Keeping abreast of inventory levels is a never-ending task. Customer demand will fluctuate, supplier prices will increase, and warehouse teams must be able to prepare for these changes.
Also known as inventory control, inventory control aims to ensure that a business has ideal stock levels at all times without spending too much on products up front. Although the terms inventory control and inventory management are often used interchangeably, they deal with different aspects of inventory.
Inventory management in relation to the control of inventory
POS system with inventory management is a broader term that covers how a business orders, stores, and benefits from raw materials and stored products. This high-level process follows the entire lifecycle of a product, from procurement to order fulfillment. Inventory management also includes strategic positioning of warehouse locations, order quantity, inventory forecasting, etc. Inventory management software automates item tracking, generates reports and identifies discrepancies in inventory levels.
On the other hand, inventory control focuses on processing items at the operation level and involves handling inventory once it arrives at a storage facility. It involves the management of warehouses with the aim of maximizing profits with a minimum investment in stock to avoid write-offs while maintaining customer satisfaction. Fortunately, modern technology has made it easier than ever to measure these measurements.
Why inventory control is important
When a business is able to optimize inventory based on real-time data, it can reduce inventory costs, improve warehouse management, and deliver items in a timely manner to meet customer needs.
Here are some ways to optimize inventory levels to help businesses-
Provides accurate inventory counts
Whether it is a manual operation using a spreadsheet or software that digitally analyzes the barcodes of each unit, inventory control gives an accurate picture of all units. of a warehouse.
Help businesses make inventory management decisions
Since sales tend to fluctuate throughout the year, businesses must regularly measure changes in inventory over time in order to meet demand. Inventory control measures the turnover rates or the frequency of sale and replacement of a product during a given period. This helps managers identify those items that are in greatest demand or that move slowly, preventing unnecessary excess inventory orders and speeding up warehouse management processes.
Prevents radiation and dead stocks
Inventory control provides the data necessary for inventory accounting, which deals with the value of gross goods and goods sold. By making it easier to calculate the value of existing inventory, this eliminates write-offs and dead inventory.
Tracking inventory levels also helps businesses strike a balance between keeping the minimum level of inventory that always meets customer demand. This limits the waste resulting from excessive storage, while avoiding the risk of out of stock.
How businesses can get started with inventory control
Optimizing inventory storage can seem like a daunting task at first. However, there are a few simple steps businesses can take to make the process easier. Here are some best practices to help businesses set up a transparent inventory control system.
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