Understanding the Basics of Inventory Control & Inventory Management in Business

No business, no matter what it is or what it does, can survive for too long without learning the Inventory Control basics. A lot of factors are involved in business Inventory Control and management. And up to this point, you may already know that different businesses also deal in different inventory. However, you may have noticed that their Inventory Control and management isn’t all that different. The basics are all pretty much the same.

To stay competitive in today’s business environment, you must pay a lot more attention to your business inventory. Know exactly what and how much inventory you have in your stores at all times. Plus, it’s not all just about carrying excess inventory. In fact, you find that carrying excess inventory comes with high costs. This is also a very critical process to note in the competitive business environment we are in today.

Inventory management is the process of stocking the right inventory levels. It also involves paying the right price for your inventory and understanding the specific ‘reorder’ points as well. However, what matters more is that you maintain the tight inventory in your storage at the right place and time.

Inventory Control, on the other hand, is the process of keeping track of all your existing stock. This process helps you identify which products are in your storage. Plus, you also know how much of given products are in your storage at any given time.

This basic information about Inventory Control and inventory management might interest you

Save money, improve bottom lines

If left up to chance, then both Inventory Control and inventory management can either hurt your organization’s profits or save you tons of money. At the same time, also improve your profits and bottom lines. However, this entirely depends on how you manage and control your business’ inventory.

Inventory management requires a lot of detailed record keeping for all your business’s stocked products. Here is where Inventory Control then comes in and work to reduce your overall inventory costs. If used well, then inventory control, also stock control, can help to ensure that all your customers’ demands are met in a timely fashion.

Most of the time, you find that the two terms are used interchangeably. However, Inventory Control is more tightly focused on the increase in profits while keeping your inventory levels low without impacting your customer service.

The right products and the right place

For your company to stand any chance in the big leagues, you must know exactly how to run leaner operations in its inventory department. You don’t want excess inventory or other wasteful processes to be what is pulling your business back. This is the primary reason why more businesses have opted to examine their inventory turnover. Besides this, organizations also work to develop good inventory management strategies to ensure that their customers’ demands are met. And you have to do all this while reducing the total amount of working capital that is tied in inventory.

To do this successfully, you might want to consider these two scenarios:

You may choose to overstock your inventory while anticipating that the future demand of that inventory might rise. Only to end up with a lot of ‘dead stock’ in your warehouse. This dead stock can do a lot more damage to your business too. Besides from using up a lot of physical space in your storage just sitting still, it can also consume your working capital. Plus, some of your stock may also be on the verge of obsolescence which can end up rendering them unreturnable. This essentially makes them useless and a complete waste of time, money, and space.

You may also choose to keep your stock levels too low for reasons best known to you. However, choosing to do this can also come with its own sets of risks. For one, you stand the risk of running out especially when your customers ask for your goods. Whatever happens, you will now have a legion of unhappy, unsatisfied customers to contend with.

Whichever way you put it, overstocking or understocking your inventory for whatever reason is a great risk. One that you should only even consider after weighing all your options. Today, there are many advanced inventory management and Inventory Control software that you can use in your warehouses. You can now sit back and let your computers and machines do all the work for you. You only need to countercheck where necessary.

Working through inventory challenges

It’s not easy being able to achieve optimal inventory levels in any business. It is one very delicate task that if you can manage to achieve and maintain, then your business can grow exponentially. However, this is almost never the case with most businesses no matter how hard they try.

Buy too little stock, and you risk winding up your stock and have unhappy, unsatisfied customers on your back. Procure too much, and you also stand the chance of ending up with obsolete inventory. You will have burnt your working capital, used up a lot of space, and ended up with a lot of dead stock in your warehouse. However, with proper Inventory Control and inventory management, you can now overcome challenges like:

• Regular stock-outs
• High inventory costs
• Higher risk of loss
• Lost customers
• Excessive storage costs
• Low inventory turnover rates
• Imbalanced shipment lead times
• Unnecessary order duplications

Your business will definitely be in better hands if you apply the appropriate Inventory Control and inventory management practices.

From manual to automated inventory control and management processes

Businesses that haven’t adopted the automated inventory processes are forced to apply and use the manual, antiquated systems instead. However, you find that these manual inventory processes don’t provide that much accurate inventory data. The automated inventory processes are more robust, reliable, and minimize errors.

By incorporating automated inventory processes, you will realize that your business inventory will perform much better. You will have done away with all the human errors for one. In return, your business will not be able to maximize its profits while also minimizing its inventory investments.

Final thoughts

Inventory Control and management help to ensure that your customers get precisely what they want. Customers that get their shipments on time is what every business, both the old and new, are gunning for. And that’s precisely what you should aim for as well.