Control Your Inventory Stock Before It Controls You

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Inventory stock control is one of the most important aspects of your business. It can easily be overlooked as something of a hindrance which costs money and time to maintain and does not actually put product into the hands of the customer and money in the till. However, this take on it is naïve to say the least as effective inventory management impacts all areas of a business: sales, warehousing, the building, customer satisfaction, shipping and of course, profits.

Sales and Customer Satisfaction

These two points are somewhat related in so far as customers are required for sales and if a sale cannot proceed due to insufficient stock, then a customer’s satisfaction is sacrificed which in turn can cost future sales. It is a vicious cycle that needs to be controlled by you, rather than the other way around.

From the outset, accurate assessment of stock and monitoring of sales facilitates better prediction of trends, providing the basis for intelligent stock ordering or manufacture. It is then possible to pack the warehouse shelves with relatively accurate product types and volumes in relation to anticipated sales. The result is increased stock turnover and decreased inventory stock storage times.

This accurate understanding of customer requirements and correct fulfilling of orders improves customer satisfaction as they are never faced with a stock-out where they must wait for the product. This is a certainly a situation to avoid as any waiting time can be spent sharing their dissatisfaction with other customers or shopping elsewhere.

A place for everything and everything in its place

Warehousing is an important part of a company’s operations and must be treated as such with the level of attention to detail and time it is afforded. Ensuring accurate stock volumes are purchased or manufactured and that there are organised areas appropriate for their storage are essential for good warehousing practice. An excess of stock that is not known about results in clutter which can give rise to products becoming obsolete or expired before they are used or sold as they are out of sight, out of mind. This is an avoidable money trap that can easily translate into real savings for the company when it is brought under control. Additionally, accurate inventory stock levels negate the need for excess storage space, which allows a company to only lease a building big enough and suitable for their needs. This may also translate to a significant saving on real estate fees, which increases the profit margin by decreasing overheads.


Inventory stock management and control can have a dramatic effect on shipping and vice versa. Optimal shipping in terms of selecting the best carrier for the most cost-effective price requires forward planning and appropriate lead times, and this requires good stock control. Another aspect to shipping that affects stock control is the uncertainty of it. Adverse events can happen en route which can jeopardise the entire cargo leading to lost stock. As such, it is imperative businesses build-in contingency stock to their plan to ensure if this regrettably happens, their customers are not left short.


It is a given that profits will be determined largely by inventory stock control. This is mainly because inaccurate stock control can lead to two opposite yet equally undesirable eventualities. The first is that there is a stock-out from insufficient stock levels to fulfil customer demand. This, as aforementioned, creates customer dissatisfaction and loss of sales. The second, is that although an excess of stock would have one think a customer order will perpetually be filled which solves the problem, a new problem is created. Too much stock can result in stock sitting on a shelf for an inappropriately long period of time running the risk of expiring or becoming obsolete. If this happens, the inventory stock must either be sold at a reduced rate or discarded. Not only does this equate to money down the drain as it were, but while the stock was sitting on a shelf, it was incurring storage fees which were evidently not recouped from a sale.

Finding the Balance

Inventory stock management is all about balance to achieve the perfect ratio of stored inventory stock to sales so that one always compliments the other. It is difficult to get it right, however it underpins any well-functioning business.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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