The Ins and Outs of Stock Control: The reactive and proactive approach

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Managing stock can be a complicated task, especially as your business grows. Many inventory managers and business owners fall into the habit of reactive stock control, where stock issues are dealt with as they arise. However, this type of stock control is largely ineffective and, sometimes, may be counter-productive.

Business owners should be working toward proactive stock control instead, whereby any potential issues are considered ahead of time and systems are put in place to deal with them promptly. In this article, we explain the differences between reactive and proactive stock control, and ways business owners can ensure they’re being proactive at all times.

What does reactive stock control look like?

One example of a reactive approach is when the business runs out of stock in a particular item, meaning the business cannot meet demand. This outcome is typical of a reactive approach and generally will reoccur often because inventory stock is not being controlled and monitored effectively.

This can often happen when stock is ordered without assessing historic sales trends in line with future demand. The outcome is that the level of stock ordered does not match what will really be required. In this situation, the stock manager (or business owner) will be forced to quickly order in more of the particular item, refund the customer or delay processing their order. Of course, inconveniences like this are very bad for customer satisfaction and should be avoided at all costs.

Another typical reactive stock control scenario is where a business sells products via multiple channels – for example, in-store and online. However, they fail to adequately record changes in stock levels across the board. In this situation, a customer may order something online only to find that, although the online store suggests the item is in stock, the company is in fact out of stock due to in-store sales.

What does proactive stock control look like?

By comparison, proactive stock control helps to avoid the situations described above. If stock is managed proactively, business owners and inventory managers can prevent these situations from happening.

Proactive stock control would involve tracking sales trends, history and patterns so that stock orders are adequate and accurate. This will mean that supply levels will meet demand, and customers won’t be left empty-handed because of low stock levels. The business also won’t be saddled down with excess inventory they can’t sell. An easy way to do this is to use inventory management software, which can help business managers count and track stock, review sales histories and more.

In a similar way, proactive stock control would see business owners and inventory managers syncing up sales records in store with sales online. Then, when the customer purchases a product online, they can trust that the website’s stock levels match the reality. A great way to sync this information is to invest in software such as barcodes and barcode scanners, which help to automate the process of stock control and avoid human error. By doing so, business owners can proactively — and effectively — manage stock.

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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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