What Is Inventory Control?

A Definition of Inventory Control
Inventory control, also referred to as stock control, is so broad and incorporates so many functions that it is difficult to describe in a limited definition, but we like how this Inc.com entry puts it: Inventory control refers to “all aspects of managing a company’s inventories: purchasing, shipping, receiving, tracking, warehousing and storage, turnover, and reordering.”  Inventory control is such a critical piece of an organization’s operations and bottom line that it is too important to leave to human error or antiquated systems. That’s why so many companies opt to invest in inventory control systems, so that all of the components of inventory control are managed by one integrated system.
Advantages of Inventory Control
scanner for inventory controlThe ultimate goal of your inventory control should be to maximize your organization’s use of inventory. When you maintain proper inventory levels, you can rest easily knowing that your capital is not unnecessarily tied up in your inventory. If you are in manufacturing, inventory control also protects production if there are problems with bottlenecking or the supply chain.
Typical benefits of a computerized inventory control system include…

  • Increased profitability
  • Having enough stock on hand so that you don’t run out
  • Barcodes and inventory control labels to track inventory efficiently
  • Reduction or elimination of inventory write-offs
  • The ability to conduct audits more quickly and efficiently

Pros of Computerized Inventory Control
If you handle several warehouse locations or need to access your inventory levels on the go, a computerized inventory control system may be right for your organization’s needs. Inventory control software solutions are more efficient than manual ones, allowing for more flexibility and an easier time retrieving information. Computerized inventory control systems allow you to quickly get a real-time glimpse into your inventory value. Other beneficial features of computerized inventory control include…

  • Inventory data integrated with accounting and invoicing systems, along with sales order processing and purchase order processing so that inventory levels and data update automatically
  • Automatic inventory monitoring, so that orders are placed as soon as the re-order level is reached
  • Automatic batch control
  • Ability to identify the least expensive and fastest suppliers
  • Barcoding systems enhance the processing and ordering process and speed up the inventory management process

Inventory Control Best Practices
inventory-control-definition
There are some best practices for inventory control that are worth considering so that you can achieve the ideal inventory levels in your organization. Modern Materials Handling gathered a panel of experts with more than 80 years of combined inventory experience to share their tips and advice for inventory control:

  1. Consider inventory optimization tools – “These optimization tools take into account demand variability, supply variability, and replenishment parameters to determine how much inventory to hold in order to guard against that variability.” ~ Dave Wheeler, principal of supply chain services for St. Onge
  2. Employ business solutions that use real-time analytics under one platform – “You have one picture of inventory, one picture of costs, and one platform to plan against. This allows you to have real-time inventory within that one model and even track who owns that inventory – even if I’ve got a product that has been consigned to me from my supplier, it’s still in the same inventory model.” ~ Jennifer Sherman, senior director for fulfillment applications strategy for Oracle
  3. Don’t treat all SKUs the same – “Each and every product does not have the same supply and demand variability pattern. Focus on those 20% that statistically make up 80% of the volume and manage that inventory really well, so you maximize sales and profits.” ~ Aman Sapra, senior project manager of inventory and supply chain strategy at St. Onge
  4. Keep an eye on your suppliers – “All of that data is typically available in a WMS, but has anybody really looked at it to determine unreliable suppliers?” ~ Aman Sapra
  5. Track essential attributes – “It’s not enough to just track your lot number. If you used subcomponents and subassemblies that you mix into your product, you also need to know those lot numbers in case your product has a recall.” ~ Curt Sardeson, managing principal of the Open Sky Group
  6. Leverage mobile devices – “It’s time for even businesses that don’t see themselves as complex to demand mobility solutions for accuracy.” ~ Jennifer Sherman
  7. Be smart about your slow-moving and obsolete items – “The more DCs that you store an item in, the more inventory you’re going to have. If you pull that inventory back into a single DC, you’re able to aggregate your demand variability, which allows you to reduce your required safety stock.” ~ Dave Wheeler
  8. Don’t neglect slotting – “As a daily activity, you can stay on top of [slotting] because it’s only a little bit of work and completely manageable. If you slot annually it becomes a major undertaking.” ~ Curt Sardeson

Further Reading
For more information about inventory control check out the following resources:

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