Some people call it stock control. Others call it inventory control or management. Regardless of what you call it, whether you think of the materials used for business processes as stock or inventory, this type of operations management is important, and plays a critical role in a business that ships products to customers.
Some of the best practices for stock control involve looking at levels of inventory over time and making more accurate and targeted judgments. Here’s some of what companies are working on today to innovate and improve inventory handling and control processes:
Strategic Stock Control and Inventory Handling
Many new stock control tools have to do with automating inventory processes. In general, companies look toward an idea called just-in-time inventory, or JIT.
This new type of inventory management changes the model from the traditional practice of keeping massive amounts of raw materials or product components on warehouse shelves. Another name for just-in-time inventory is “on-demand inventory” — it’s the idea that a business should only keep on hand what it will immediately need to satisfy customer orders.
Because companies play closer to inventory margins with just-in-time inventory processes, it’s a best practice to always make sure to meet demand at any given time. Choosing a “better safe than sorry” approach can improve how well just-in-time inventory works.
In addition to just-in-time inventory methods, companies can choose continuous or periodic review of inventories. Continuous review is more proactive in replenishing reserves every time an order occurs. Periodic review is more scheduled and less labor-intensive in general. Another good tip with stock control and inventory management is to limit the number of “touches,” or interactions, with a particular piece of inventory to maximize efficiency.
Fresh Inventory Flows
Some other stock control and inventory handling resources look at the flow of imagery through a purchase order or delivery process. A “first in, first out” (FIFO) or “last in, first out” (LIFO) system can add precision to inventory flows. FIFO involves the “assumption that the first goods purchased are also the first goods sold,” while LIFO involves the “assumption that the last item of inventory purchased is the first one sold.” It’s important not to hide a stock or inventory item from transparent processes, and to make sure that information silos don’t contribute to inefficiencies in the system.
Scanning and Tracking Equipment
Another best practice for quantity stock control systems is to have barcode scanning, radio frequency ID tags or some kind of physical system in place to digitally track your physical resources. Some of the best inventory control software works directly with these tools to give leaders a very detailed view of where every inventory resource is, all the time. This can relate to the process of signaling, which is very important for inventory management. Items that are better tracked are easier to integrate into your inventory signaling, which drives more precision in how a company manages its assets, including raw materials.
Some aspects of stock control software also allow companies to keep checking inventory for quality. Quality control tools can help inspect inventory for damage, and document any extreme wear or defects in products. Some software can help document environmental conditions. For example, this can be important in cold chain management, where perishable products have to be handled in specific ways to protect the integrity of the products, or in other supply chain scenarios.
Standalone or Comprehensive Software Systems
Another best practice is to choose what works best for a company — to use a standalone stock control software product and integrate it with an umbrella ERP system, or to purchase all sorts of business software as a unified suite. There are a lot of pros and cons to both of these choices, and they all have to do with the size of a company, its customer base, costs, and its internal operations. Doing the right kind of research helps a company match the software tools to its needs, to get the right fit for inventory management and warehouse management software.
Looking closely at different inventory management software can help buyers make better choices in stock control, re-order level choices, and the management of inventory materials. Doing the required research is a big part of fitting the software tools to the user. When that research is done, the firm can run efficiently on its digital resources.