Inventory status: best practices for monitoring

As your business grows, so do the challenges associated with managing your inventory. Questions arise: how do you keep track of your inventory? How can you prevent items from getting lost, damaged or perishing? How can you avoid errors? Here are a few best practices for effectively monitoring your stock levels.

‍

What is stock condition monitoring?

Inventory tracking involves supervising the inventory or stock of goods, materials or assets in your business.

It enables you to keep accurate records of the quantity, location and condition of your products in stock. You identify the goods and update the records as items come in or go out.

Keeping track of stock levels is absolutely essential for effective supply chain management. Why should you do this?

‍

Why track stock levels?

Customer demand is rarely static. It can vary according to seasonal changes, changing market trends or unforeseen events.

Monitoring your stock levels allows you to adjust your stock levels according to these fluctuations, ensuring that you have enough goods to meet your customers' demand, without overstocking.

Here are just some of the reasons why stock condition monitoring is essential:

• Cost control:

Your stocks represent a significant proportion of your company's assets. If you keep excess stock, you're probably tying up capital that could be used for other investments. On the other hand, if you underestimate your needs, you are exposing yourself to emergency orders and major costs. By monitoring your stock levels, you can strike the right balance between having enough stock to meet demand and minimizing holding costs.

• Operational efficiency:

Incorrect stock records can disrupt many aspects of your operations. For example, your teams may unintentionally send customers damaged or unavailable items.

By effectively tracking stock levels, you can keep operations running smoothly by providing real-time information on stock levels and replenishment points.

• Prevent theft and loss:

By tracking your goods, you can keep track of where your products are at all times. In the event of theft or loss, you'll be able to track it down, guaranteeing the protection and integrity of your assets.

• Customer satisfaction:

Effective monitoring of stock levels ensures that you have the right items at the right time for your customers. You can avoid stock-outs and maintain the confidence and loyalty of your customers.

‍

‍

How do you know if your stock is well managed?

KPIs enable you to measure the performance of certain actions and help your company make decisions. If you have put in place certain methods for monitoring stock levels, you will need to be able to measure their effectiveness.

Here are 4 key indicators to calculate regularly to monitor your stock levels and know whether your management is optimal:

• Service rate = orders delivered on time / number of total orders

This KPI gives you the percentage of deliveries made on time.

• Availability rate = products available to customers / total number of products in the catalog.

This gives you the percentage of products available to the customer at a given time.

• Turnover rate = sales / average stock

This KPI gives you the number of times your stock has been renewed to reach your sales figure.

• Occupancy rate = (average quantity or volume stored / warehouse capacity) x 100

This figure gives you the percentage of space occupied in your warehouse.

‍

‍

Now that you're convinced of the need to monitor stock levels, here are a few best practices for doing it properly!

‍

Best practices for monitoring your stock levels

4 effective stock monitoring methods

For small and medium-sized businesses, effective stock monitoring is generally a combination of several methods. We recommend that you train your teams in 4 methods:

1. Good organization of the storage space: so that each product can be easily identified.
2. A labeling process: so that each employee can find the different products quickly in the warehouse. It's best to use simple barcode and QR code systems to standardize the tracking process.
3. An inventory process: how often (annually, quarterly, monthly or in real time), using which tool (paper, Excel, warehouse management software)? You can set up a basic stock tracking system on an Excel spreadsheet or an inventory ledger to meticulously record all transactions. In our opinion, the best method of stocktaking is in real time, noting outgoing and incoming stock. So remember to update the ledger with every movement to ensure accuracy, and carry out periodic physical audits to ensure that stock levels match.
4. A supply process: in other words, who takes care of it, when, how can the recall be automated?

‍

‍

Please note: stock management methods may differ depending on the type of product. For example, if the products or raw materials are perishable, you'll need to manage stocks taking into account the fact that goods that have been in the warehouse for a long time need to be taken out.

‍

Best practice: stock management software

The best practice is to use inventory management software. This allows you to obtain information in real time, automate tasks and therefore optimize stock levels. For example, Erplain stock management software lets you monitor stock levels in real time. It simplifies the management of your items and prevents you from running out of stock.

With Erplain, you can:

• have instant visibility by storage location: you have a clear and immediate view of your stock levels in each of your warehouses.
• accurately monitor stock levels: real-time updates and automatic replenishment alerts prevent stock-outs.
• synchronize your sales data: for each sale, stocks are synchronized, guaranteeing accurate, real-time management.

Erplain, as a complete SAAS solution tailored to the budgets of VSEs and SMEs, meets all your stock management needs.

‍

Try it for free!

‍