What Stock Management Software Is And How It Can Help
Stock management software tracks, manages, and organises stock levels, orders, sales, and deliveries. The purpose of stock management software is to maintain an optimal stock level, track goods during transport between locations, receive new items, manage warehouse processes such as picking, packing, and shipping, prevent product obsolescence and spoilage, and ensure your products are never out of stock.
Software for stock management automates what used to be a time-consuming, manual process of counting each item one by one and recording it on paper. Digitising this process not only makes it more accurate, it saves valuable time.
Core capabilities include stock optimisation, product identification and tracking, service management for service-oriented companies, asset tracking, and reorder points. Stock management software can provide accurate data on stock conditions in real time, and also give you insights into trends so that you can respond to changing market demands and conditions without losing out on sales opportunities.
Determine Which Process Your Business Needs
You can determine whether you need inventory control or inventory management by assessing your current system and identifying gaps. Maybe you know every detail about your products, but your shipping or ordering process is not where it should be. Or maybe you can track raw materials all the way through order fulfillment, but your stock area is messy and disorganized.
So, which process do you need: inventory management or inventory control? Most businesses can actually benefit from both. An inventory management system that has proper inventory control will yield more efficiency, lower operating costs, better forecasting, increased warehouse organization, and greater profit.
What Is Store Inventory Control
Inventory management can be challenging, especially when youve got several warehouses to maintain. It often involves a stock-take day counting each item of stock in your warehouse and recording the results.
Although this can be sometimes tedious, its vitally important for a business to stay on-track with inventory levels. And nowadays, there is also useful inventory management software that can help with stock control, making the process smoother and easier than ever.
Holding onto stock can disrupt your cash flow, which is bad for business. Not having enough to meet customer demand is equally damaging. Thats why effective inventory management is vital for a growing business.
So, read on to learn more about store inventory management and how it can impact your business.
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Barcode Systems As Part Of A Comprehensive Stock Control System
For a stock control system, it bears mentioning that barcode systems are often ideal for tasks that require counting large numbers of physical items such as stock takes, receiving shipments, packing orders and shipping or transporting orders. Barcode systems provide a method of labeling and identifying products to count them quickly with a minimum chance of human error.
Most small and medium-sized companies start keeping track of their stock with stock control software before incorporating barcodes and barcode scanners. If the goals of your business systems are to reduce human error and increase efficiency, the best practice is to begin by identifying the process points that are in most need of improvement.
If the pressing problems revolve around the physical counting processes, early investment in a barcode system makes sense. If records are inconsistent or wrong, tracing back more to the organization than to miscounts, it may make sense to start with stock control software and incorporate barcoding when you have a firmer grasp of the benefits.
What Is Stock Control System
Stock control system includes all the functions and steps associated with the management and maintenance of the inventory. The stock control system accounts for all procedures starting from purchasing to receiving / re-ordering products.
Within a few decades, this market has been experiencing a new trend of globalization. Businesses have supervised stock control on notepads. Since the last few years, retailers and manufacturers have started to rely completely on stock control systems for their entire inventory management.
Similar to inventory management systems, the Stock management system allows retailers to track goods across supply chains.
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Know Your Star Products
ABC analysis is a good inventory control technique to segment your warehouse stock based on the value it brings to the company. Every item in your warehouse has a different value in terms of how much money it makes the business. There are many ways to define value, including segmenting based on sales revenue, profitability, sales volume or annual consumption value. Choose one that works for you. Then split your stock into categories: A, B, and C. A being the items that are critical to your businesses success and C being those that are least important.
ABC classification is a simple way to identify your most important products so you can focus your time in terms of stock control and management. In addition, it can help you set out more focused stock control parameters
It is, however, a very simplistic framework and fails to account for supply and demand variables. For more complex inventory classification, use inventory optimization software, which carries out multi-dimensional item categorization. By segmenting SKUs based on their demand, inventory turnover and their profitability you can get a much greater insight into controlling your stock levels.
What Are The 4 Types Of Inventory
Before getting into details about the types of inventory control systems, its important to understand the different types of inventory.
Generally, inventory can be grouped into four primary classifications:
Inventory can be further classified in several ways depending on the industry, the companys operations, and the types of inventory the company manages. Companies that purchase finished goods and sell them to customers at a markup have just one type of inventory called merchandising inventory.
Some companies, such as manufacturers, need to manage a variety of inventory in different classifications, making efficient inventory tracking a must. To effectively manage inventory, an inventory tracking solution is paired with an inventory control app or inventory management app.
The Importance Of Stock Management Software
Managing your stock within a solution is vital in keeping track of how much inventory you have, and how much you will need to order in the future to fulfil orders. A solution prevents having too much stock, which is costly to store, and product shortages, which leads to disappointing customers and losing sales.
With stock management you can:
- Forecast the future sales of your business, and plan product numbers accordingly.
- Consolidate the management of your supply chain into a single solution for more advanced control of your business.
Improve Your Fulfilment Accuracy
Having good stock control in place makes it easier to manage your storage. It means products can be found quickly, handled efficiently and delivered to customers as soon as possible. You should avoid:
- Storing multiple SKUs in a single location one jar of honey can look very much like another one
- Storing products with varying units of measurement together those 200ml and 300ml jars can be easily confused.
In addition, using a warehouse management system will help. Humans alone are capable of 97% pick and pack accuracy. Add technology into the mix and that goes up to 99.999%.
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The Benefits Of Effective Asset Stock Management
Investing in an stock management system can yield excellent ROI. Not only does an stock management system make it easier to get your products to the customers who want them, it can provide valuable insights so that youre ordering the right stock at the right time and in the right quantities.
Here are some examples of how investing in stock management pays off:
- Cutting costs
Order stock in the right quantities at the right time so that youre never over- or under-stocked.
- Maximising labour
Tracks stock from manufacturing to when its used on the production shop or factory floor.
Reduce Your Storage Costs
With your online store doing so well, it can be tempting to add more and more products to your range. But for eCommerce stores, the Pareto Principle almost always applies 80% of your sales will come from 20% of your products. The other 80% of your range will cost you money, as it sits on the shelves of your own warehouse or an outsourced fulfilment centre. Through stock control, you can ensure you know which of your products are making you money and which are costing you money and start phasing out the latter. Sure it can be hard to say goodbye to products that youve spent time and love developing, but ultimately, being ruthless with your range will help you:
- Reduce the amount of storage space you require, and hence your storage costs
- Make it easier to pick and pack orders for delivery, again reducing your costs
- Limit your financial losses, should you need to sell products at a radically cut price
- Save orders being delayed, as you spend time making space for new products in your warehouse, rather than picking, packing, and shipping them.
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Fifo: First In First Out
FIFO is a common-sense approach requiring that the first items received are the first items sold. The FIFO method is crucial for businesses that deal in perishable goods like food or flowers. But it can also be important for businesses that stock other products that are at risk of becoming obsolete over time.
Reconciling Lost Damaged Or Stolen Items
A reduction of inventory in a retail store is often referred to as shrinkage. The average shrink percentage in the retail industry is two percent. And in 2016, shrinkage cost retailers more than $49 million in losses, according to the National Retail Security Survey on retail theft.
There are four main categories of inventory shrinkage due to loss and theft. According to a 2014 study, shoplifting accounts for 38 percent of retail shrinkage, employee theft accounts for 34.5 percent, paperwork errors make up 16 percent, and supplier or vendor fraud accounts for seven percent. Some experts also have a fifth category that encompasses all unknown reasons for inventory loss it makes up six percent of all inventory shrinkage.
When goods are damaged they are also included as part of shrinkage. The damage may happen while en route to your store or in the store itself.
However it happens, shrinkage is a very costly problem for retailers and can result in a loss of profit. And its a double hit you cant recoup the cost of inventory and you cant sell the inventory to make revenue.
To cover these potential losses, you might increase the prices of your goods, passing the cost to your customers. But that can backfire if customers are price sensitive. You might also need to increase processes that stem theft and loss like security which ups your overall budget.
How To Pick The Right Inventory Control System
On that first shipment, it is easy to get your product out of the door. Generally, there are toomany people and too few orders. Once a business gets established, the opposite is true.Soon it feels like the product is flying in and out of the doors, and only the WarehouseManager knows what is in stock.
Peers start talking about their Inventory Control Team, but what is inventory control?What should an e-commerce business look for when investigating Inventory ControlSystems?
Get On Top Of Stock Control
If you hadnt noticed by now, stock control is an indispensable and unavoidable facet of restaurant business management.
Stock management goes beyond your restaurant profit margins. It can affect your workflow, your customers, food supply and the environment.
Equipped with the right tools and processes, along with a team that takes reducing food waste as seriously as you do, its possible to cut down on food waste, minimise your cost of goods sold and maximise your stocks return on investment. Want to know how Lightspeed can help?
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Inventory Control System And Software
One of the best ways to take control of your business’s inventory is to invest in inventory management software. This software tracks inventory levels, sales trends, and inventory cycles. There are many options on the market with a variety of capabilities and additional tools.
Most of these programs can be tied to your POS system to provide a perpetual inventory count. This updates your inventory levels each time a sale is made. This lets you make the most informed decisions and calculate optimal reorder points, plan for product lead time and more.
Stock Management System Basics
Everyone knows stock out means money in, but without a clear view of your goods from initial receipt to ship date, your companys largest asset could be losing you money.
The key to an efficient and profitable business is total visibility into the stock process from start to finish and management tools to help you maintain optimal stock levels year-round. An effective stock management system helps you streamline all the moving parts of your warehouse: From recommending optimal stock levels all the way to keeping your supply chain organised and running smoothly.
Learn the basics of stock management and discover how an stock management system can help you increase profitability and reduce waste.
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Stock Control: The Basics
Stock control includes tracking and accounting for the items you sell, use or manufacture. The stock control system you use will depend on the size of your business and the type of stock you have. In some cases stock is also referred to as inventory.
There are four main types of stock:
- raw materials
- finished goods
Knowing what stock to buy, when to buy it and how much to buy is essential for good stock control.
Stock items may vary in value, and certain stocks may be perishable or seasonal, which can influence how you manage it.
When you are developing a stock control system for your business, you need to take into account the associated costs of holding stock, such as:
- financing .
It’s also important to work out how much stock you need to hold in order to run your business successfully. You can do this by calculating your stock turnover rate and performing an annual stocktake, which may be legally required for some business.
This guide outlines the basic elements and methods of stock control.
Top Tips On Inventory Management
The first step to effective inventory management should always be to check what actually gets delivered against what you have ordered from your supplier. Its easy to assume that the numbers match up, but according to our observations, a good 1% to 2% of stock orders are incorrectly packed. If you just assume that you have the correct amounts, you could end up paying for stock you havent received and being short-stocked when you receive a customer order. This may sound very time-consuming – however, this process doesnt necessarily need to be manual. For example, Clouds goods-in process requires all inbound deliveries to be booked in with our warehouse staff, thus any discrepancies can be seen on our platform in the Non Conformance Report .
Doing so can have a noticeable impact on your bottom line and allow you to grow faster.
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Record Your Product Information
It is important for you as an owner to find product information in your warehouse. The information in question includes SKU, barcode data, which one is the supplier and where the item is coming from, etc.
Other product information that you should know is the price. By knowing the price, you can make adjustments if there are changes that affect the price. For example, the item suddenly gets scarce so that the price rises, so on and so forth.
Days Of Inventory On Hand
Days of inventory on hand is a ratio measuring the average number of days an item is held in the inventory. Since inventory cost represents the opportunity cost of funds, this ratio indicates how well inventory is being managed and is one of the elements in determining the operating cycle of a company.
Formula:Number of units in inventory × 365 ÷ Annual usage in a number of units
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Understand Where Youre At
Do you have any processes to keep track of your stock? Do you know how much money is sitting on your shelves? Its important to take the time to understand where youre at so you know what you need to do to improve your stock management.
To do this, we recommend regularly doing stock take in order to understand your inventory.
Automate The Stock Control Process
This way, you can reduce manual inventory tracking and optimize stock levels. The notification points you set can be based on the insights you have using ShipBobs free analytics and reporting tool that provides insights and visualizations using historical order data to help with demand forecasting.
I wanted to create something that was fully automated, so I could focus on driving sales. I didnt want to have to worry about inventory and distribution as much.
When I was gearing up to launch the business, I was looking for someone who would automate fulfillment for us. I chose ShipBob, and it turned out to be a very easy and scalable solution.
Josh Hollings, Founder & CEO of Drop FX
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