Controlling inventory: Inventory control methods
November 30, 2023
Market demand is unpredictable, making it difficult for organizations to ensure products are always available when needed and maintain the delicate balance between supply and demand. That’s where inventory control professionals come into play. In the face of a turbulent market, inventory control specialists are essential for ensuring that businesses run smoothly. Read on to learn more about the roles and responsibilities of inventory control specialists, the best practices professionals leverage in the field today, and how you can make your next career move in inventory control. Inventory control, also referred to as stock control, encompasses all the systems and procedures used for managing inventory items in an organization’s warehouse. Its primary aim is to track the flow and storage of goods within the warehouse to make sure there’s enough supply of items in optimal condition to meet demand. By implementing an effective inventory control system, teams are better equipped to meet customer needs and maximize their profits. The inventory control process is a component of inventory management as a whole. The larger goal of successful inventory management involves supervising, regulating, and arranging the company’s inventory or goods it keeps in stock — tracking the quantity, location, and condition of different items within the warehouse. Improved inventory management is an increasingly important focus for teams across industries today, with Reliant Funding reporting that 34% of businesses struggle to keep track of unavailable products and avoid delayed shipments. Addressing this issue with advanced inventory control is key to promoting customer satisfaction and ultimately improving long-term business outcomes.What is inventory control?
Inventory control vs. inventory management
What do inventory control professionals do?
As an inventory control specialist, you’re responsible for overseeing and managing a company’s stock of goods and products. Some of the primary tasks include accurately tracking, organizing, and optimizing inventory levels while ensuring items are not out of stock. An inventory control specialist must also reduce excess inventory and maintain accurate records of the inventory on hand.This is a role with great responsibility and oversight and one that is critical to helping teams achieve more efficient operations and cost-effective inventory management.
Some of the core responsibilities of an inventory control professional include:
- Continuously monitoring and updating inventory records, keeping track of both stock levels and item availability.
- Managing stock replenishment to prevent shortages or overstock situations.
- Inspecting and evaluating the quality of inventory items to ensure product integrity.
- Analyzing inventory data and trends to optimize stock levels, reducing carrying costs.
- Coordinating with suppliers to promote timely deliveries and resolve order discrepancies.
5 key inventory control methods to implement
Whether you’re an experienced professional taking steps to improve your results, or just beginning your career in the field, it’s important to understand the different strategies for effective inventory control.
1. ABC analysis
Use an ABC analysis to categorize items based on their importance, cost, and sales volume. This is an effective technique to help you decide how much of each item to stock and sell. To use this method, categorize your inventory into three groups:
- A — high-value items.
- B — moderate-value items.
- C — low-value items.
Allocate more of your resources and attention to the A category, as these commodities are likely critical to your business. With B and C items, you can consider more flexible inventory policies.
2. Just-in-time (JIT) inventory
With this management strategy, inventory control professionals make sure that the company receives goods and materials as close to when they’re needed as possible. This is meant to minimize the storage of excess inventory and its associated costs.
While adopting JIT principles, be sure to maintain close relationships with reliable suppliers to promote timely deliveries. It’s also beneficial to regularly review demand forecasts and adjust orders accordingly.
3. Inventory management software
A powerful digital tool like inventory management software can enable you to track, organize, and optimize your team’s inventory of items more effectively. These solutions are necessary when you consider that human error is the top problem in 46% of all warehouses, and 62% of warehouse managers cite this as the main cause of inventory fulfillment issues, according to a report from Industry Today.
Look for software programs that offer real-time visibility into inventory levels, sales-trend tracking, and report-generating capabilities, so you’re equipped for informed decision-making.
4. Reorder points and safety stock levels
Determine reorder points for each item by considering the associated lead times and demand variability. By simultaneously maintaining a safety stock, you can create a buffer against unexpected fluctuations in demand or supply disruptions. This includes continuing to review established points and adjusting levels as needed.
5. Audits and cycle counts
To validate the accuracy of your inventory, schedule periodic audits or cycle counts (i.e., systematically check the physical inventory on hand to ensure that it matches the recorded inventory levels in the company’s records). You might employ the use of barcode scanners or radio-frequency identification (RFID) technology for a more efficient process.
Throughout these inventory checks, be sure to address any discrepancies quickly and implement process improvements to prevent future errors from occurring.
Tips for improving your inventory control processes
Inventory control specialists play a vital role in minimizing carrying costs, optimizing inventory management, and ensuring product availability — thus enhancing organizational efficiency and profitability while meeting customer demands.
Here are a few practical tips to enhance your inventory control processes:
- Develop a comprehensive plan and execute it continuously: Establish an inventory control plan that covers everything from production and sales to the removal of inventory from the database. As you implement your plan, make sure to update it as needed while staying flexible amid changing circ*mstances.
- Prioritize critical stock: Identify what items are most important to your business and ensure the availability of these goods to prevent major disruptions.
- Review your shipments thoroughly: To avoid costly inventory losses, take your time and carefully inspect items upon receipt.
- Choose a scalable system: With the eventual goal of business growth in mind, it’s important to select a scalable inventory control system (e.g., NetSuite, TradeGecko, or SAP Inventory Management) that’s capable of growing alongside your business. It’s also beneficial to opt for a solution that provides data analytics that enables improved decision-making.
- Prioritize process improvement: Emerging inventory control technology can be a powerful and exciting tool to enhance the system you currently have in place. However, it’s critical to establish an efficient approach before implementing new technology, as software alone won’t be able to fix or overcome inadequate processes.
As you make the next move in your career, these techniques can help you establish more robust inventory control processes that help streamline operations, reduce costs, and ensure product availability.
Are inventory control specialists in demand?
There are close to 250,000 inventory control specialists working in the U.S. today. While salaries have risen 38% in this field, today, specialists have an average salary of $34,507. Those seeking an entry point into the logistics and manufacturing field can begin their career as an inventory control specialist, which has over 107,000 openings and a projected career growth through 2028.
Why are we seeing a rise in demand and salaries for inventory control professionals?
- Businesses are looking to boost their supply chain operations to help reduce costs, improve efficiency, and enhance customer satisfaction.
- An increased focus on supply chain efficiency has amplified the need for skilled inventory control specialists who can optimize inventory levels, reduce wastage, and prevent stockouts.
- Supply chains today are more complex and interconnected than ever before and teams need professionals who can navigate these landscapes effectively.
- Organizations are turning to advanced technologies like inventory management software and data analytics, enabling specialists to make data-driven inventory decisions for better results.
It’s important to note that emerging technologies like generative AI (artificial intelligence) and machine learning are already impacting the inventory control process, helping to streamline such areas as demand forecasting, realt-time tracking, and planning, to name a few. Therefore, those aiming for a competitive advantage in logistics and manufacturing can benefit from an understanding of these technologies and how to best implement them.
Overall, inventory control specialists play an essential role in modern supply chain management and business operations. This puts their skills in high demand across a wide range of industries, from manufacturing, retail, and e-commerce to healthcare, transportation, and logistics.
Make your next career move as an inventory control specialist
In today’s dynamic business landscape, inventory control specialists are key to warehouse success — playing an integral role in helping organizations reach a new level of productivity, cost-efficiency, and streamlined operations. If you’re ready to find your next role in inventory control, ResourceMFG is here to help.
