Stock Control and Inventory Management Tips

Fulfilment efficiency and inventory managementBusinesses of all sizes suffer issues with stock control and inventory management. “Shrinkage” accounts for around 1.4% of all sales which includes theft by customers, staff and administrative errors. Whilst we’re focused primarily on the latter, it is important to note that when you trying to grow your business from a relatively small base, attention to your stock levels and how you manage inventory not only affects your ability to grow in terms of your profit or loss, but also in customer satisfaction.

There are some tips to help you reduce ‘shrinkage’ that can greatly help as you look to expand your business if you currently don’t outsource your order fulfilment processes:

  1. Check all stock inwards
    The first focus should always be to check what actually gets delivered against what you have ordered from your supplier. It is so easy to assume that the numbers match up, but from talking to our customers we note that a good 1% to 2% of stock orders are incorrectly packed. If you just assume that you have the correct numbers of products when you add the inventory to your shelves you are liable to be short stocked when you receive a customer order. Another issue is that you might actually have more stock than you need and you won’t know when to reduce prices to move it or order more when you don’t need to.
  2. Store your stock wisely
    It is so easy to just place your stock wherever it fits but this can cause errors when your staff are picking in a hurry. If you have similar products with similar packaging such as the Domori il 70% and the 100% – storing each chocolate next to each other is likely to cause errors as the packaging is almost identical.
  3. Name your products clearly
    If you stock products in different sizes, make sure that any order form you get through your system makes it absolutely clear which size to pack. If you need to alter your packing slips to make it totally clear then do so. You may even want to colour code these slips and match them to a colour label on the individual product packages.
  4. Keep control of Best Before Dates
    If you offer products with Best Before Dates you are obviously liable to hefty fines if you ship out of date products to customers. It is important, therefore, that you create a reminder system for each product line for when each product should have their price lowered ahead of time so you can shift any remaining stock, and again when the product should absolutely be taking off your website.It is also important that you check the Best Before date as you pack each order. Often you will have multiple batches in stock so the dates may be different and you cannot always assume that you are still sending out products from an ‘in date’ batch.
  5. Don’t compound problems
    If you send a customer the wrong products, when you send out another make sure you amend the stock levels of the relevant products. It seems obvious to state, but in the match rush of running an ecommerce business this can be easily over-looked.
  6. Set a minimum stock level
    Each supplier will have different lead times and if you did want to avoid going out of stock you will need to establish how long it normally takes to restock and how long it normally takes for that minimum stock level to run out. Ideally you give yourself a buffer amount when you try and establish how much stock you need to have in reserve to cover the amount of time it takes to restock.This calculation is confused by the issue of having some lines from the one supplier being in greater demand than other lines and that you need to take into account of restocking these less-demanded items now to take advantage of the lower effective transportation cost per unit.
  7. Think about the Wilson EOQ Model
    This is a formula devised by Ford W. Harrison but applied by R. H. Wilson extensively to determine the optimal order size for a given unit of inventory. You can use this website to help you work it out and you can find a more detailed explanation here.
  8. Consider an automated solution
    Our solution is computer operated and is based on barcodes to minimise the picking error rate to almost nothing. It does, however, require the correct use of the barcodes in the first place. If you are working on batches rather than the multiple picking of varied products for a given order then this does reduce the error rate significantly.
  9. Manage returns effectively
    One of the biggest issues when many retailers, certainly in the fashion and electronics markets is the correct handling of returns. There are obviously legal requirements relating to distance selling regulations but if you do have to restock an unwanted item then make sure all your usual labelling systems are still in place. If you do have any stock returned because they are defective then you will also have to ensure that your stock levels aren’t adjusted upwards and that you account for it with your suppliers.
  10. Regular stock checks
    The obvious solution is to carry out regular stock checks. If you have made errors it is better to spot them before you take a customer’s order given that you will have to spend time contacting them if you have spotted an error after order, or restocking if you haven’t. Even if you don’t have time to check your entire stock frequently, do ensure that you at least rotate your stock checking and review the stock levels of a different manufacturer on a regular basis.

There are often many small changes you can make to your inventory management & picking, packing and shipping processes that can have significant impacts on the efficiency and productivity of your business. Take a step back, analyse every set up the ordering and fulfilment processes and establish if any can be improved to minimise fulfilment errors. Doing so can have a noticeable impact on your bottom line and allow you to grow faster.

 

 

 

  • Fahad (Eddie)

    experienced stores where I ordered a product which was listed as being in-stock, but it turned out that it was actually out of stock. These kinds of problems crop up sooner or later for all estores, especially those selling on multiple channels. For the benefit of other estore owners, I found some interesting tips from Cloudways Blog on inventory management of Ecommerce Sites best practices.

  • http://stock.insight360.co.uk/ Amanda Bernier

    Hey,
    Thanks for useful information, great post! Stock Control Inventory Management system software are very beneficial for our business, We can manage our stock in one place, Inventory controls over stock movements and inventory activities.We receive order alert on the real time.Sales reports access sales and inventory report based on real-time data.Stay up to dates with your sales.

  • http://www.peerbits.com/ Stella Robinson

    For any business, management plays a very important role. The broad management section has this inventory part that creates better prospect for the business and needs to be managed with utmost care and expertise. The time was gone when you do the inventory tasks via old machines. Mobile devices replace old machines drastically for inventory management that run an entire inventory control process smoothly.

  • anuja jain

    In this blog i found such an amazing great stock tips I want to invest in stock marketing and i take tips i found nice tips on your blog :)

  • Kate Baking

    If you run/own any form of bakery business I would like to point you in the direction of ‘Baking It’. Not only can you manage your inventory but this is a customisable piece of software for running your whole business.
    Some of its key features are:

    *Design and Cost Cakes & Bakes with an integrated Quote and Order management platform, and all the things in between!

    *Send professional Quotes to your clients via email with your business terms, cake sketches and slicing guides attached.

    *Order Management System with acknowledgement forms & Business Insights.

    Navigate your way around our top tool bar where you will be directed to in depth sections where you can effectively run your baking business all in one place.

    Kitchen: Keep an inventory, shopping list and expenses.
    Recipes: Manage, convert & cost all your recipes.
    Bakery: Accurately cost & manage your bakes.
    3D cakes & sketches: Create images of your cakes
    Business: Manage & organise contacts, orders, tasks & expenses.
    Insights: View you basic stats and more in depth monthly views.

    Take advantage of our free trial and be sure to contact Baking It with any queries you may have.

    Full disclosure – I am the Customer Success Champion from Baking It. If you need any help with our software get in touch via the website. We look forward to seeing you over at Baking It

  • Cathy Moore

    Very Informative post. I have been using http://mobilityecommerce.com/ for inventory management,order management, warehouse management and return management, I am happy with their services but still looking for some more options in other companies. The tips are really helpful and its is simple and easy to understand. Thank you

  • Angela Newnham

    I follow this blog from past few months. I found many informative information in this blog. With the help of this blog I take care all things related to inventory management. It also includes many factors like logitics management, transport management, inventory management and warehouse management. Inventory management system is the supervision of non-capitalized assets (inventory) and stock items. A component of supply chain management, inventory management supervises the flow of goods from manufacturers to warehouses.

  • https://www.cumulations.com/ James Grills

    Hi, I was having this question in my mind that how this big eCommerce companies will be maintaining there stock and inventory without any mistakes and errors. But now after reading your amazing blog around the similar topic my basics around this topic has been cleared now i am able to understand all this. But again it seems to be very easy when i was reading this article but i believe it will be really tough to follow all these steps.

    Thanks a lot for sharing this wonderful article.

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