Managing stock can be a challenging task. Not only do you need to always have the right amount of stock, but you’ll also have to track quantities, stay up to date on trends and patterns, and know which products are flying off the shelves and which aren’t.
To help you out, we’ll look at stock control in more detail. Below, you’ll find key insights on why it’s so important, how poor stock management can challenge your operations, and the benefits that are in store for businesses that optimise their own stock control.
Let’s get started…
Why Do Business Need Stock Control?
Effective stock management matters for businesses of all kinds. Without it, you can end up doing some serious damage to your business that affects both your finances and your reputation in big ways.
As essential as it is, however, an alarming number of SMEs struggle with stock control. In fact, 43% of them don’t track their inventory at all. Elsewhere, one-third of businesses will miss a shipment deadline after selling an item that was never actually in stock.
And with the rise and rise of eCommerce, businesses must now factor in a further threat, namely: the eCommerce and marketplace customer.
The online shopper wants convenience, and they want it now. Product choice and immediate availability matter most to them. And businesses like yours need to be ready to deal with their demands.
What are the Challenges of Stock Control?
When it comes to stock control challenges, businesses aren’t exactly in short shrift. To make sure your stock control is executed as efficiently as possible, you’ll have to deal with the following…
Stock that’s past its best
Not having enough stock in your warehouse to meet demand is always a problem, but what happens if you have too much stock? Particularly where perishables are concerned, if your supplies reach the end of their lifecycle, then you won’t be able to sell them.
And that means wasting money on parts, supplies and stock that was never used – and a heap of wasted time spent reordering replacements.
Your supplier has run out of stock
Should your supplier run dry, you’ll have to search high and low to find a suitable alternative, which can put a huge amount of stress on making sure your schedule remains viable.
Here’s where due diligence comes into focus. By vetting suppliers in advance and forging relationships, you’ll have a series of alternative suppliers you can rely on should your main supplier lack the parts you need.
You can’t locate certain stock
As we’ve hinted at, a well-stocked warehouse isn’t always ideal, especially if it’s teeming with that much product your team is struggling to locate certain items. A messy, disorganised warehouse has no chance of improving productivity and meeting demands. It’s a great way of making sure you fall behind on orders, however.
Inadequate stock management systems
A pen-and-paper system really doesn’t cut it nowadays. If you’re relying on warehouse staff to keep back-office staff abreast of what’s going on, then you’re sure to run into delays with invoicing, poor cash flow, and a host of other issues.
This is where a stock control system can prove essential. Rather than manual, error-prone methods, you can now rely on a seamless, automated approach that integrates with your day-to-day workflows so that everyone stays up to date with what’s going on.
Not knowing how much stock to have on hand
Since under- and overstocking can both cause problems, how exactly do you know much stock to have on hand?
You might look towards past sales data to see how much stock you had during peak seasons and use that as a benchmark, for instance. But what if you don’t have this kind of data to analyse? Hazarding a guess may only lead to you under- and overstocking once more.
This is why the best businesses opt for automated stock control systems to take out the guesswork. Such systems allow them to collect and analyse data, which they can then use to make better business decisions when it comes to stock levels.
Why Does Successful Stock Control Look Like?
Stock control doesn’t just fall into place at the press of a button. It’d be great if it did, but there’s more to it than that. Likewise, an inventory management system or ERP solution designed for distribution isn’t an instant cure-all either – especially if you don’t know what your stock control policy looks like.
So, what do you need to ensure successful stock control? You’ll definitely need to put the time into establishing an effective stock management policy across your business. By drawing up a policy, you can then start to decide the kinds of processes, procedures, and rules you can enforce through your business system.
With an experienced ERP or stock management software consultant by your side, they’ll be on hand to guide you through the best stock control policies to employ to ensure your system always delivers real, appreciable benefits.
And while there’s no quick fix, we’ve worked out there’s a certain number that can certainly help with benchmarking your progress. A survey conducted by Zebra Technologies Corporation in 2017 found that out of 2,700 companies and merchants, 74% classed their current inventory management as accurate. However, the survey found that this number needed to be pushed up to 83% if companies are to cope with the impact of omnichannel selling.
With human error accounting for a large chunk of warehouse issues, an automated stock management solution could well be what gets businesses over this 83% accuracy mark. Such solutions can eliminate manual processes, erase human errors, facilitate accurate forecasts and permanently increase the accuracy of inventory management. With a clearer view of the intricate nature of your stock portfolio, your business can begin to reap the rewards of more cost-efficient, reliable processes, streamlined deliveries, and ultimately, happier customers.
What are the Benefits of a Stock Control or Warehouse Management Solution?
So far, we’ve only cast a cursory glance at what’s in store for businesses using a proper stock control system. Let’s take a more in-depth, up-close look at the benefits…
Greater demand forecasting
Guesswork and gut instincts will only get you so far. We prefer to ground decisions in hard facts and figures.
With the right solution, accurate insights based on current and historic stock levels remain close to hand at all times. Such figures not only allow you to know what your customers need and when they need it, but the right analysis can shine a light on patterns and market trends.
Stock control software can also remove any anomalies to smooth out averages to provide for better predictive modelling when it comes to your stock forecasts. It can also highlight optimum maximum and minimum stock levels for each stock item.
Automation of labour-intensive tasks
Your team are under enough pressure as it is. Repetitive tasks like data entry can put pressure on both their time and resources – especially if they’ve got a lot of stock to deal with.
By combining a stock control system with handheld devices, your team can scan stock and automatically enter data into your inventory management system. No more manual data entry and stock counts, just more efficient processes – with minimal training required.
Enhanced visibility
If your business is to meet demand, then real-time insights are vital. By viewing the status of orders and inventory as they progress, you can more readily meet lead times, ensure timely deliveries, and keep the warehouse running as efficiently as possible. You can also ensure all of this real-time data makes its way to both your online and offline customers in the format of order updates via your web store, email and/or SMS.
All of which adds up to lower cost, greater decision making and happier customers.
Elimination of human error
Human error is part of what makes us human. But as inevitable as it may be, it’s also avoidable. And since you can lose vast sums of money through such mistakes, doing what you can to shore up your losses is vital.
The right stock control solution can monitor tasks and stock movements without the need for your team to complete paperwork or input data. As well as taking some of the pressure off your team, it also means more accurate inventory management.
Lower costs
Remember what we said earlier about stock taking up room in your warehouse? Once you have a clearer view of your inventory, you’ll no longer have to deal with this surplus of stock. By keeping overheads down, you’ll now have the freedom to look at new business opportunities.
That might mean reducing staffing costs through automation or putting their talents to better use elsewhere. Whatever it is, the up-to-date insights of an effective stock control system let you know when and how to scale your workforce appropriately.
Read our stock management guide for more helpful tips on handling your inventory. Or perhaps you’re wondering what a Warehouse Management Solution is? Check out our guide to find out.
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