Stock management involves keeping track of and arranging a business’s stock, which includes everything from raw materials to products that are still being manufactured to the finished goods that are displayed on store shelves or delivered to customers’ homes. In the past, business owners completed inspections with pen and paper and filled out Excel spreadsheets to meet management criteria; nowadays, software and automated methods are utilised more frequently.
Here are five facts regarding this critical component of managing a successful firm that business owners probably don’t know:
1) Employee theft is more frequent and detrimental than you might imagine.
Employee theft is a serious problem for businesses and is far more widespread than employers would like to admit. A study of 23 major retail corporations revealed tens of thousands of examples, which, based on a loss-prevention consulting group, indicate that the practice has been increasing recently. Even though the odd small-scale theft might be ignored, employee theft accounts for close to one-third of all bankruptcies. This is because once an employee takes something, they’re going to do it again, and they’re probably not the only ones. Automating stock audits stops stock from going missing, especially when your employees are watching.
2) Stock records could contain startling inaccuracies.
Human error is inevitable when that comes to manual effort during accurate stock and audits; even the most meticulous personnel make mistakes. An error is made by proficient data entry workers every 300 characters, which can result in major stock confusion when multiplied by the hundreds of barcodes on the thousands of goods. The inaccuracies won’t just affect daily operations; it will also be difficult to execute accurate end-of-year audits, which might lead to everything from larger tax payments to legal problems brought on by erroneous stock write-offs.
3) Automated software anticipates your company’s needs.
The number of each item you have is merely one function of Stock management software. It may change how a company creates, stores, and distributes its goods. Automated stock management, for instance, balances a business’ stock turnover ratio. The ratio of average stock to the price of goods sold is a crucial indicator for small businesses. Businesses with low cost of goods and high average inventories are probably overspending on holding expenses; in contrast, businesses with the high cost of goods and low inventories are more likely to experience stock-outs, which hurt both their financial position and their reputation. This ratio is balanced by stock management, allowing the company to reorder needed commodities only when necessary.
4) Unexpected cost savings are made by automated systems.
Likely, certain business owners don’t believe it’s worthwhile to invest in an automated stock management system. Why fix a manual process that has “worked” (however ineffectively) for years? The areas in which businesses recuperate their money aren’t immediately apparent, and management software provides a huge return on investment.
5) Automated systems give business owners a “comparative advantage” that allows them to outlast rivals.
Your company has a “differential advantage” if it offers a service or product that no other company can. That’s a hard edge to keep in the age of enormous merchants such as Amazon and a more globally interconnected economy.
Instead, your business can develop a “comparative advantage,” or cost advantage. This is the capacity to manufacture and then sell your products at a lesser cost than your competitors, resulting in a higher sales margin. In part due to its QR code stock management system, which enables it to export millions of products at a lower cost than some other online sales sites and bring the stock of its 3rd vendors without confusion or sluggishness, Amazon has a relative benefit over many of its rivals. Not everyone can immediately see the advantages of automated stock management, particularly those who have relied on manual processes for a long enough time to feel at ease with their system or who are new enough to their field to not think an investment is necessary so soon.