Stock control

Here are some issues to consider regarding stock control.

Inefficient stock management can seriously damage the profits of any new or growing business. Holding stock ties up valuable cash, and incurs costs in warehousing, personnel, transportation and insurance.

In an ideal world, every business would have no stock at all but would operate entirely on a well-tuned just-in-time system with materials and parts arriving in the order and quantities in which they are needed for retailing, or for the manufacturing or assembly process.

But since most small businesses do not have the resources to implement just-in-time, here are some suggestions for reducing stock costs:

Identify those materials that are commonly used in numerous different products - and use them as widely as possible
Check the quality and accuracy of goods received from suppliers. If you only spot the poor quality at the end of the process, it is too late.
However, if you work closely with your suppliers and build up a relationship of trust, you may be able to cut down on the time spent checking the materials that come in
Wherever possible, reduce the lead time for ordering materials, but take care not to unwittingly create hold-ups in production
Constantly review sales trends and cross-reference them with stock requirements
Make sure delivery schedules are well choreographed with production - try to avoid holding any more finished products than you really have to
Try to negotiate discounts on virtually everything that you buy and then negotiate terms for payments and interest rates.

Caution

Finally, a note of caution: although it is generally best to keep stock as low as possible to avoid tying up capital, this might not always be the case if there are really significant bulk discounts available.

If you decide to make changes to your stock levels or procedures, be sure to do so within the context of the business as a whole: never make stock decisions in isolation.

If you are starting a business and would like help and advice, contact Attwoods.

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Stock control

Stock control

Caution

Here to help

Contact details

What services are you interested in?

Message

Which location would you like to contact?

Communication

Latest news

Savers added £42 billion into cash ISAs in first half of 2024, data shows

Inflation rate holds steady in August at 2.2%

Billion-pound tax bombshell to hit hospitality, warns trade body

IPSE calls for fairer off-payroll rules in Budget

IoD outlines key policy changes in Budget submission

Reforms to IHT, CGT and NI 'could raise over £20 billion a year'

UK economy unexpectedly flatlines for second month in row

£5.5 billion lost as a result of tax evasion, report finds

Business group urges government to fix 'antiquated' business rates rules

Scam complaints reach highest ever level, data shows

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