When it comes to stock levels, manufacturing businesses face a double-edged sword. Keeping a high volume of parts and products in stock means there’s little chance of running out of an item that could severely delay or halt the production process. This helps to keep costs down, as expensive emergency supplies are not required. While it may seem like the most logical option, it isn’t as simple as it sounds.
An extensive store of stock ties up your finances and uses up your resources like warehouse space, for example. Instead, it’s much more beneficial for businesses to strike the balance between having the stock they need and freeing up their finances — this is where stock control comes into play.
What is stock control?
Stock control is a procedure carried out to ensure the optimum levels of stock are maintained, ensuring production and customer demands are met while minimising the cost of holding stock. It’s a process adopted by almost every manufacturer in some form. Larger businesses may have the capital to invest in specialist software to streamline processes, while SMEs may largely rely on their own internal systems. Spreadsheets are a popular management system in smaller businesses yet over time, they prove ineffective as your business grows. Additional suppliers and more complicated manufacturing processes can quickly reveal flaws in spreadsheet systems, as the data becomes more complicated and difficult to work with. At this point, a more efficient solution is required: a stock control system.
Benefits of stock control & stock control systems
At Kerridge Commercial Systems, our stock control capabilities are built into our K8 Manufacturing ERP software. Our solution — and stock control in general — offers numerous benefits, as I’ll explain below:
Better cash flow
As I’ve already briefly mentioned, holding an excessive amount of stock can lock up your cash. Whether it’s individual parts or the end-products, more stock means more space is needed to store it, which could result in rising warehouse costs. Insurance costs could also rise, as the stock will be of a higher total value. Likewise, tying your money up in stock limits the available finances you have to react to market changes. New developments may arise that your business could benefit from yet, because of your high stock levels, you’re unable to commit financially. Not only does this limit your potential for expansion and the service you deliver to customers, you could also be giving your competitors an edge. Investing in stock control can reverse this. By avoiding over-stocking, you can improve your cash flow and give your business greater financial freedom to seize opportunities as they arise.
Keep stock fresh
You’ve got high stock levels — but what if the market changes? Manufacturing isn’t stationary — a look over the past few years will tell as much, with the arrival of new manufacturing techniques like 3D printing. What happens if the products you’re stocking go out-of-date or become obsolete? Essentially, you’re left with products with little market value, wasting your business’ time and money. Implementing effective stock control can help to avoid this, as you’ll only stock the items you’ll need for a foreseeable timeframe. This allows you to be more reactive to new products, helping to keep your product offering fresh.
Improve product offering
You’ve got thousands of parts and products stored up ready for the orders to flood in — but they don’t. Despite forecasts, the product isn’t performing as well as you had expected. By using intuitive stock control software, you can establish how a particular product performs. This business intelligence can then be used to inform future decisions, allowing your business to better their product offering which will ultimately drive sales.
Keep track of stock across multiple locations
As I’ve already mentioned, stock control software is most beneficial in growing businesses. If your business spans multiple locations, monitoring stock levels can become trickier, so you’ll need a solution that’s more than up for the job. The stock control feature of our ERP software allows a 360-degree view of stock at each of your locations through one central management system. This allows for greater monitoring capabilities, enabling stock transfers where required, to keep all areas of your business functioning, as it should.
More accurate stock checking
With spreadsheets, checking stock levels is dependent on employees inputting the right data. During busy times, this duty may become neglected or errors may occur that makes the data collected inaccurate. A functioning stock control system eliminates this problem by offering more accurate stock checking. Through digitising how stock levels are managed, you can compare what you currently have in stock with what you’ll need for future jobs. Instead of making stock control a guessing game, you’ll gain greater control to benefit how your business operates. Overall, implementing a stock control system through an effective software solution gives businesses tighter control on what they have and what they’ll need. Not only does this help you work towards leaner processes, minimising waste and keeping your products fresh, you can deliver greater customer service through distributing products on time and as quoted.
Stock control is a key component of our ERP software. To learn more about the features it offers, visit our dedicated stock control page.
Want to experience it for yourself? Request a demo online today.