In order for a business to run smoothly, stock control is essential – but what exactly does this mean, and why is it so important? In this article, we take a closer look at how your business could benefit from better stock control and what you need to do to gain a tighter grip on the products you sell.
What does stock control mean?
In a nutshell, stock control means having clear visibility of all the products you sell within your business so that you have enough stock for your customers to buy. It also means having full knowledge of every product type in your warehouse, the value of your stock and how much of each product you need at any given time.
Sometimes referred to as inventory control, stock control is the process of maintaining a suitable quantity of stock to ensure that your business meets customer demand without delay, as well as keeping the costs of holding stock to a minimum.
How does stock control work?
There are many different stock control methods. The right one for your business will depend on a number of factors, such as the size of your business and how many products you sell, so it’s worth doing your research to figure out which one will work best for you.
Generally speaking, your stock control system should encompass everything, from purchasing, product turnover and tracking, to shipping, receiving products and re-ordering them. Stock control is all about management and maintenance so that you can see what products your customers are buying and where and when you need to replenish your stock.
Why is stock control important?
As a business owner, stock control should be a priority, and there are a number of reasons why it’s so important. First and foremost, keeping tabs on your stock levels will ensure that you don’t run out of the products that your customers want to buy. If a customer is unable to purchase a certain product, you could run the risk of damaging the reputation of your business and in turn, losing the sale to another company who has the same or similar product available.
Stock control can also significantly improve the efficiency of your business, especially behind the scenes, and you should also find that productivity among your staff improves too, freeing them up to take on other tasks. Keeping on top of your inventory in this way can also help keep your warehouse more organised, making it easier to locate specific items.
How to do stock control
How you carry out the process of stock control will most likely depend on the size of your business. For example, a small business may find that sticking to a basic system of manually keeping track of its stock levels in a stock book or using spreadsheets works best. However, as a business grows, this simplistic style of stock control system may end up becoming inefficient.
Instead, an automated stock control management system which is capable of offering real-time support and can keep track of inventory as it moves may be a better option, especially if you’re running a large business that sells a vast number of products.
When you’re looking for a suitable stock control system, you may even want to consider using a warehouse space where you can also benefit from using in-house stock control solutions. At Freightline Carriers, we offer stock control services whereby we can help ensure an efficient flow of your products or materials, controlling the transfer of items to make sure that your stock levels don’t get too low. Opting for a service like this will mean that your business will operate smoothly and prevent potential fulfillment problems.
What is lead time in stock control?
In terms of stock control management, ‘lead time’ refers to the lapse in time between when an order is placed, to replenishing that inventory, to when it is received. An easy way of working out the lead time is by calculating the supply delay plus the reordering delay.
To work out lead time, you will need to take into account the time it takes for a purchase order to be delivered by your supplier, factoring in the time it takes the supplier to first accept then process your order too.
For example, if you run out of a particular product, you will need to reorder it from your supplier. However, if your supplier only takes reorders once a week, and you place your order three days before it will be received by the supplier, this is known as the reordering delay. You will then need to take into consideration the amount of time it will take for the order to be processed and delivered to you, also known as the supply delay. If this takes a further three days, the total lead time will be six days.
The truth is, lead time can impact your stock levels, and the longer your lead time is, the more stock you will need. Once you have worked out your lead time, you should put measures into place to reduce this.
What is the golden rule of stock control?
In short, stock control can be the difference between making a profit or a loss. If you get it just right, it can help make your business run smoother, keep costs down and, most importantly, increase your profitability and growth.