Stock, or inventory, is an essential component of any business. Good stock management is therefore fundamental to the smooth running of the entire manufacturing, operating, or distribution chain.
When we talk about stock, we’re not just talking about finished products. In fact, stock can be made up of any of the following:
- raw materials,
- supplies,
- packaging, or
- semi-finished products.
These items may be stored on the store floor or in reserve, in a dedicated warehouse (especially in the case of a factory), or at the supplier’s or distributor’s premises.
As with warehouse management, stock management is a key issue. It involves planning and implementing an effective strategy to maximize the company’s profitability.
Efficient stock management means finding the perfect balance between supply and stock rotation. This means having the right quantity of products at the right time.
Poor inventory management can have two major consequences:
- Out-of-stock situations: Just-in-time inventory management can help reduce costs. However, this approach risks disrupting the entire production or operating chain when a product or supply runs out, which can lead to businesses missing out on sales.
- Over-stocking: Holding a large amount of stock can help to cope with an increase in demand. However, this strategy increases fixed costs and ties up capital that could be used for other purposes. What’s more, goods can run the risk of deteriorating or becoming obsolete if they are not used or sold on time.
Managing and controlling stock is an essential part of any company’s strategy, as it helps to improve organization, optimize cash flow and the order cycle, reduce distribution costs, and enhance customer satisfaction.
To manage inventory effectively, it is important to follow a few basic rules:
- Establish a logistics strategy adapted to your business: This must take into account the volume of goods and personnel available, as well as the number of orders to be processed to meet customer expectations.
- Regular stock updates: To know the exact stock situation at any given time, regular updates are necessary. This can be achieved by tracking incoming and outgoing goods, taking inventory on a regular basis, or implementing an automated inventory management system with software.
- Optimizing storage space: An optimized storage environment that limits unnecessary movement and organizes products according to their nature or rotation rate is essential to optimize the performance of the storage area.
