There are many different variables that affect how stock is treated. Just because it’s held in the same warehouse certainly doesn’t mean it gets managed the same way.
I mean it all depends really. The target is to have the product available when you need to use it, either for production or dispatch, but it also depends on a multitude of differing variables. If you can work on a ‘just in time’ basis, that’s great. However, if the product is coming from China, then there’s no such thing as ‘just in time’ as there are always additional variables holding up delivery like pandemics and wars, which escalate things enormously.
When you’re managing stock, the main elements are the procurement side of things and general stock control management. Using a business management system to consolidate all aspects of stock management, including inventory, lead time, manufacturing, dispatch, purchasing, product tracking etc, will simplify your operations, integrate all company departments and provide real-time data to management, procurement and sales (so decisions can be made quickly and easily).
It is very hard to use the word ‘general’ when it comes to stock control, because stock can deviate from one item to the next and real efficiencies can be made by being able to differentiate between certain products.
By conducting stock takes using our Herbst kiosks on the production floor, everything is accounted for when moved. Our business management system is able to handle the constant swaps and changes of stock extremely well, automatically recording and storing all information in your database.
You also have the ability to see what has been sitting in your stock for a long period of time and whether or not it’s costing you money. Maybe your business has perishable goods? Our integrated solutions will allow you to create promotions orientated around products your customers usually buy.
This business intelligence is all about using our Herbst business management system to facilitate stock control especially in cases where your business needs to manage a large amount of stock items, from 1 – 50,000. Generally speaking, there are many people involved in stock control from several different departments e.g., someone from procurement, someone moving it, someone storing it. All the people who are involved should be using the same system which will present correct visible information in real-time, and although your business may have good procedures and practices in place, if you are not using a fully integrated system, you’re making life difficult for yourself.
As a person responsible for purchasing stock, you need to have the facility to see historical information in a palliative form orientated around future forecasting. If you work out algorithms, formulas and use advanced mathematics, you still can’t take into consideration all the historical data or variables needed to make an executive decision.
At Herbst, we have a specialised module which comes standard with our Herbst insight called ‘purchasing wizard’. This wizard will create a purchase quotation as it has access to your full product ledger and will allow you to select a certain amount of products from within. It gives an estimate, however allows an individual to make a decision through dashboards meaning you can make an effective decision and the final judgment call.
Within the wizard, you can ‘Smart Select’ stock items by supplier, product group, individually or can use a variable within the stock ledger called ‘free stock’, allowing you to select a certain category of products however you wish, and potentially automating a recommendation to the quantity that you should fulfil. You can see trends, behaviour patterns, outstanding sales orders and previous sales history and can decide whether your view will display data for the year, month or week. You can even modify data (if needed) before actually creating an order or request for quotation.
Using a bulk entry functionality, you can automate the whole procedure allowing you to write a programme where a smart algorithm automatically looks at your stock ledger and makes a recommendation for the quantity you wish to order for that product based on historical data. This feature is very bespoke and customised specifically for each individual organisation. Although the wizard facilitates decision making, sometimes no matter how good an algorithm is, there’s still nothing like the human brain!
If you have a lot of stock and that stock has a lot of value, then you need a system! Sure you can get away without one, but the return on investment of having one is the difference between a profitable company and an unprofitable one.
In today’s news, the experts from ‘Real business’ are now warning about having ‘just-in-case’ (JIC) stock – this is a stock management process that reduces costs by lowering the quantity of goods you keep on hand in your business. They are telling you to ‘think of JIC as insurance against being unable to meet expected demand due to a sudden spike in sales, supplier issues, or other issues related to fulfilling customer orders’. They conclude saying that ‘excess stock is one of the highest cost drags on their bottom line’… (Maifreni. S, Oct ’22).
This is not a double-sided coin though. There are so many different variables that come into effect as the world moves forward and life being what it is. These days some companies are treating stock as a commodity as their product could be sitting for over a year and the value has now increased by 50%. If we look at the copper industry, companies that bought too much copper two years ago will be laughing today, as the price has now trippled alongside everything else. This is not to say prices won’t go down again, it’s just showing that with stock there are many variables to consider, however, at the end of the day, it’s the senior management decision which influences stock levels.
One of the great things about our Herbst stock control management system is that it’s a fully integrated system which handles purchases, deliveries, location, transfers, manufacturing, dispatch, stock adjustments for perishable goods and not only all of the above, but it manages all accounts in the background. With everything in one integrated system, risk of duplication (even triplication!) is removed and we have real-time value of stock. Management teams have all the information they require (as do sales and procurement), at the touch of a button which is all part and parcel of the whole system.
To have an inventory system that isn’t integrated with everything else in your business in this day and age, leaves life more complicated. With our fully integrated stock control system you are working with gravity, however if you have a standalone system and are constantly using excel and other spreadsheets, you are working against gravity and life is going to be more difficult.
You are doing yourself no favours and you’re certainly not doing anybody else any favours within the organisation (except perhaps your competitors!)
To find out more information on stock control click here
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