What is Inventory Control?
Inventory control or stock control is the process of managing inventory items in a company’s warehouse and other locations. It consists of systems and procedures that monitor the movement and storage of goods to help businesses maintain a sufficient supply in good condition. Establishing an inventory control system empowers businesses to satisfy customer demands and maximize profits.
Inventory control is a key element of an inventory management system. Warehouse managers and production planners should adhere to the following activities and procedures in controlling their inventory:
- Receiving, storing, and transferring goods
- Placing items in strategic locations
- Tracking inventory items and their locations in the warehouse
- Documenting product details and histories
- Monitoring the condition of items in stock
- Fulfilling purchase orders with stock on hand
- Integrating barcode scanners
- Forming reorder reports
Inventory Control vs Inventory Management
Although these two concepts go hand in hand, there are slight differences between inventory control and inventory management. Inventory control handles existing stock in a warehouse, while inventory management involves the overall movement of goods across supply chains.
To quickly define, inventory includes all the goods and products of a company that are ready to sell, along with the accounting of raw materials required to produce these goods. The table below compares the two processes against their scope, goal, areas of concern, and actions.
| Inventory Control | Inventory Management | |
| Scope | Existing inventory in the warehouse | Raw materials and finished goods during the entire production lifecycle |
| Goal | Ensuring stocks in the warehouse are enough and in good condition | Having the right inventory in the right place, at the right time, and with sufficient quantity |
| Areas of Concern |
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| Actions |
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Types of Inventory Control Systems
An inventory control system is a technology-driven method for managing and tracking inventory, which includes raw materials, components, and finished products. These systems help businesses monitor stock levels, order quantities, and storage locations, ensuring that they have the right amount of stock at the right time.
There are two main types of inventory control systems: the periodic and the perpetual system. Choosing the right inventory control system will depend on the business type, size, and kind of inventory. This section discusses these two types in detail, covering their pros and cons, as well as what theyre best for.
Periodic Inventory Control System
The periodic inventory control system pertains to a recurring count of goods at specific intervals. In this system, warehouse managers manually count their inventory on a monthly, quarterly, or annual basis. The exact period depends on an organizations needs and business activities.
- Pros: Its relatively simple and easy to manage for smaller inventories. It doesnt require any specialized technology and equipment, making it easier to train individuals in.
- Cons: It becomes a lengthy process for companies with expansive inventories. The manual counting process is also highly prone to human error.
- Best for: The periodic system is ideal for small companies with minimal inventory. It also works best for businesses selling niche products and counting larger-sized goods.
Perpetual Inventory Control System
The perpetual inventory control system provides an accurate count of inventory levels in real-time. It utilizes technology, such as barcodes and Radio Frequency Identification (RFID) tags, for tracking products. The information is then logged in a centralized database that warehouse managers can easily access.
- Pros: This method removes the need for manual counting. It gives warehouse managers a snapshot of their inventory counts over a specific period of time. Doing so drives data-driven decision-making for sales, ordering, and inventory management.
- Cons: An inventory control software can be expensive to maintain. Moreover, it might not capture discrepancies due to product theft, loss, damage, and scanning errors.
- Best for: The perpetual system works best for companies with multiple locations. Its also great for businesses maintaining large inventories.
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How Training Can Help Your Inventory
With good inventory control training, you can effectively reinforce the best practices outlined in your operating manuals and Standard Operating Procedures (SOPs). And on top of higher quality work and better productivity, it can also help your workers become more aware of potential issues and be proactive in preventing mishaps along the way.
With SafetyCultures Training feature, you can easily transform your work instructions into training slides that are interactive, visually appealing, and easy to understand. You can also make training accessible to your team using their preferred devices.
Leizel Estrellas
