items are selling and which are not. This informs buying decisions, ensuring you’re not left holding unwanted stock. Unwanted stock is a drain on resources, both space in the warehouse and finances.
Ways to improve inventory control
Create a good floor plan.
A good floor plan in a warehouse makes everything easily accessible and facilitates movement around it, giving a boost to productivity. To achieve this, items that move faster should be upfront, heavy items should be in low shelving, and walkways should be easy to navigate. Signage that’s large and clear needs to be posted everywhere too. It’s how warehouse workers find their way around.
Strengthen relationships with suppliers.
Good relationships come down to communication, and that starts with getting to know the contact person at each of your suppliers. When you have a dialogue, you build trust, something that, in turn, puts you in a position to negotiate better rates, return anything unsold, and turn your purchase orders around faster.
Use a warehouse management system.
An inventory control system keeps tabs on items as they move through your entire supply chain, and a warehouse management system maintains complete oversight over the storage facility. Adding a warehouse management system increases efficiency and reduces errors and confusion.
Conduct regular audits.
It’s important to know that your financial records accurately reflect the stock you actually have. That’s why you have to conduct these audits regularly. Fortunately, your inventory control system makes this relatively easy and painless.
For your supply chain to work as efficiently as possible, every item has to be clearly and correctly labeled. Nowadays that means using barcodes, QR codes, and scanners. These digitized systems also help with real-time inventory control.
Inventory control systems collect and store a lot of data, and the data can be incorporated into reports about your inventory. These reports can contain information that stretches from stock levels to items that are out of stock to items that have become obsolete to financial statements. Configure this information in whatever way you want, but do produce the reports regularly. It will help you keep oversight on your business.
Basically a quicker and more efficient method for stock taking, a cycle count only involves a small section of the warehouse at a time. It’s usually practiced as a continual process, systematically working from one end of the facility to another, then starting at the beginning again when the process reaches the end. Cycle counting means you don’t have to shut operations down for a few days, as with traditional stock audits that count everything at the same time. In addition to keeping the supply chain in running order, counting a section at a time like this is actually more accurate.
Having good control over inventory is essential for a business to thrive.Cin7 Omni can be a great help. With an array of tools to track inventory and maintain good levels, you’ll have the control you need to have. Our experts are standing by to tell you more and give you a demo. Click here to schedule a time that’s right for you.