Stock control system
Stock control system. It is of vital importance the control of inventories in all businesses, because their lack of control lends not only to theft, but also to waste, which can have a strong impact on profitability.
Once you have decided to optimize the management of your inventory through a control system, it is important that before starting the process you know the steps that are necessary to carry out the implementation successfully.
Organize and complement the information of your inventories
This step will allow you to have a more real vision of the situation of your inventories. It is very important to have an updated and refined catalog of your products. Get rid of products you no longer handle in your catalog. Also, it is very important to have them properly classified in families and / or groups of articles and related to each of your suppliers. All this to have a good information base to carry out the following steps.
Sort your products in at least 3 categories
Classify it into 3 main categories. These categories will give you a broader picture of the type of products you have and how each one should be managed. The categories in which you can classify them are the following:
- High Turnover Products. This type of product has a constant sale level throughout the year. Due to this, at least 6 purchases per year are placed to refill it.
- Temporality Products. Includes products that do not have a constant level of sales but that can increase or decrease their turnover.
- Special products or on request. This classification covers the products that can be said to be eventual sales due to some extraordinary requisition, in this case they are only ordered when the order is placed by the client, they are products that do not suit you.
The following steps are recommended to be carried out only with your products identified as high rotation, and with some adjustments for temporary products.
Set the inventory days of your products
How long do you take to have the product available for your client?
To define this data, you have to consider two important factors:
- Delivery time of the supplier. This concept refers to the time that takes the product to arrive at your warehouse and to be ready to be offered to the customer. This data can be obtained easily by checking the delivery history of the products by your supplier.
- Frequency of purchase. This concept refers to how many days you can or want to be placing a purchase order to a supplier for a product. To obtain this information, check in your sales history how long it takes to sell on average the product you are offering for each purchase made, so you can define what amount is to be purchased. Considering the dimensions, costs and rotation of the product you can decide to buy more frequently or less frequently.
Obtaining this data, you can define the days of inventories.
Calculate maximums, minimums and reorder points
Based on the data calculated in the previous step you can define your maximum, minimum and reorder points.
- Calculate the maximum stock of a product. Take as a reference the 60 days of sales in units of that product during the period of greatest demand.
- Calculate the minimum stock of a product. Take as reference the 60 days of sales in units of that product during the period of least demand.
- Define the point of re-order, the level of stocks in which it is necessary to place an order. Obtain the average of your maximum and your minimum.
Also, it is important to carefully consider the maximum level to avoid an excess of inventory.
Compare the information obtained from your current inventories
It is essential that the information of your inventories that your system is providing you is correct. When analyzing the data, identify all those products that are in a unit level greater than the maximum calculated. This in order that you can make decisions such as making a sales strategy or promotion.
Monitor your inventories in real time
Plan a purchase each time a product reaches the minimum level or the point of re-order. In this process, the role of your purchasing team is very important since each product has its own behavior. they must be prepared in terms of demand and turnover, to make important decisions to make the purchase more efficient.
Constant update of information
The tendencies and situations of the products tend to change. It is important to have periodic reviews of the information and constantly update the minimum and maximum levels that the company has. Preferably, do this analysis annually, or if the industry and market in which your business performs require it. Make sure you have reliable information to make all the important decisions.
Remember that to be able to successfully carry out this strategy you must have catalogs of refined products, reliable information of your stocks, purchases and sales of your articles and an accessible, flexible and easy maintenance of this information so that you can do it proactively. Do not lose sight of the fact that the monitoring the inventory is the key to its success.
I recommend you approach companies that can provide them as CorpoNet with SAP Business One.