Stock management: what you should know about that

Stock management supposes optimization of business processes connected with management of manufacturing supplies inventory, raw materials, unfinished goods and other objects of enterprise activities, lowering of expenses on storage when providing the level of continuous operation and company maintenance.

Stock management in logistics is oriented on optimization of business processes connected with procedures of cargo execution and handling and coordination with procurement and sales services with calculation of optimal amount of storages and their location.

Thanks to optimized business processes in stock management it gets possible to meet the requirements of customers, or even exceed their expectations having provided sufficient stock of each type of goods in order to enlarge profitability of the company.

All kinds of goods come through production cycle before they become available in shops. According to unpredictable character of situation on the market it has an impact on production process as well. None of specialists would tell you how many items of goods will be sold next month.

In order to avoid the problem of the lack of raw materials, and, consequently, suspension of production, enterprises have stocks.

However, with stocks enterprises get more expenses:

  • Certain part of company’s funds are involved into stock carrying;
  • It is necessary to pay for the service of specialized personnel;
  • Expenses on the maintenance of storages;
  • The constant risk of spoilage of goods;
  • Payment of extra taxes.

Systems of stock management

In order to optimize business processes in stock management, companies provide monitoring of stock status and make orders periodically, based on the following systems of stock management:

  • Operative management system. The decision of making orders is made periodically, according to stock status.
  • The system of regular procurements. Ordering of a certain amount of materials at regular periods of time.
  • The system of stock replenishment to full extent. The order is made at regular periods of time and its volume depends on actual volume of stock at the moment of ordering.

The policy of stock management

  1. Predicting of demand. According to comparing of the volume of sales at different periods of time, it becomes possible to predict the demand for the future.
  2. Calculating of acceptable deficit. It is possible to calculate what percentage of deficit is acceptable and can help to avoid the spoilage of goods.
  3. Optimization of business processes connected with supplies. It is important to lay down certain conditions working with suppliers in order to eliminate inaccuracy of supplies.
  4. Transfer to more optimal ways of logistics.
  5. Personnel monitoring. The level of write-offs of goods by the personnel should be under control.
  6. Optimization of business processes by means of automation.
  7. Getting rid of non-core assets.

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