Controlled Inventory
When you remove the guesswork from what you manufacture or sell, you gain greater control over profitability; a controlled inventory responds to demand with the goal of carrying the least amount possible required to meet it. Every business strives to reach this goal as it is the most desirable position for optimal business growth.
Having enough product or materials on hand to meet demand ensures your business does not miss sales. Too much or too little can result in losses; excessive inventory quantities require additional storage while insufficient quantities lead to missed sales.
Why is inventory control necessary?
Proper inventory control management removes any personal preference from product decisions and relies on data to inform purchasing behavior. Your business will need to carry more of the popular items and fewer of the less popular. As a finished product sells, all the materials or ingredients that were used to make will be required to produce another finished product to replace it. If tailoring your purchase behavior to react to demand, you will always be ordering items to replace inventory as it is sold. If planning for seasonal trends, you must consider changes in demand for previous seasons to inform ordering behavior.
Using intelligent software to solve this problem gives you greater visibility into every area of the business; it removes the guesswork because every item, every cost and every task is accounted for. Starting off with a physical inventory count to enter information into your database provides access to all users at all touchpoints for processing.
It’s much easier to control the workflows that occur under your roof. When transportation issues, supplier problems or economic changes happen, you can’t control these issues. Your response is limited to your business.
If you’re a small business owner, you know that being competitive today is about looking for small wins and thinking out of the box for ways to innovate. If you want different results, you need a new approach. SOS Inventory was built to offer this opportunity to small businesses like yours.
Different Inventory Control Methods
SOS Inventory offers both inventory control methods:
- The perpetual inventory method updates inventory quantities in real-time, changing them as raw materials or products are received, used to manufacture, and sold so the company ledger matches actual quantities.
- The periodic method requires a manual review of inventory on hand and often suits companies that need to close or work odd hours to go through their entire inventory. Inventory counts might be updated monthly.
Using an inventory control spreadsheet is common when businesses first start out, but growing businesses will eventually need to upgrade to a software system that maintains uniform data for every area of the business. SOS Inventory is preferred by small business owners for its vast array of controlled inventory functionality available at a price point any size business can afford.
SOS Inventory offers controlled inventory features for any company that makes, buys, or sells products including supply chains, manufacturers, distributors, wholesalers, and retailers. All the internal departments share information in a centralized database, whether originating in the warehouse, on the production floor, in fulfillment, from the sales team or your finance department. When everyone has access to inventory quantities at all locations, in all stages and including all costs incurred anywhere in the journey to the customer, accurate reporting and informed decision making are consistently possible.
Inventory control methods can be applied at many different stages to improve performance, meet demand, trim waste and improve product quality. Without deep insights into what happens at each stage, it’s impossible to identify a starting point when looking for places to make improvements. Techniques of inventory control can be applied to improve profitability even faced with market challenges.
Different industries have different needs:
- Food and other perishable products have expiration dates and must be processed and sold while still fresh. SOS Inventory’s lot tracking functionality makes forward and backward traceability possible.
Trendy products like furniture or clothing quickly become obsolete. Quantities must be kept in line with demand and seasonal trends to avoid overages or stock-outs.- Certain manufacturing processes alter the composition of the raw materials to create a finished product, such as baked bread. These products require variable yields to allow for measurements used in recipes.
Trendy products like furniture or clothing quickly become obsolete. Quantities must be kept in line with demand and seasonal trends to avoid overages or stock-outs.SOS Inventory offers vital features for tracking inventory upon receipt, through work in progress, delivery to the customer and after the sale, if a warranty is tied to the finished product.
What is inventory control in operations management? Tracking and managing inventory at every touchpoint of your backend operations offers clarity for decision making and control over manufacturing and productivity outcomes. Different inventory control methods are necessary for different industries and business models.
Reap the benefits of carefully controlled inventory with features normally found in high end ERP solutions. SOS Inventory brings you all functionality you need whether you run an ecommerce platform, manufacture goods, or sell products through a drop shipper. Give SOS a try today.
