Stock control and inventory

Inventory control, also known as inventory software for small business, is used to show how big your inventory is at a certain time and how to track it.

It applies to any item you use to make a product or provide a service, from raw materials to finished goods. This covers inventory at every stage of the production process, from purchasing and delivery to use and replenishment of inventory.

Effective inventory control allows you to have the right amount of inventory in the right place at the right time. This ensures that capital is not tied up unnecessarily and protects production if problems arise with the supply chain.

This guide explains different inventory control methods, shows you how to build one, and where to find more information.

How much inventory should you keep?

Inventory control methods

Inventory control systems - manual tracking

Stock control systems - computerized tracking

Using IRF for Inventory Control, Stock Safety and Quality Management

Stock security

Control the quality of your stock.

Inventory control management.

Types of stocks

Everything you use to make your products, provide your services, and operate your business is in your inventory.

There are four main types of inventory:

Raw materials and components - ready to use in production

Work in progress - inventories of unfinished goods in production

Finished goods ready for sale

Consumables - for example, fuel and stationery

The type of inventory can influence how much you need to keep; see the page in this guide on how much inventory you need to keep.

Stock value

You can classify stocks in more detail, based on their value. For example, you could categorize items into low value, medium value, and high value categories. If your inventory levels are limited by capital, this will help you plan for spending on new and replacement inventory.

You can choose to focus resources on areas of greatest value.

However, low cost items can be crucial to your production process and should not be overlooked.

How much inventory should you keep?

The decision on how much inventory to keep depends on the size and nature of your business, as well as the type of inventory involved. If you are short on space, you may be able to buy inventory in bulk and then pay a fee to your supplier to store it, and you can request it as needed.

Keep little or no stock and negotiate with suppliers to deliver stock when you need it. You can see your stock through stock software for small business

Disadvantages

Meeting inventory needs can get complicated and expensive.

Lower warehousing costs you could run out of stock if something goes wrong with the system.

Without wasting stock you depend on the efficiency of your suppliers.

Advantages

This might be right for your business if it is in a fast-moving environment where products grow rapidly, the cost of purchasing and warehousing inventory is high, items are perishable, or stock replenishment is rapid and simple.

Efficient and flexible

Maintain a large volume of stocks

Advantages

Easy to manage Low management costs

You are never out of stock Inventories can go out of date before they are used up

Buying in bulk can be cheaper

Disadvantages

Higher warehousing and insurance costs

Some assets may perish

Your capital is tied up

This might be right for your business if sales are hard to predict (and it's hard to assess how much inventory you need and when you will need it), if you can store a lot of inventory at low cost. costs, if it is unlikely that the components or materials you are purchasing will undergo rapid development or if it takes a long time to reorder them.

Inventory levels depend on the type of inventory

There are four main types of inventory:

Raw materials and components

Ask yourself a few key questions to help you decide how much inventory you should keep:

Is the supply reliable and are other sources available?

Are the components produced or delivered in batches?

Can you forecast the demand?

Is the price stable?

Do you get discounts if you buy in bulk?

Work in progress - inventories of unfinished goods

Maintaining inventory of unfinished goods can be a useful way to protect production in the event of down-line problems with other supplies.

Finished goods ready for sale

You may be able to keep inventory of unfinished goods when:

Demand is assured

Goods are produced in batches

You are responding to an important order

Consumables

For example, fuel and stationery. The amount of inventory you hold will depend on factors such as:

Reliability of supply

Price increase forecasts

The stability of demand

Discounts for mass purchases

For more details, please visit: alfacybernetics.com

DavidStangley