It is wrong to think that inventory control is limited to the entry and exit of materials or just having them in storage for sale. On the contrary, this resource is fundamental for companies to achieve the desired result. After all, stock is considered the “lung” of businesses that sell products. If it isn’t working well, everything else will suffer.
Despite this, many organizations still do not invest in good management, which can have several consequences. In this article, we’ll talk more about inventory control and its importance. Check out!
Read also: How to Make an Online Inventory Control?
What is inventory control used for?
Inventory control is a mechanism used by establishments of different branches and sizes – including foreign trade – that need to manage the flow of goods. The main objective is to forecast the demand for products so that the customer is always served.
In addition, it helps to avoid product losses, controls and registers all entries and exits, monitors the cycle of stored goods, distributes them to warehouses and, most importantly: ensures customer satisfaction.
To ensure a skillful operation, it is necessary to have an assertive strategy related to forecasting sales demand. One of the biggest mistakes made by foreign trade companies is predicting demand that does not materialize.
This divergence leads to a capital that is stopped inside the company, that is, an asset that will only depreciate. On the other hand, not having the product available to the customer can affect your brand reputation. In view of this, it is necessary to rotate the goods sold.
With efficient management, it is possible to streamline sales, improve productivity and organization of the company, and reduce waste. In addition, you have a clearer view of the movement of goods, obtaining accurate information about which ones have the highest output and which are stranded in the warehouse.
Good inventory control also influences the efficiency of your employees and, consequently, the health of your business. Without organization, your employees waste time looking for files, spreadsheets and emails, running to the warehouse every time there is a question about inventories and stored products, among other problems.
By using an inventory control system, it is possible to place them in more critical tasks. That way, they can focus on more serious tasks and you’ll have peace of mind that everything you need to know about your business will be easily accessible.
Read also: Learn more about the Siscomex Single Portal: Modernization of Comex Processes
Inventory control methods
Curva ABC
Known as the ABC curve or Pareto analysis, this is a common method used to prioritize decision making by the degree of importance of each item in inventory. The application consists of categorizing the stock by relevance to the company’s billing, which is weekly, monthly and annual.
The key concept of the ABC curve is the identification and execution of the 80/20 rule, in which 80% represent the most prominent products in the stock classified as A, 15% being B and 5% being C. C ratings represent a smaller part of the billing, but they are important in your business, as they can serve a specific customer and take them to A ratings.
Demand Forecast
Fundamental for procurement balancing and sales planning, as it allows for multiple ways of projecting the coming period. It is established after analysis of past results for a good prognosis.
There are interesting ways of working with demand forecasting, directly helping in decision-making for the year or a certain period. Some of them are: Moving Average, Seasonal Period, Exponential Smoothing.
To use this type of estimate, it is necessary to have knowledge about demand and identify whether there is variation in sales execution. As the demand is variable, the moving average can be made based on the last three months or years to project the next period.
The only difference between smoothing and averaging is that, for the calculation, a weight will be added for the time taken into account. For example: the evaluation based on the last years will have less weight than the last months.
This forecast is aimed at businesses that are extremely seasonal, adopting the analysis referring to the period of growth or decline in demand from previous years to be used as a basis.
Just in time
It is a method where an organization produces the goods as per the exact demand. Nowadays, several companies seek to have facilities close to their suppliers to reduce the replacement time for goods used as raw material or for simple resale. In this way, stock is reduced and the customer served as soon as possible.
Cross-Docking
Widely used by the retail branch to speed up delivery/replacement time (Lead-Time). It achieves a considerable reduction in product stagnation time in stock or reduces the need for storage.
inventory turnover
This method is usually adopted by small and large retailers to control future purchases of goods, based on the movement of incoming and outgoing stock, establishing a standard for future analysis. It can be used in a single way, post ABC curve or inventory.
The main idea about a good turnover is to understand every movement of the product in stock, considering periodic or annual replacement points. The intention is to have a straightforward analysis to establish a simple calculation and extract the necessary information.
Also read: See How To Make An Inventory Planning
Inventory control tips
Keep your stock up to date
Effective inventory control must ensure that each company’s product has a predetermined location in the warehouse. It also ensures that the registration of each product is always up to date. This will ensure that your sales team has access to up-to-date data at all times.
Data accuracy not only benefits the sales team, but the entire company. Thus, the purchasing department can account for the cost and quantity of each item in the company’s inventory to determine how many to purchase in the next month. With accuracy, it is possible to make this decision more safely.
Inaccurate inventory can lead to lost sales. For example, an employee may tell a customer that an item is out of stock and later discover that it is actually available, or vice versa. Or worse, a buyer might be directed to go to a different store that carries the item when it hasn’t been purchased by the company in a while. If you have a reliable inventory control system in place, these types of human errors will become almost non-existent.
Store the products according to the characteristics
To be more efficient, you must store the goods according to the particularities. For example, dangerous goods must be stored in places with controlled access, as must expensive items. Some perishable products require a special storage space, with refrigeration.
Be careful with the conservation of goods and supplies
The products need to be stored in a suitable environment, away from temperature and humidity variations, in accordance with the manufacturer’s guidelines. Immediately after unloading, it is necessary to check the conditions of the materials received to check whether they were transported in accordance with conservation standards.
Sort by outflow and popularity
The advantage of optimizing inventory control is that this process allows you to track sales and orders for each product in the company. This information helps you to better organize your inventory. Position your best sellers where you can easily reach them, such as near the exit.
As these products will be accessed continuously, this will reduce staff work and movement around the warehouse. Thus, storage and shipping will run faster.
Have performance indicators
The performance indicators (KPIs) are intended to analyze the operational performance of the company’s inventory control and identify bottlenecks or failures in the process. The sooner a company implements logistics technologies, the greater the chances of making the right decisions according to needs.
Ensuring the right product is in the right place at the right time is critical to managing supply chain volatility. Software that has inventory management can streamline operations by consolidating sales information and giving employees access to current and reliable data.
Why have good inventory control?
Exact location of all goods
Companies with multiple storage locations suffer when their servers have to perform a complex search to find out where products are, or to confirm that they are really there. Accurate stock control will eliminate any problems with location, including making customer service much faster and more effective.
Comply with delivery dates
You don’t want the customer to wait for you to receive a shipment from the supplier without giving him a service forecast, just because he doesn’t know when he’ll get data on the tracking of the product, do you? With improved stock control, you will be able to track your goods much more accurately, even if they are still en route to the warehouse.
reduce losses
When inventory is not properly controlled, situations may occur in which there is a lack or excess of products, which can lead to financial losses. If the establishment does not have merchandise that is in high demand by customers, it may lose revenue. If you have too much, it may expire or deteriorate over time.
have more assertiveness
Through an inventory control system, errors can be reduced with the preparation of notes, quotations and with several other aspects of the routine. This avoids wasting time, materials and rework, making the company’s operations more fluid.
Get to know Mainô’s stock control!
Did you know that Mainô has an intelligent stock control designed especially for importers and distributors? With it, you can manage all your goods, from receipt to the time of sale.
You have transformative resources for your administration, such as:
- organization and traceability;
- measurement unit conversion;
- critical stock alert;
- inventory management reports;
- control of stored products;
- automatic registration from the NF-e of third parties.
Want to know more? Get to know Mainô’s stock control!
By Suellen Martins
Original de Maino