Stock management, also known as inventory control, is used to show how much stock there is at an given time and keep track of it. It involves every item used to produce a product or service – everything from raw materials to finished goods, as well as purchasing, delivery, and reordering stock. Having efficient inventory control allows you to have the right amount of inventory at the right time. Capital is not restricted unnecessarily, and remedies production problems. Stock management is all about understanding the unique inventory mix, as well as both external and internal factors.
There are four main types of stock:
– raw materials that are production-ready
– work in progress
– finished goods ready for sale
– consumables
The type of stock you have can affect how much you keep on hand. Stock can be further categorized based on its value – low, medium, and high value categories.
Stock management is important for various departments in an organization. It also includes connections between replenishment, asset management, carrying costs, price forecasting, stock on hand, stock space, and more. Customers are the ones that are pulling goods from stock (pull), and the company fills order moving stock out (push).
Successful stock management involves comprising a plan to manage and track existing inventory. Two common stock management strategies are the just-in-time (JIT) method and materials requirement planning. When developing a stock management system, several things should be kept in mind: insuring, warehousing, shipping, and financing. In addition, it’s important to know how much stock is needed to run a business successfully.
Today, retailers have to have innovative technology to reach optimum return on investment. A good electronic point of sale (EPOS) can help businesses better maintain their cash flow. The EPOS will optimize stock management and provide added security. It saves time by increasing transaction speed and customer service.
Lastly, it allows an organization to make informed decisions. An EPOS system improves efficiency, reduces errors, and prevents fraud. It allows the ability to respond to competitive offers. It is easy to access reports in a secure and reliable manner.
There are several key features of a successful stock management system. A good stock management system should allow the ability to monitor customer demand changes and track input costs. This increases purchasing efficiency. The system should allow up to date information on inventory. Also, it should allow you to update and implement structures for special pricing. It will keep track of accounts and do banking functions. It should allow you to track orders, update profile information, and update revenue. Increasing the speed of transactions and increasing productivity. Ultimately, you will obtain more revenues.
Regardless of industry, Enterprise Resource Planning (ERP) software provides real-time information on inventory level and values on raw materials, work in progress, and finished goods. It is an affordable solution to supply chain management. You can take existing reports and customize it in numerous ways. They can be saved in the system and viewed at any time. The extensive reporting feature not only gives an average cost but accurate totals. In addition, each piece of data can be drilled down further to give extensive detail.
Usually, you have to wait until month end in order to roll over amounts. ERP reports are instant in real-time. You can set up groups of customers, or each individual customer. There are many ways to structure discount and pricing options. Barcode picking is a great warehouse feature and it removes human error.
This feature of ERP allows the order to be placed, the warehouse can complete the order, without even touching the computer, by use of a scanner. ERP can even track the length of time it takes to pick and pack the goods. Bill of Materials (BOM) allows a product to be made with different products. You can also run specials – ERP software can automatically adjust the price to match the price assigned for that particular special period.
In order to maintain an accurate stock management database, complete details are pertinent. You are able to create customizable fields and drop down menus. These have the capability for amounts to be drilled down for more detailed information. The range of stock management is very broad. ERP software can automatically track stock levels, as well as make changes across multiple stores. You can also order inventory for each store.
Multiple warehouses can be run in ERP software, including individual stock levels. It can do instant reports on what is available at each location. ERP software will also allow ordering for each location or one bulk order for all locations. Prices can be different for each location as well.
ERP software has the ability to track stock in batch numbers, so that the oldest inventory can be identified easily. This is also great for identifying which customer has purchased a certain product like carpet or chemicals. Individual products can be tracked with their own separate numbers. Prints the location of each inventory item that is in the warehouse by rack and bin. Printing picking slips is easy – individual slips or groups of slips.
ERP software can create a full price matrix for inventory. It is customizable, as opposed to standard labels like color and size. You have the ability to create any type label. ERP software will track those matrix options, so you can see at a glance what products are available in any combination. You can set reminders on products for when they are running low in stock. These adjustments also allow you to set percentages – any cost change will adjust automatically.
ERP inventory management is useful in the entire production cycle for shipping, logistics, orders, and billing. It’s used to usher finished goods inventory, through the productions cycle and will be tied to these other functions. Businesses have to know what is on their shelves, at any given time. And when to re-order goods so that it flows throughout the operation seamlessly. The goal is to turn over the inventory, otherwise you’re not making a profit.
The main functions of inventory management are receiving, storing, and returning. Everything has to be accounted for whether it’s coming in or going out. ERP software provides a way to track related items. For example, for a new cell phone, ERP modules can tie all the inventory to the cell phone – materials, status of component parts, serial numbers, tracing, and kits of the cell phone needs to rebuilt. ERP inventory management can also track purchases to determine spending levels. Cash management is a crucial factor when a lot of inventory is being carried.
There are also hardware features that track inventory. Combining this feature with an ERP software system can be highly effective. Hardware features collect data from a customers’ computer. ERP software supports a range of hardware – scanners, printers, computers, tablets, and more. Workstations don’t have to be as powerful as the server hardware itself. Barcode scanners are a good addition to boost efficiency for point of sale and inventory control.
They use different methods to read the vertical black lines and white spaces that make up the bar code. The scanner processes what it reads to an ERP software system. There are various types of scanners, depending on what is best for your business.
Point of Sale (POS) stations can be set with cash drawers and credit card swipe machines. A growing trend in POS software is touchscreens. It combines a mouse and display screen which allows the user to point and touch selection on screen. Two technologies allows this to work: pressure and resistive.
The resistive technology is relatively new and has proved to be a better option that the pressure method. It can sense changes in resistance in a grid patter embedded in the screen. Magnetic card readers are devices that read and send credit card information to an ERP software program. Some ERP solutions require the reader to be programmed with it.
As mentioned, retail businesses rely on POS software. When coupled with an ERP system, it can handle the daily processing of sales. For small businesses, inventory management is still important aspect. Although many small business retailers use manual systems, it is best to adopt an automated inventory management system for various reasons:
– spreadsheets can become too large and difficult to manage
– easy to make human input errors
– data can be lost or even corrupted, since storage is local
– it is difficult to tie other systems in such as POS software or ERP software
– it is not scale-able
– the data cannot give real-time updates
– it can be difficult to analyze information such as best-selling items, color, or size
– it is nearly impossible to share data with all departments
Using an inventory management software system that is flexible can handle current business needs, as well as expand for the future. Just because business is small now doesn’t mean it will always be that way. With growth in business, you’ll need to upgrade your management systems seamlessly. It will be much easier to analyze data if it’s all in one place. An inventory system can simplify multiple systems into one. This also controls extra overhead costs that can take away from profits. Lastly, you’ll have the capability to share data from various channels with staff.
Small businesses have their own set of unique challenges, especially when starting up. Inventory management and ERP can make the job easier. In addition, there are inventory management software and ERP systems specifically for small business. There are three components of a successful small business inventory management system: stock room, receiving and counting, and a POS system.
You need a place to do inventory. It also needs to be set up in an efficient manner and used properly. Standardize stock checks, as well as the way products are delivered. Lastly, integrate the use of technology that makes managing inventory easier and more efficient.
By integrating can ERP system with an inventory control system, you can access systems such as Accounting, Point of Sale, and Social Media Management. This saves time and money. For example, e-commerce sales can be tracked by POS, recorded in accounting, and then logged in the control system. In addition, analytics can show you the origin of the sale.
For example, if it was from your website or from Facebook. Because of the cloud computing technology, this integration is easier. It is accessible to large and small businesses. Now, any business from any industry can have an efficient system that helps to generate more profit.