Sales management

Benefits of Having a Stock Management System in Your Company

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Having a stock management system in place is a crucial factor in achieving effective financial performance. 

It is vital for businesses to have a well managed and controlled stock. Your key focus in this area should be to maintain an optimal stock level at all times. 

The essential elements of stock management are control and planning. 

Broadly speaking there are three important factors:

  1. How often should you determine the optimal stock management level for each item?
  2. When should you reorder from your supplier?
  3. What is the optimal quantity to reorder?

Stock monitoring and control should be a core activity of your business. 

This gives you visibility of stock levels and allows you to make better decisions, reduce costs by not missing goods and therefore you can offer your customers a better service. 

Having optimal stock management frees up your cash flow.

What is a stock control management system?

A stock control system is the mechanism through which a company manages the efficient movement and storage of its goods, the flow of information and the resources derived from it. 

By having a stock control system to manage your stock, you will be faced with two important decision factors: inventory classification and reliability records. 

This means that it is important to know how much you have in stock, as well as the ability to identify each of the products you manage in your company.

Stock management.

indicators To fully understand stock control, three key components must be considered:

Maximum stock.

This is the maximum quantity of a particular item that you want to keep in stock. As long as it is in order, it is a cost to your business. 

Some businesses find that it is desirable to have a large stock management facility to hold it in:

  • The product has a very high turnover.
  • The storage cost is low and the transport cost is high.
  • The supply lead time from the supplier is long.
  • There is speculation on price increases


Minimum stock.

This is the minimum quantity of certain items that you want to keep in stock. 

When demand peaks unexpectedly, it can create a supply problem and loss of revenue for the company due to unmet demand. When should a company be interested in maintaining low inventory levels?

  • When the delivery time from the supplier is immediate.
  • When ordering costs are low, regardless of frequency or quantity.
  • Identifying the item as slow moving and high cost.
  • By being very confident in your agreements with suppliers.
  • Speculating that prices will come down.


Reorder point.

This is the stock level at which stock is ordered for replenishment.



What are the benefits of having a stock management system for your company?

Stock management and control is a process that has a major impact on all operational areas of your business and is a key aspect of administration.

When competition is fierce, companies must always ensure that they have a balance between supply and demand.

Having a stock management system in place brings many advantages to your company to provide important and timely information in real time to help better planning and decision making.

Some of the benefits you will get by having a stock control system in your company are:

  • Increasing the quality level of customer service, reducing lost sales due to lack of product and generating greater loyalty to your company.
  • Improving your company's cash flow and have a higher inventory turnover.
  • Being able to identify the seasonality of your products will help you plan better.
  • Easily detecting slow-moving items to develop strategies to get rid of them easily.
  • Reducing freight costs for greater planning and reduction of emergency purchases.
  • Monitoring the quality of products so they are well identified and controlled.
  • Freeing up and optimizing space in your stock to increase profitability per square meter of storage.
  • Controlling incoming, outgoing and location of goods.

To obtain these benefits for your business it is important to have a tool that provides you with support to manage your inventory more efficiently, such as a CRM!


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