Companies face more competition than ever, and that means they must work at their most efficient level. To maintain a competitive edge in a saturated market, one of the core areas of focus must be on the organization’s fulfillment processes. Efficiency here improves customer satisfaction, reduces costs and improves labor relations.
One way to optimize supply chain and fulfillment is through better inventory control. Utilizing inventory control consulting, organizations can find gaps that could be costing them valuable time and precious resources.
What is Inventory Control?
Inventory control does not mean having a strict limitation on how much product is available. Rather, the core focus is on the optimization of inventory levels to achieve the goals of the organization. There’s no value in having too much, and there’s significant loss potential when too little is available. Finding the sweet spot can seem challenging, but once organizations do so, they can operate at a high level of efficiency.
Ultimately, the goal of inventory control is simply to keep costs as low as possible so that the company can see improved profit margins.
Don’t Confuse Inventory Control With Inventory Management
Inventory control and inventory management are two different components of operational efficiency. Inventory control is one component of inventory management. Other elements of inventory management include:
- Managing stock in an end-to-end fashion, from the time of ordering through the point of selling it
- Forecasting the demand for supply based on available data, including past sales
- Creating a plan for replenishing stock
Inventory control concerns the following:
- Efficiently using the product or inventory already on hand
- Focusing on raw materials, operating supplies and other components
Both components are essential but very different. If an organization does not focus on inventory control, though, it may miss key advantages.
Companies using inventory control will likely see benefits such as improved in-house stock and demand balance and better-quality assurance possibilities. It also helps to reduce the risk of overstocking while avoiding the risk of understocking, both of which are costly mistakes for most organizations.
More so, inventory control provides a better visual of product demand and use. With more data, it is possible to better align capital to achieve improved revenue. That data, utilized in the right software, can provide valuable insights to companies.
Key Components of Inventory Control
With inventory control, there is a focus on how stock is put away and tracked. It provides a very high level of precision insight that allows companies to have faster insight into where their materials are. More so, it also provides a better level of oversight for those materials. For example, companies have better visuals of the product they have, which means they are less likely to have product spoil or stock lag until it becomes no longer usable.
There’s also the need to optimize the access to stock to ensure that what is most needed is readily available and within easy reach. This helps to speed up the work that the employee does while also making their job a bit easier to manage.
Improving Inventory Control
Many organizations see the value in improved control but don’t know the necessary steps to improve what is occurring. Yet, with a few simple changes, organizations can see better results, including lower costs and improved product management. Ultimately, this leads to improved profitability for organizations.
Many organizations benefit from a third party providing insight into areas of improvement. Learning how to improve inventory control may enable your organization to achieve more of its goals sooner. Having access to more data, such as in the use of modern inventory control software and better auditing processes, may help you to save a substantial amount of time and money managing your company’s products. For more information on optimizing your inventory control practices, please see the accompanying resource.
