The Ultimate Guide to Inventory Control
This guide will not only help you gain a clearer understanding of inventory control, but it will also help you streamline your inventory and handle your stock a lot more effectively.
The Ultimate Guide to Inventory Control
This guide will not only help you gain a clearer understanding of inventory control, but it will also help you streamline your inventory and handle your stock a lot more effectively.
Inventory control is the key to more streamlined back-end operations. However, not a lot of businesses are clear on what inventory control is, and often mistake it for inventory management. In fact, inventory control and inventory management, although somewhat similar, are not the same thing and you need to implement both of them if you actually want to bring high-level efficiency and productivity to your inventory mechanisms.
To put it simply: you just cannot leave inventory control behind or else, you will have to incur a lot of detriment. But before you start strengthening your position in terms of inventory control, you need to understand everything there is to know about it.
That’s where this guide comes in!
In this guide, you will learn more about inventory control: what it is, how it is different from inventory management, and how an inventory control system can help you implement outclass inventory control tactics in just a few clicks.
Excited to learn all about this and more? Then keep scrolling down!
Contents:
- All About Inventory Control
- Streamlining Inventory Control
- Inventory Control Software
- Best Choice of Inventory Control Management System
All About Inventory Control
In this section, let’s take a look at all the basics you and your team should know about inventory control, such as: what is inventory control, how is inventory control different from inventory management, types of inventory control methods, and types of inventory control systems that you should be aware of.
What is Inventory Control?
First things first: what is inventory control if its not just another name for inventory management. Perhaps the best way to describe it is to refer to it as a strategy that consists of procedures and systems for managing inventory items in particular. It is directly associated with monitoring the movement of your stock, as well as ensuring that there is a sufficient supply to work with at all given times.
It is definitely a component of inventory management in general, but you must remember that inventory control is a specific process and in order to ensure that your warehouse operations are correctly handling your inventory and stock, you need to zoom in on inventory control in a full-fledged manner.
ABC Analysis
First up, we have the ABC analysis. This method of inventory control is used to categorise items based on their sales volume, price, and importance. Essentially, the company will decide the quantity of items a company will bring to the market.
So, the products that are expensive will be classified as A class products. These will be managed with tight controls and are usually a part of small inventories.
The products that are average-priced will be classified as B class products. These products usually have moderate sales volumes and stocks, and hence are given medium priority in terms of inventory control.
The products that are low value and low-priced will be classified as C class products. These have high sales and huge inventories, and hence contribute to the business in that flow.
The biggest benefit of the ABC analysis as an inventory control method is that businesses know exactly which products to focus on. This will allow them to cut back on costs of carrying products as they will only be carrying them in accordance with their sales activity, and this will eventually lead to increased profits as well.
Last In, First Out (LIFO) and First In, First Out (FIFO)
This is another very important inventory control method. As the names suggest, both these methods are concerned with the movement of the products. So, LIFO means that your warehouse will put out the most recent batch of items to the customers first whereas FIFO means that the older stock items are pushed out first and hence given priority.
Each method has a separate benefit. LIFO focuses on delivering fresh items to the customer, whereas FIFO makes sure that none of the items already present are left behind and are unnecessarily taking up space.
Batch Tracking
This is perhaps one of the most straightforward ways of implementing inventory control. All you have to do is track where your items come from, where they are heading, and when they will expire. By gaining visibility into these processes, you can organise your products a lot better and make sure they align with the overall plan of your warehouse.
Start by grouping together products and materials with the same manufacturing date together, and they make sure you track all of them while they are in the warehouse. Needless to say, this is one of the easiest ways of implementing inventory control and hence, a lot of businesses have already implemented this in their strategies.
Safety Stock
Another popular and easy way to implement inventory control is using safety stock. Safety stock refers to the extra set of products you have available in order to avoid the market’s unpredictability to getting to you. The key to making sure that safety stock always works in your favour and never against you (which it can) is to make sure that the extra amount you have on hand is never over the average demand.
With the help of safety stock, you can make sure that your inventory is never too less and that you never miss out on an actual order.
Types of Inventory Control Systems
Before we move on, we need to discuss the role of inventory control systems. There are two main types as discussed below. Again, they come with a distinct set of benefits each, and in order to pick between the two you will have to make sure that it aligns with the needs of your business and can actually help you meet the requirements for your business a lot more confidently.
The little insights we have curated for you will certainly help!
Periodic Inventory Control System
A periodic inventory control system refers to conducting the count of goods in your warehouse on a recurrent basis. So, with a periodic inventory control system, the inventory count is done in specific, pre-defined intervals which will of course be set in accordance with the needs of your business.
The main advantage associated with this particular inventory control system is that it is easier and hence, will be quite simple for businesses to manage. It is a great fit for smaller inventories, and will not require any specialised technology or equipment. Because it is simple, it is also easier for you to train individuals how to use this inventory control system effectively.
However, there are also a few cons. Firstly, if you have to deal with a bigger inventory, this one isn’t for you. Not only that, it is also quite lengthy and will be a time-consuming process for you and your warehouse operators. On the other hand, since this kind of inventory control system is usually implemented manually, it is more vulnerable to human shortcoming and you may have to face delays and other problems based on that.
Yet, if you are a small company that doesn’t have a lot of needs in terms of its inventory, you can easily make this type of inventory control system work.
Perpetual Inventory Control System
On the other hand, we have the perpetual inventory control system. This system specialises in providing an accurate inventory count in real-time, and as such, is a solely automated solution. It is way more modern, and utilises technology – for example, barcode scanning and RFID tracking as prominent features. It is a great way of bringing more efficiency to your processes and making sure that everything you are doing in this area is executed accurately and without any major rumours that will dull the experience.
The advantages of this system include that it completely replaces manual labour! So, instead of relying on your staff to count everything manually, you can now generate counts automatically. That means that this system does not only enable a much more accurate overview, but is also a good way to streamline all other aspects of your business!
However, you need to keep in mind that this system is nowhere as inexpensive as the periodic inventory control system and just leveraging it properly could cost you a decent amount of money, let alone having to maintain it over a long period of time.
Yet, it is imperative for bigger businesses to make this investment as a perpetual inventory management system is the only way you can actually keep up with an expansive set of needs – and hence it is time you actually start looking into it if you have experienced an increase in your needs of inventory control.
Streamlining Inventory Control
And now, we have to take a look at some general tips that will help you improve your inventory control strategy, before we zoom in on inventory control software and how it can revolutionise not only the way you implement control of your stock, but also how you manage your warehouse in general.
Categorise your inventory
The first tip we have for you is to categorise your inventory. If you don’t yet want to go all in with something like an ABC technique, it’s okay: you can still generate labels for your stock that will give you a better idea of what they are and how they can be controlled better.
The main idea behind this is to know which items to prioritise, so that you can not only lessen the burden you have to deal with, but also make sure that items that need attention are not neglected unnecessarily.
Work around minimum stock levels
You need to determine what is the absolute minimum you can hit for an item without it affecting your sales, and mould the rest of your inventory control strategy in accordance with that. When you work within this framework, it is easier to prevent shortages and replenish your stock on time.
So, assess your activity: which items sell out faster? Which items take longer to get back from the supplier? Which items are not quick selling? The answers to these questions will really help you gauge how to be more in control of your stock.
Store your items smartly
When it comes to storing your items, you really have to make smart decisions. This is because the state of your storage can really impact your business. For example, if your stock is not organised properly, it will end up taking more space than required. This could result in increased overhead costs, and that will impact your budget.
So, see how lacking in one area of inventory control could lead to bigger consequences? Wrongly stored items could get damaged, hard to get to, and may even be straight up misplaced, so you really have to store them smartly.
Implement FIFO and LIFO techniques
Although you have to choose the inventory control methods for you in accordance with your needs as a business, these two are very beneficial so we recommend you to definitely give at least these two a try! They will help you make sure that only the best products are going out, and that will allow you to implement a better check and balance for your products.
Of course, you will have to choose between the two depending on what it is that you are looking to particularly streamline and gain control of, but in general these two can lead to great advantages.
Optimise your inventory replenishment tactics
Inventory control is highly dependent on inventory replenishment, which is why in order to achieve efficiency in one area you really have to optimise the other. So, your replenishment processes should be on point if you want to be successful in terms of inventory control.
The best way to go about this is to get in touch with your suppliers, and make sure they gauge your needs properly. This way, they can match their pace with your needs and you can rest easy on the fact that whenever you need your inventory replenished, it will be done without any major problems involved.
Perform inventory audits regularly
If you want to succeed with your inventory control, you need to be in touch with your inventory at all times. Whether or not you are in the premises of your inventory, you need to have access to it. And of course, you need to conduct regular audits.
Having this level of visibility into your processes will really allow you to make the right changes to your strategy. For example, it will help you zoom in on problems a lot more quickly which means you can deal with problems a lot more conveniently as well.
Integrate an inventory control software system in your operations
And at last – the answer to all your grievances involving inventory control is inventory control software. We will get more into it in the next section, but we thought it fitting to share this as a tip to.
The kind of efficiency and productivity you achieve with the help of an inventory control software system is unparalleled. It is a modern solution that allows you to stay in touch with the ever-growing demands of the industry you operate in, and needless to say, it will be the go-to way for you to make sure that you are one-step ahead of your competitors at all times.
Start Your Demo Now
Enter your details to book a demo of the Canary7 WMS.
Inventory Control Software
And now, onto all about inventory control software and how it can make a wonderful addition to your business. If you haven’t considered using an inventory control software yet, we are sure that after having read this section, you will definitely know exactly why you need an inventory control software for your business.
What is an Inventory Control Management System?
An inventory control software is an automated system that can help you gain complete control of your inventory. It automates all the processes that would otherwise be done manually, which makes it a lot better and allows you to make inventory control a lot easier on yourself.
Besides, it is the only way you can actually keep up with the needs of the modern world, and not making it a part of your operations will really put you at a place that would make you more vulnerable and less advanced!
Benefits of Inventory Control Software
There are many benefits to having inventory control software; however, we have shortlisted the main ones that will be an incentive for small and big businesses alike to focus on inventory control by effectively making use of a fully robust inventory control software.
1) Efficient
Speed is an important factor when it comes to inventory control, and you can speed up and bring more efficiency to the table with the help of an inventory control management system. Because it automates everything, everything can be executed at the speed of lighting and you really don’t have to deal with unnecessary delays.
2) Accurate
Again, because it is automated and not based on manual work, there are a lot less chances for things to go wrong. You can solidify accuracy and make sure that whatever data you use to inform your inventory control strategy is powered with accurate and helpful insights.
3) Advanced
An inventory control software is an advanced solution, so it can help you stay at par with the standards set by your competitors. It is a great way to strengthen your position in today’s market, and will give you the edge you need to improve your brand image in front of people.
4) Profitable
Inventory control is linked with profitability of your processes. In order to gain maximum profitability, you have to make sure that your processes are executed perfectly, which in today’s day and age can only be done with the help of an advanced inventory control management software.
5) Simple
There is a lot of existing variety when it comes to actual inventory control software choices! With a little research, you can find an inventory control software system that is easy to use, and offers a simple approach to achieving highly-advanced results – which is the best way to improve your operations.
Main Features of Inventory Control Software
The main features of your inventory control software will be as follows:
Inventory tracking
A robust inventory control software will allow you advanced ways of tracking your inventory, such as barcode scanning and RFID tags. This will help you gain better visibility into your stock activity and make smarter decisions in this area.
Real-time stock updates
In order to achieve full visibility into your stock, you need to update at all times. A good inventory control management system will send you notifications and keep you updated on your inventory activity at all times, which can prompt proportionate action from your end whenever necessary for smooth operations.
Inventory levels regulation
In order to make sure that your warehouse inventory control is in line with the needs of your business and consumer demand, you have to make sure that you are maintaining certain inventory levels. This too can be easily done with the help of inventory control management system.
Resource and labour management
Inventory control is not all about focusing on inventory and stock. It also revolves around resource and labour management, as these two elements will help you streamline your inventory a lot more effectively and efficiently. You can do so by making use of a robust inventory control management software system.
Supplier support
You need to establish a straight line of communication with your suppliers, which will help you evolve your inventory control strategy and take it to the next level. An inventory control software will help you create this communication framework, and make sure that you are all on the same page throughout.
Best Choice of Inventory Control Management System
An inventory control management system will help you a lot; but you have to make sure you have the best one onboard.
Luckily, that is not a hard choice to make. Find hundreds of reasons to get Canary7 today, and make it a part of your inventory control and management strategies!