Holding too much stock costs you money. But not having enough may leave you unable to meet customer demands. Stock control is all about balancing these two competing goals.
With a focus on stock control, you can minimise costs and maximise sales. And that’s important for businesses of all sizes.
Why is Stock Control Important?
Ensuring stock availability while simultaneously minimising stock holding costs is a critical balancing act. When your customers know that their orders are always fulfilled without any out-of-stock situations, they will come to see you as reliable and trustworthy. Their loyalty and repeat business will pay off in the form of positive reviews and a growing bank of social proof, which will enhance your reputation and influence others to buy from you.
Running out of stock not only causes reputational damage, but it also means you don’t get the sales. You can’t rely on today’s customers to wait for a restock – they are more fickle and demanding than ever and will shop elsewhere, meaning you miss out on essential revenue.
Stock control systems also help maintain order in the warehouse. Your stock counts are up to date and you always know where your stock is. With insight into your sales, you can put stock management strategies into place. Walking times can be minimised and picking can be accelerated by siting fast-moving stock near to packing stations, or collocating products that are frequently ordered at the same time or creating pick-faces that consist of the most popular products.
Stock control also eliminates many manual processes, saving time and releasing staff to concentrate on more important or more profitable tasks.
Stock Control for Large Businesses
A key benefit of stock control for large businesses is that it provides visibility of stock across the business. Large companies hold stock across a range of locations. You may hold stock in storage – in several key warehouses and satellite depots. If you have shops, you will have stock on display in your retail outlets. And finally, you may have returned items in transit.
Managing stock you have in storage, stock that is for sale and returns stock is complex at the best of times. But it’s complicated even further if you have a multinational organisation, selling across the world.
Always having the right amount of stock to fulfil customer orders is key. But to maximise your profits, you don’t want to tie up too much of your money in stock. If you scale this up, you can see that the bigger you are, the value of the cash you have tied up in stock will be larger. With overstocking like this, you can’t use access your capital and use it for other purposes and it also costs you more – financially and in terms of space – to store it. For warehouses storing products like food, drink and pharmaceuticals, the danger of having too much stock is that they can go out of date, often at great expense to the business.
Large businesses that operate omnichannel sales benefit from being able to allocate stock according to channel. If you sell in-store, over the phone, via ecommerce and through third-party marketplaces, you will have a wide variety of channels to support. Manually tracking stock across storage locations and channels at this scale is near impossible. With a stock control system, you can stay up to date on the status of orders and ensure that stock is available for all outlets in the right quantities.
Stock Control for Small Operations
When it comes to the consequences of poorly managed stock, you might think that a smaller warehouse business might be less affected than a larger one. After all, it seems logical that smaller businesses will have smaller risks and lower associated costs.
But there is an argument that a smaller business cannot afford to get it wrong as they have less leeway. Small businesses only have a small amount of warehouse space, so must maximise its use and the tolerance for getting the wrong stock levels is far smaller. For example, imagine if you stock ten units of a product, but could have sold 15. While it’s only a small quantity that you haven’t been able to sell – five units – that’s still 50% of your stock for that line. Compare that with a larger company where five items unsold with usual sales of 5,000 and it isn’t so much of a dent in the expected revenue.
If you are a small business, stock control will give you improved forecasting and demand planning. You can be assured that you are carrying stock at the right levels to avoid stockouts and meet customer demand. Stock management can identify your best-selling products and your slow movers, allowing you to rearrange and optimise your warehouse space. This will help speed up picking and improve productivity. With better visibility and control over reordering points, you will be able to fulfil more orders and maximise your warehouse performance.
Solving Stock Control Issues
With NetSuite ERP, forecasting and demand planning is easy. You can track order data and the reporting functionality helps you analyse sales volumes, stock levels and values.
With the NetSuite Advanced Inventory module you can replenish stock according to demand and optimise your replenishment by better predicting reorder points. In this way, you can reduce your stockholding with less risk of not being unable to fulfil orders.
No matter how big or small your business, NetSuite’s stock control provides real-time visibility and control across all your channels and storage locations.
Contact us for more information on stock control for NetSuite.