What Is a Stock Control System?
A stock control system incorporates every function that’s linked with the management of stock or inventory items. Also known as an inventory control system, a good software solution will take care of everything from product turnover, receiving and re-ordering products, purchasing, shipping and receiving, to product tracking and storage inputs.
Why Does My Business Need Inventory Management Software?
Are you still using a spreadsheet to manage inventory items or worse, not managing it at all? Inventory is one of the most vital sources of revenue, no matter the size of your business. It can have a dramatic effect on your profit margin so you’ll want to keep product levels as accurate as possible to avoid damaging your business.
Whether you are a small business or a large corporation with multiple warehouses, inventory management enables you to control and track products and supplies and helps manage and optimize your inventory and sales.
Controlling Your Stock Is Vital to Business Growth
The purpose of stock control is to keep products to a minimum in order to minimize the holding costs while ensuring sufficient stock to meet customer demands. This might sound like a simple task but with the fluctuations in demand, it can become unpredictable and complicated. If you don’t manage your stock properly, you won’t be able to satisfy customer demand and make customers wait longer for their orders. Ultimately customers would find you unreliable and stop doing business with you completely.
Different Methods of Controlling Your Stock
One of the best ways to blow your competition out of the water is by running a smooth and seamless operation and managing your stock levels efficiently. The faster orders get out the door and the fewer mistakes that are made, the less money is wasted. This is the best way to create loyal, returning customers and more sales.
Effective inventory control methods that help organise stock optimally and keep it perfectly balanced in the warehouse are vital for creating a flawless operation and includes the following:
Safety Stock
Safety stock, also known as backup stock helps you prepare for the unexpected. It should be used purely for sudden increases in demand and never for normal daily sales.
Determine Order Quantity
EOQ (Economic order quantity) helps to calculate how much stock to order to keep holding costs low, without running out or overstocking.
Determine Reorder Points
This is the point at which new stock needs to be ordered. If you order too late, you might risk running out, or too early will increase the likelihood of overstocking.
ABC Analysis
The ABC analysis helps to determine which products need to be prioritised over others and can be divided into three groups:
A – high value with low sales
B – moderate value with moderate sales
C – low value with high sales
FIFO (First-in-First-Out)
The last thing you want as a retailer is to use the newest stock for orders, especially when it comes to perishable items. Leaving older stock sitting dormant in the warehouse increases the risk of decay or damage. This can easily be managed by implementing a rule to take inventory from the front while storing new inventory from the back.
Stock Takes and Reviews
No one likes them but stock takes are essential for keeping errors to a minimum.
Characteristics of a Good Inventory Software Solution
Warehouse management is a task that requires diligent attention and oversight to keep track of the evolving status of your inventory. Using an inventory management system with capabilities specific to your industry will give you more control and enable you to manage every aspect of your inventory better. Below are some features that are important in great inventory software.
Practical and Easy to Use
If your inventory software requires weeks of training, come with a hefty user manual and are difficult to comprehend, you might need to invest in a different software solution. An inventory application should be straight-forward to use and easy to understand with minimal explanation and training needed.
Inventory Tracking
Tracking your inventory levels enable you to see what sales orders you’re filling, what you’re receiving and when it’s time to order more. It is important to make sure your inventory management system can track inventory across multiple locations and in the way it needs to. Some features you can use for tracking include barcodes, RFID tags, kitting, serial numbers and more.
Security and Backups
How secure is your inventory software? Regardless if it’s on a local server or in the cloud, proper security measures need to be put in place to protect your data from hacking or theft. Losing data can be extremely costly for your business and harm your workflow. If you want to keep your data private and safe, invest in a secure inventory management software solution that can also provide you with daily back-ups. This will help you get back on track should you lose any data.
Scalability
Scalability is important whether you are a small business or across multiple locations throughout the country. You need an inventory management system that can adapt and grow with your business needs without requiring major upgrades.
Real-Time Updating Capabilities
Any time changes are made to your inventory, you need to be updated right away. Whether these changes are made as a result of order fulfillment, losses due to damage in transit or incoming stock orders, you want your inventory management system to be able to update data in realtime and across your network.
Reporting Features
Your inventory software should offer you a diverse set of reporting features that cover all the aspects of your stock management processes. This could include report generation for previous orders (customers and company), shipment data and price changes as well as individual and bulk information and point-of-sale systems.
Single Interface
Regardless of the functions and options included in an inventory management system, it should provide access to all of it in a single interface without the requirement of multiple applications or programs to complete your tasks.
Customization
A great inventory management system should be easy to customize to suit your unique needs. This would reduce the risk of having software that lacks the necessary features or has functionalities you don’t use and can’t get rid of.
Financial Management
Good stock control software needs to have financial management features that enable you to change pricing structures as well as inventory costs. The ability to set up multiple accounts for managing and manipulating financial aspects can also come in handy.
Auditing Features
An important aspect of your business’s logistics management is conducting internal audits. An inventory management system with built-in audit functionalities would be able to show you weak points in your system before they become critical.
How to Develop the Best Inventory Management Software for My Business
Are you looking for an Inventory management system that’s perfect for your business? Do you want the ability to maintain better control over your supply chain? Netgen can assist. Over the years, we’ve developed a wide range of software solutions to make businesses run smoother and more efficiently. We can design a custom inventory management software solution with all the functionalities required for your unique needs. For more information, speak to the team today.
