Inventory control is one of the most important things in the fields of industry and production, and it simply and briefly represents all the methods or methods that ensure the existence of detailed lists of the (primary) raw materials necessary for manufacturing as well as the manufactured materials that aim to meet the needs of customers throughout the year, avoiding the freezing of cash flow and reducing Waste of resources.
Inventory control has a role in determining the quantity of inventory of a particular item, as well as when it must be requested from the Purchasing Department and determining the safety limit that does not fall below the minimum stock of this item, and in this matter we will get to know together what is meant by inventory control in some detail.
What is meant by inventory control?
At first glance, inventory control and inventory management look the same, and the reason for this confusion is that they both cover similar rules revolving around the famous question, “What is the ideal quantity of inventory a company should demand?”
But inventory control is a process that regulates and maximizes your company’s warehouse inventory, with the goal of increasing profits with minimal investment in inventory, without affecting customer satisfaction levels. The inventory control process includes the following:
- Barcode scanner integration
- Rearranging reports and adjustments
- Product details, date and location
- Comprehensive inventory lists
- Synchronize inventory in real time with sales orders and purchase orders
Objectives of inventory control
The most important objectives of inventory control can be summarized in the following points:
- Obtaining the lowest prices from raw materials that have a direct impact on increasing the profit margin of the manufacturer.
- There are many raw materials that are available during certain times of the year, that is, seasonally, and therefore quantities of them must be reserved to ensure that the consumer is not disconnected from the finished product.
- Not to freeze cash flow resulting from the increase in inventory, and improve productivity by reducing losses resulting from increased inventory, and managing cash imports and exports.
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How to practice inventory control
Given the importance of inventory control and its role in increasing profitability, and ensuring that there is sufficient inventory on hand so that it does not run out,
There are a number of inventory control best practices that you should try and take advantage of, and here are the best practices for inventory control:
1. Use inventory optimization tools
Inventory optimization tools are of great importance, because they actually take into account the fluctuations of demand and the extent of supply variability. They also have a number of parameters that can help you determine how much inventory should be kept to meet the differences between demand and supply.
2. Use real-time analytics
Real-time analytics helps you identify inventory in real time, and it can help you track that stock in one form.
3. Avoid treating all stock holding units the same way
One of the most common mistakes in inventory control is treating all inventory holdings in the same way, which is wrong because every product differs from the other in terms of supply and demand fluctuation patterns, and in order to be able to increase your sales and profits, you need to focus on those who represent 80% of Your stock size.
4. Monitor your suppliers well
One of the best practices in inventory control is to follow your customers closely, so you can identify trusted people and untrustworthy people.
5. Try to take advantage of smart phones
One of the most prominent and best practices in inventory control is relying on devices and smartphones, thus providing the largest number of mobility solutions and thus providing greater accuracy and speed in work.
The Pareto principle
Did you know that 20% of the employees of some companies do 80% of the work? Did you know that 80 percent of some organizations’ profits come from only 20 percent of their clients?
This is due to the 80/20 rule or what is known as the Pareto principle, a principle that was developed by the Italian economist, Philfredo Pareto in 1896, and this principle states that 80 percent of the results come from only 20 percent of the causes of a specific event.
And the 80/20 rule helps companies stop trying to do everything at all times so that time, energy and money are directed to those things that yield the highest and best results with the greatest possible effort.
The more focused the inputs, the better the output, and for inventory control, you need to focus only on those 20% who statistically make up 80% of the volume and manage this inventory, which will enable you to maximize sales and profits.
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Inventory management software for better inventory control
Inventory management is one of the most important things that can affect the efficiency of any business. Inventory is one of the most important assets that the facility owns.
Therefore, attention must be paid to managing it well through the so-called inventory management system because it greatly helps in the inventory management process.
In addition to that it saves a lot of time and effort that traditional methods spend, inventory management software can help you effectively improve your inventory control, and Diggipacks can help you provide inventory management software to monitor your inventory.