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Definitive Guide to Stock Control and Inventory Management

Posted: September 19, 2019 by Ly Phan

Definitive Guide to Stock Control and Inventory Management

For warehouses stock control and inventory management go hand-in-hand, but there are subtle differences between the two terms. Firstly, stock control refers strictly to how a business manages the supply of products to ensure they avoid stock-outs. This involves striking a balance between having enough stock to deal with any unexpected events and expenditure. 

Inventory management is a broader term that describes the process of managing items through the supply chain. In terms of warehouses, this would cover the receiving of inventory, the put away, and the eventual shipping of items to its customers.

Ultimately, stock control is one component of inventory management systems, which is critical for the efficiency of supply chains around the world.

 

Stock Control for Retail Industry

Stock control is a must in retail industry

Shoppers in today’s digital age make purchases through multiple channels such as eCommerce and physical stores. The challenge for distribution and fulfillment centers is to serve the different methods people use to shop and to track inventory efficiently.

  1. Ecommerce: Shoppers buy products online and delivered straight to their homes. Additionally, customers may request items to be sent to a store, and then they can pick up.
  2. Brick and Mortar: Though eCommerce is rising fast, the vast majority of retail purchases are still made in physical stores. 
  3. Dropshipping: This is a popular business model where a business uses a distribution center to store its stock. The third-party fulfillment center then processes the orders as they come in and handle the shipping.

For warehouses, the different methods involved means it is critical to be organized and control the levels and movement of stock. Businesses that deliver accurate and efficient service for its clients stand to take full advantage of the opportunity the online retail revolution presents.

 

The priority for distribution centers is to have the right level of stock and eliminate the risk of stockouts. There are a number of factors to consider here:

  1. Warehouse Layout: One indicator of an efficient stock control strategy is being able to locate and find items quickly. Designing the layout is a vital part of this, categorizing areas of the floor with dedicated teams. For instance, if you sell a wide range of items, then you should split the areas into categories - such as electronics, apparel, and cosmetics.
  2. Picking Strategy: It can be tempting to fulfill each order as they come in, known as “piece picking.” However, as a business grows, this approach can become increasingly ineffective. Warehouses should consider “wave picking,” which involves assigning teams to designated areas and only picking items within their zones. Those items can then be placed onto a conveyor belt system to be packed at a later stage.
  3. Sale Forecasting: In the retail world, it’s essential to be able to forecast sales ahead of time. Factor in variations in demand for seasonal products like coats, sunscreen, or swimwear. National holidays and religious festivals can also have an impact. Geographic locations can also determine which products are popular - surfboards, for example, will sell more frequently in California than in Indiana.
  4. Automate Stock Control: The most effective way to streamline stock control is to use an automated system, such as inventory management software. You can utilize a cloud-based solution to set thresholds on stock levels, which triggers an alert for workers to order more. The real-time visibility and inventory tracking will prove invaluable to any business in the supply chain.

The four factors underline the importance of efficient stock control in an ever-competitive retail industry. Whether it’s a brick and mortar or eCommerce store, customers demand top service, speedy delivery, and the availability of products. 

 

Role of Inventory Management Software

WMS is important for warehouse operation

Using inventory management software is one route to a simple stock control system. The core advantage of using a cloud-based solution is the utilization of real-time visibility with automation, which can lead to slick and efficient operations. 

 

Real-Time Visibility

Reputable providers of inventory management software will ensure real-time visibility in terms of stock control, tracking, and analytics. This can extend beyond the internal teams, to trading partners and end-customers in the supply chain. 

For warehouse workers, easy and remote access to an inventory management platform can significantly increase productivity. For instance, equipped with remote devices such as tablets or barcode scanners, teams will be able to carry out tasks like picking and packing quickly, check stock levels, and order where necessary. Instead of using time-consuming paper-based systems, workers will be able to carry these tasks in seconds.

Additionally, warehouses that use SmartTurn’s cloud-based solution have reported improving inventory accuracy from 91% to 99%. This was achieved by the software giving the company the ability to automatically track, update, and sync data across the warehouse, leading to real-time visibility. By using this enhanced visibility to reduce the risk of errors, businesses will be able to deliver a better service for its customers. For example, food wholesaler Frozen Gourmet was able to use SmartTurn’s platform to increase shipping accuracy.  

In another example of visibility being used to improve customer service, SBC Fulfilment used SmartTurn’s capabilities to offer its clients secured access to information. Striking a balance between access and security, the company was able to provide an extra level of assurance and enable partners to see stock availability in real-time.

 

Automated Data Integration

Using stock control software will lead to greater automation of processes within a warehouse. By customizing the software to fit your business needs, you can integrate stock control with other systems such as accounting and invoicing.

The integration of systems means workers would only need to enter the data once, as it would automatically be updated across multiple platforms. As mentioned earlier in the post, users would even be able to automate stock level monitoring.

Warehouses can also use the power of SmartTurn’s inventory management software to take advantage of trade discounts and source the cheapest suppliers, with one company managing to save $40,000 a month. Automating these processes not only saves time but can also significantly increase the revenue of your business.

 

Use Software to Streamline Stock Control

The days of walking around the floor with a pen and checklist, going through each stock one-by-one are in the past. The modern warehouse should have a series of processes in place, supported by robust inventory management software. 

While there are several options on the market, cloud-based inventory management software could be the ideal solution for your business. Not only it provides a strong platform for warehouse teams to operate from, but it’s also a flexible, low-maintenance alternative to on-premise solutions. Any updates can be added automatically and issues are handled by your provider, saving you time and resources in the process. 

However, a cloud-based solution works best with the right strategy behind it. Using the right picking method and designing the warehouse layout are two such factors. Additionally, there needs to be a focus on being proactive with data, giving you the ability to forecast sales and manage stock accordingly. 

By bringing together the different elements of warehouse operations, inventory management software can then be utilized to automate and streamline the processes for stock control.

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