Controlling a company’s inventory is a vital activity. It represents the source of supply to meet business demand, which ultimately means that it is one of the most important activities for the organization to deliver on what has been promised to its customers.
Therefore, it is of great importance to define clear strategies and maintain the attention of the responsible team in performing an efficient management of the stock, aligned with the organizational objectives. This becomes all the more essential because it is a process with several challenges to be overcome and of great impact on profitability.
Let’s look at some practices that can help you with your inventory management and open doors for better results.
Control the Stock
Inventory turnover is among the key indicators for controlling enterprise stock. Basically, it measures the number of times the stock has been renewed in a given time interval. That way, you can gauge if you have maintained an optimal volume of items.
If stock turnover is high, it means you have an efficient operation, where products are not “stuck” on the shelves. In this way, the capital of the business remains free for investments in other aspects that produce return to the organization, rather than fixed assets.
Work with Security Stock
One of the great objectives of inventory control is to prevent missing units for customer service. Therefore, one of the main tools to meet such a requirement is the security stock. This is a quantity of items calculated as surplus to the zeroed stock. Thus, when it arrives at the resupply point, which is the minimum acceptable stock for new units to be ordered, the request is made and, in addition to the volume of items required until the new consignment is received, there should be a quantity for covering unforeseen, such as delays.
Invest in Technology
Technology is a central factor for any business today. It has become an indispensable item for the development of a series of activities, which includes inventory management.
Some examples of contributions that it brings in this case are specific programs to develop the steps involved and various possibilities of process automation. Therefore, this is one of the main ways for the consistent control of its inventory operation.
Attention to Valuable Items
Another good practice involved in inventory management is validity control. It is necessary to find ways, if possible automated, to ensure that you only work with items within the ideal condition of use, which excludes overdue items.
Many techniques help in this process and one of the best known is the FIFO, acronym for First In, First Out, which in free translation means “First to enter, first to leave.” Basically, it advocates that the items should be used depending on their arrival in the stock, releasing first those who arrived first and reducing the possibility of maturities.
Analyze the Usage Profile of each Item and Assemble a Rational Stock
Our sixth tip refers to logistic factors, as is the case of displacement. The more an item is sued, the more it will be taken off the shelf. This indicates that it is better that the most used items have a lower access distance than the lesser used items.
This is just one of the principles that must govern the assembly of the business inventory layout. No matter how simple items look, many organizations overlook their potential gains and lose large amounts every year, thanks to the small losses that accumulate and become gigantic losses over time.
So the trick is: work for a rational stock.
Integrate Processes Associated with Inventory Control
The last good stock control practice we want to highlight is process integration. The activities of each department of a company are interrelated and must be conducted in an integrated manner to generate synergy.
Therefore, the ideal is for you to evaluate, for example, the impact of sales on your stock which, in turn, will affect your financial control.
A great way to have this comprehensive view and maintain accurate control of the entire chain is to use an ERP. It is a software specially directed to offer a virtual interface of your organization and to enable a broad management of your processes.