A Comprehensive Guide to Inventory Control Management: Benefits, Challenges, and Best Practices

What is the Inventory Control Process?

Inventory control is the process of managing and tracking the inventory levels, orders, sales, and deliveries of a business. It can involve manual or automated processes to ensure that the right amount of stock is available at all times, while also keeping costs low by preventing over-ordering or under-ordering. The goal of effective inventory control is to maintain cost-effective levels of stock, avoid stock shortages or surpluses, and maximize customer satisfaction with on-time orders. Automated inventory control systems are increasingly used for their ability to track stock in real time, plan for future needs based on historical data, and quickly generate reports.

Types of Inventory Control Systems

Inventory control systems are a set of technologies, processes, and procedures used to monitor and manage the ordering, storage, and use of materials within an organization or business. They help companies keep track of their inventory in real-time, make sure it is available when needed, and also help monitor inventory cost and quality control.

There are three main types of inventory control systems: manual record keeping, automated inventory management systems, and enterprise resource planning (ERP) software. Manual record keeping involves tracking inventory by hand-written records or spreadsheets while automated systems use computer hardware and software to track stock levels. ERP software integrates all aspects of a company’s operations into a single system that allows for the automation of many processes such as order management, production scheduling, supply chain management, and more.

Benefits of Inventory Control Systems 

Improved Accuracy and Productivity 

A proper inventory control system helps improve accuracy and productivity by managing and tracking the movement of goods and products. It accurately records product information, such as quantity, availability, location, and price, allowing for better forecasting of inventory needs. By automating processes like stock counting and ordering, it eliminates manual errors and reduces the time needed to manage inventory. This ultimately leads to more accurate record-keeping, improved efficiency in operations, and increased cost savings.

Reduce Costs and Overstocking/Understocking Issues 

An inventory control system helps reduce costs and overstocking/understocking issues by allowing for more accurate tracking and forecasting of inventory needs. These control techniques can help a business achieve its goal of holding the least amount of inventory necessary to meet customer demand while increasing inventory turnover. Automated processes (stock counting, ordering, invoicing, etc.) help to optimize inventory levels and eliminate manual errors, while regular reporting provides visibility into the performance of current stock levels. This information can be used to optimize purchasing decisions, reducing the chance of costly excess inventory or understocking issues. Additionally, inventory control systems can help identify waste and inefficiencies in operations.

Data and Supply Chain Visibility with Real-Time Updates & Tracking Capabilities

An inventory control system increases data visibility with real-time updates and tracking capabilities. Data is automatically updated when goods are received and shipped, providing an accurate overview of current stock levels and inventory availability. Additionally, tracking capabilities enable the monitoring of product movements across multiple locations in real time. This provides greater transparency into the performance of the supply chain, allowing for faster decision-making and improved customer service.

Increased Customer Satisfaction & Better Business Decisions 

An effective inventory control system helps achieve customer satisfaction by having the right products available in the right quantity at the right time. Good stock control also helps businesses make better decisions about production, when to purchase inventory, and sales, and helps ensure they don't carry too much inventory relative to customer demand. Inventory control is the process of managing the availability, storage, and use of products in a business. A periodic inventory system requires a physical count of stock at certain intervals. A perpetual inventory system keeps a continuous record of stock on hand. Inventory control requires careful management of ordering and stocking levels, accurate tracking of stock, and efficient use of resources. 

More Efficient Warehouse Operations with Optimized Inventory Control Methods

An inventory control system makes warehouse operations more efficient by automating processes such as stock counting, ordering, and invoicing. It also provides visibility into current stock levels and product movements across multiple locations in real time. This helps to ensure that the right products are in the right place at the right time, allowing for faster order fulfillment and improved customer service. Additionally, it eliminates manual errors, eliminates redundant tasks and reduces wasted effort, ultimately leading to a more efficient warehouse operation.

Major Inventory Control Challenges

Manual Processes Can Wreak Havoc with Your Inventory

Manual processes for inventory control can be extremely difficult and time-consuming. Without automation, it is difficult to keep track of all the changes in inventory data, such as stock levels, ordering, and pricing. Manual processes are prone to errors and can be difficult to scale as inventory needs increase. In addition, without real-time updates, manual processes are often not as efficient as automated solutions, making it difficult to ensure accurate inventory control.

Inventory Control is Important, TOO Important to Rely on Outdated Technology

In addition to inefficient and error-prone manual processes, older systems may lack the capabilities to track items in real-time. The use of outdated technology can also result in slow response times, difficulty accessing data, and siloed information. To overcome these challenges, organizations must invest in modern and efficient technologies that enable them to accurately track and manage inventory, while also providing visibility into their supply chains.

Communication Breakdowns are Significant Challenges of Inventory Control

Without accurate information and efficient communication, it can be difficult to know when to restock or replenish items, leading to inventory shortages or overstock. Poor communication can also lead to incorrect orders, delayed shipments, and other issues that can disrupt the inventory process. To avoid this, businesses must ensure that communication between departments is clear, concise, and up-to-date, to effectively manage and maintain inventory control.

Disorganized Systems Make Inventory Control Impossible to Fully Achieve

Disorganized systems can be a major challenge to maintaining inventory control. With no clear structure in place, it can be difficult to track inventory levels, locations, and to know when items need to be re-ordered. A lack of accurate tracking can lead to overstocking or stock-outs, both of which can create costly problems for businesses. To ensure proper inventory control, it’s important to create and maintain an organized system that can easily be managed and updated.

Different Types Of Inventory Control Software Solutions 

Warehouse Inventory Control Software Solutions

Warehouse inventory management software solutions provide businesses with the tools they need to effectively manage their inventory. These solutions allow businesses to track stock levels, optimize order fulfillment, automate replenishment, and analyze data for insights into inventory performance. Warehouse inventory control software helps businesses save time and money by streamlining the inventory process.

Enterprise Resource Planning (ERP) Software Solutions

Enterprise resource planning (ERP) software solutions provide businesses with the tools they need to manage their operations effectively. These solutions allow companies to integrate and streamline their processes, from accounting and finance to human resources and operations. ERP software helps businesses save time and money by simplifying the management of their operations.

Cloud-Based Warehouse Management Systems (WMS)

Cloud-based warehouse management systems (WMS) provide businesses with the tools they need to effectively manage their warehouse operations. These solutions allow businesses to automate and optimize their processes, from inventory control to order fulfillment. Cloud-based WMS helps businesses save time and money by streamlining their warehouse operations.

Radio Frequency Identification (RFID) Technology

Radio frequency identification (RFID) technology is a cost-effective solution for businesses to track their inventory in real time. RFID technology uses radio waves to transmit data from tags attached to items, helping businesses automate the identification, tracking, and management of their inventory. By automating their processes, businesses can save time and money with RFID technology.

Barcode Scanning Technologies

Barcode scanning technologies are an efficient and cost-effective solution for businesses to track and manage their inventory. This technology uses scanners to read barcodes on items, helping businesses automate the identification, tracking, and management of their inventory. Barcode scanning technologies help businesses save time and money by streamlining their processes.

Automated Data Collection (ADC)

Automated data collection (ADC) is a technology used by businesses to collect data in real time from various sources. ADC technology uses sensors to detect and collect data from items, helping businesses automate the identification, tracking, and management of their inventory. ADC helps businesses save time and money by streamlining their processes.

Automatic Identification and Data Capture (AIDC)

Automatic identification and data capture (AIDC) is a technology used by businesses to automate the identification, tracking, and management of their inventory. AIDC technology uses scanners, barcodes, and RFID tags to collect data from items, helping businesses save time and money by streamlining their processes.

Mobile Devices/Mobile Computing Technology

Mobile devices/mobile computing technology is a cost-effective solution for businesses to manage their operations on the go. This technology uses smartphones, tablets, and other devices to access data and applications from anywhere, helping businesses automate their processes. Mobile devices/mobile computing technology helps businesses save time and money by streamlining their operations.

Steps for Implementing an Inventory Control System For Your Business 

Analyze Existing Processes to Identify Areas for Improvement or Automation

A business should analyze existing processes to identify areas for improvement or automation. This can be done by collecting and analyzing data to identify areas where processes can be simplified or automated, determining which tasks can be outsourced or automated, and evaluating how technology can be used to improve efficiency. Doing so can help the business reduce costs, improve customer service, and increase profitability.

Select a System to Control Inventory that Suits Your Needs

A business should select the right type of inventory control system that suits its needs. This can be done by assessing the business’s current inventory needs and processes, researching different inventory control systems, and comparing features and costs to determine which system best meets the business’s needs. This will help the business stay organized and ensure that the right amount of inventory is available at the right time.

Train Employees in Using the New Inventory Control Management System

To train employees how to use a new inventory software control system, the business should provide clear instructions and demonstrations, create a user manual and other training materials, and offer support and guidance as needed. It is also important to give employees time to practice using the system and to provide feedback so that any issues can be addressed. Doing so will help the employees gain confidence in the system and ensure successful implementation.

Monitoring Usage and Performance of the New System is a Critical Control Technique

To monitor the usage and performance of an inventory control system, the business should regularly review reports and data, track user activity, and assess key performance metrics. This will help the business identify possible issues and areas for improvement, and ensure the system is being used effectively. Doing so will help the business optimize the system and maximize its benefits.

Adjust Settings as Needed

To adjust settings as needed, the business should review user feedback and data, assess the impact of any changes, and make necessary adjustments. This will help the business ensure that the settings are optimized for the business’s needs and that the system is running as efficiently as possible. Doing so will help the business get the most out of its inventory control system.

Explore Options for Expanding the Use of Your Current System

To explore options for expanding the use of your current system, the business should research new features and capabilities, determine if they are compatible with the existing system, and assess the cost and potential benefits of implementing them. Doing so will help the business get the most out of its current system and ensure that it meets its evolving needs.

Advantages Of Using An Inventory Control Management System For Small Businesses

Process of Inventory Control Saves Money with Improved Accuracy & Fewer Errors

An inventory control system helps to improve accuracy and reduce errors by tracking the movement of goods and materials, monitoring stock levels, and providing real-time visibility into inventory on hand. It also helps to streamline processes and optimize workflow, resulting in more efficient stock replenishment and better inventory management. Additionally, it can generate automatic alerts for low stock levels and provide reporting capabilities to help businesses better manage their inventory and maximize profits.

Enjoy Easier Tracking and Auditing Capabilities

Control over your inventory enables easier tracking and auditing capabilities by providing real-time updates on stock levels, inbound and outbound shipments, and stock location. It also records and stores detailed information, such as product serial numbers, expiration dates, and lot numbers, to help businesses keep a complete inventory audit trail. This helps to prevent errors, reduce theft, and ensure accurate reporting for compliance purposes.

Effective Inventory Control Best Practices Help Streamline Workflow Processes

An inventory control system streamlines workflow processes by providing automated alerts for low stock levels, generating automated purchase orders, and helping to optimize order fulfillment. It can also help to reduce labor costs by automating manual processes, reducing the need for manual data entry, and enabling more efficient inventory management. This ultimately helps businesses to save time and money, while ensuring accurate inventory tracking and improved customer satisfaction.

Cloud-Based Storage Means You Can Manage Inventory Anytime, Anywhere

An inventory control system is accessible anytime, anywhere due to cloud-based storage. This allows businesses to access all aspects of inventory records and data from any device with an internet connection, enabling real-time visibility of stock levels and inventory movements. Additionally, cloud-based storage ensures data is secure and backed up, allowing businesses to easily access their inventory information whenever and wherever they need it.

Real-time Information Access Informs Inventory Decision-Making

An inventory control system provides effective decision-making via real-time information access. By providing up-to-date data on inventory items and movements, businesses can make informed decisions about when to order more stock, when to restock shelves, and how to optimize their supply chain. This allows them to maximize their profits and ensure that customers always have access to the products they need.

Provide Better Customer Service Through Accurate Order Fulfillment

An inventory control system improves customer service through accurate order fulfillment. By providing real-time visibility into stock levels and inventory movements, businesses can ensure that orders are fulfilled quickly and accurately. This helps to reduce wait times and improve customer satisfaction, resulting in increased sales and customer loyalty.

Improved Team Collaboration Helps Everyone in Your Company

A system for controlling a business's inventory improves team collaboration by automating tasks and providing shared access to inventory data. This allows teams to work together more efficiently, by sharing data and insights in real time. Additionally, automated tasks help to streamline processes, ensuring that inventory management tasks are completed quickly and accurately.

Automated Stock-Level Alerts Ensure Enhanced Security

A physical inventory control system enhances security by providing automated stock-level alerts. By keeping track of stock levels in real-time, businesses can be alerted when stock levels are running low, protecting against theft and loss. This helps to ensure that stock levels are always accurate and up-to-date, resulting in improved efficiency and more secure operations.

Never Wonder About Your Inventory Again with SkuNexus

For eCommerce brands of any size, an array of challenges exist at the intersection of inventory, order management, and warehouse fulfillment, and even the slightest disorganization has the potential to devolve into chaos. To counter this, the establishment and maintenance of an inventory control system is mission-critical.

SkuNexus offers a suite of powerful tools that can help eCommerce companies identify any inefficiencies in their processes and maintain tight inventory control. Our integrations with major eCommerce platforms automatically synchronize product data and inventory levels across channels, so companies can ensure accurate and up-to-date information is available at all times. With these tools, merchants can also gain insight into their product performance and make informed decisions about their inventory. 

At SkuNexus, control is at the center of the management software solutions we design. Helping eCommerce businesses take, and keep, control over all their backend operations is a core element of what we do. If you would like to learn more about how we can help your business optimize its inventory control and reap a host of other benefits, please contact our team to schedule a thorough product demo.