E-commerce business trend has increased over the last five years, particularly during the pandemic covid-19. The increasing trend in E-commerce has led to the importance of the supply chain management process. In the previous year, we have seen a lot of port congestion, container shortages, and raw material prices fluctuating rapidly. Nowadays, companies are trying to improve their supply chain to avoid distortion in the supply chain process. E-commerce business efficiency is highly dependent upon the supply chain process of the business. One of the most important factors of the supply chain process is inventory control and inventory management.
Inventory control management is crucial for any E-commerce business, especially those with multiple warehousing facilities. E-commerce businesses, retailers, and distribution fulfilment centres have to do inventory management according to the demand of their customers. To do inventory control management, they have a lot of tasks and processes to follow. Many companies are using the inventory control system to ensure their inventory levels. Inventory control is different from inventory management. The mission of both of them revolves around the inventory of businesses.
In today’s blog, we will discuss what inventory control is and the difference between inventory control and inventory management. We will also discuss inventory control systems, challenges in inventory control, and the last tips for better inventory control. This blog will be very beneficial for businesses, especially e-commerce businesses. Companies are very keen to know in detail about inventory control management, as it can help them in increasing profits.
What is Inventory Control
Inventory control is the process of managing the stock of the company. Inventory control starts from when they enter the warehouse until they are dispatched for delivery to the final customer. Inventory control can also be referred to as controlling the stock the company possesses either in its warehouse. Or are available in warehousing fulfilment centres hired by the business. Inventory control aims to ensure that the industry has the ideal level of inventory. And to ensure that no excessive inventory is blocking the companies fund. The inventory control processes can be automated to make the complete supply chain process smooth. The inventory control process must include the following
- A Barcode system can help manage inventory monitoring easy to handle
- An item-wise detailed record is very important for inventory management control.
- Order dispatched, and sales records will help in evaluating the inventory levels
- Stock purchase records will help the company in inventory control
- Detail of warehouse location is very important in inventory control
- A report for the inventory level should be updated in real-time.
Inventory control will always lead to better customer satisfaction, which will lead to better profitability for the company.
Difference between Inventory Control VS Inventory Management
Inventory control and inventory management both deal with inventory, but these both are different in nature. Inventory control starts from the point when the inventory physically enters the warehouse. The role of inventory control will last till the product is dispatched for delivery to the customer. The purpose of the inventory control is to have a record of stock available in the company’s own and rented warehousing. Inventory control ensures an optimal level of inventory without any excessive blockage of the fund in stock.
On the other hand, inventory management starts from the time the company forecasts the demand for the product. Inventory management is focused on deciding when to reorder the stock and in which quantity. The purpose of inventory control and inventory management is the same, to ensure the optimal level of inventory. Both inventory management and inventory control support each other in attaining the company’s profitability goals.
Benefits of Inventory Control:
There are many benefits of practicing inventory control, but the major benefits of inventory management control are as follows:
1. Optimal Inventory:
The first and foremost benefit of inventory control is maintaining the optimal inventory level. The optimal inventory level ensures that the customer demand is always met and the product is available in stock.
2. Lowers Investment in Stock
The second benefit of inventory control is saving from the optimal stock level. By ensuring better inventory control, a company reduces its risk of blocking excessive investment in excessive stocks above the requirement.
3. Better Quality Product
The third major benefit of inventory control is the better quality of the product. When the company has the optimal stock level, it ensures that the product is dispatched within its expiry date. This helps the company maintain the quality of their product for their customers.
4. Controlling Human error
Inventory control systems in a company help reduce human error in maintaining the record of the stock level. This will not only help inaccurate stock level records but also in maintaining the optimal level stock. These all benefits will lead to better sales of the company and, in return, better profitability and customer satisfaction.
What are the challenges of efficient Inventory Control?
Although inventory control plays a vital role in maintaining optimal stock levels of any company, but still, there are many challenges in maintaining inventory control faced by companies, especially E-commerce businesses.
1. Need a lot of time and resources to manage Inventory control
The foremost challenge of maintaining inventory control in any company is to allocate time and resources for this purpose. The best way to overcome this challenge is to allocate sufficient funds for inventory control in the company budget. In addition, properly trained staff can help in reducing the time involved in inventory control management.
2. Challenge of Human error in inventory control
Inventory control is very efficient in maintaining the optimal level of stocks in any company, but the issue of human error can be a challenge. The solution to this challenge of inventory control is to automate the inventory control procedures through inventory control systems.
3. Inventory visibility:
Inventory visibility can be challenge while maintaining inventory control in any company. Many companies have multiple warehouses in multiple countries, which can be challenging. Some companies use DDP delivery services or trans freight logistics, which can also be a challenge in inventory control. This can be overcome through automated inventory management control.
How to improve Inventory Control:
Nowadays, companies are focusing on how to improve their inventory control methods; the purpose is to maintain optimal stocks levels. There are a lot of ways to improve inventory control, but the most important factors are as follows:
Real-time tracking system
The foremost important way to improve inventory control in any business is to ensure real-time data of stock availability. Real-time data of stock and order dispatch will help the company in maintaining the optimal level of stocks. Real-time data can help in eliminating any disruptions in maintaining inventory control management
Inventory Control System
The inventory control system will help the company in automating inventory control. An inventory control system will eliminate the risk of human error in maintaining the inventory levels. An inventory control system can also help a company in increasing the visibility of stock at multiple warehouses and in multiple countries.
Regular audit
Regular audits are a very important tool in overcoming the challenge of human error in any company. Regular audits can also help in checking if there is a theft. A regular audit can also help identify any mistakes in the inventory control methods. Spillage or damage to the product can be control through regular audits.
Conclusion:
Inventory control and inventory management both are different, but have the same objective of attaining the optimal level of stock in any company. Inventory control is one of the most important factors for maintaining the optimal level of stock in any company. Most of the companies are improving their inventory control procedure to reduce their cost of business and improve customer satisfaction. There are a lot of ways to improve inventory control in any company, the best way is to use the inventory control system. This will help the business in attaining the real-time data of stock, available in different warehouses. It will also help in eliminating any human error and reduce the time consumed. The optimal level attained by the companies in inventory can help any business in increasing profitability and customer satisfaction. Inventory control is the key to success for any E-commerce business.
