What is stock management and how can it be optimised?

Stock management involves keeping track of the items you sell or the raw materials you use in your business. Having a good management method means you can avoid stock-outs, reduce storage costs, optimise inventory and improve customer satisfaction. But which management system should you adopt? And what technologies are available to you today to meet the demands of the market?

The different stages of stock management

To give you a general idea of how stock management works, let's look at the basic stages involved:

1. Purchasing products from suppliers
2. Receipt of goods delivered by the carrier
3. Putting the goods away and storing them
4. Entering the stock that has just been entered, either manually or using software
5. Selling the products
6. Updating stock levels
7. Placing a new order with the supplier

The vital importance of stock management

Stock management is important because it helps tooptimise expenditure. In particular, it avoids dormant stocks, also known as dead stock. This is made up of products that are no longer sold and remain in the warehouse. They therefore represent a storage cost for the company, which could store other items or use tied-up capital.

In some cases, especially if you sell or serve perishable goods, stock management is also a question of safety,hygiene and traceability. What's more, it prevents waste.

The different types of stock management

Would you like to improve your stock management? The best-known methods include :

The just-in-time management model

A product is only manufactured when it is ordered by the customer. This system avoids stockpiling goods and possibly ending up with dormant stock. It does, however, make the consumer wait and requires a certain amount of flexibility from the teams.

The Kanban method

This consists of cards placed in the bins or containers. When they are visible, they remind managers that it's time to place an order.

The order point

A replenishment alert appears directly on the software when the set minimum number of products has been reached.

Periodic or calendar replenishment

This is suitable for companies that work with suppliers who take orders on a fixed date. A maximum stock level must be set for each order.

Key features of effective stock management

In addition to these methods, there are a number of general rules to follow if you want to manage your stocks effectively:

• Know your customers' needs and desires. If you don't carry out regular market research, you run the risk of ending up with dead stock or, on the contrary, being out of stock
• Ask customers for their opinions on your products so that you can anticipate future sales and resolve any problems
• Check the condition and quality of items on receipt. If some are unusable at the time of sale, this distorts the stock and can lead to dissatisfaction
• Use good stock management software to count incoming and outgoing products on a daily basis and avoid errors
• Carry out regular stocktaking to monitor stock levels
• Reduce shoplifting or theft by employees by implementing surveillance tools, or even by attaching traceable labels to objects (RFID solutions in particular)

Stock Management System: a must for your store

A stock management system, or SMS, is a computer programme shared by all those involved in stock management. It is essential for optimising costs and facilitating the work of teams. There are a number of more or less comprehensive systems, but their role is generally to :

• Monitor the inflow and outflow of products in real time, with a view to controlling irregularities (e.g. managing known markdowns) and placing orders with suppliers
• Monitor the replenishment schedule
• Display stock levels (quantities), particularly for sales staff
• Display the location of items in the warehouse and any notes made by warehouse staff

Innovative technologies to make stock management easier

As you can see, manual stock management with pen and paper is no longer an option, at least for medium-sized and large companies.Automation and the use of technology are on the increase, and cutting-edge tools are now available to all types of business.

For example, by choosing the intelligent video surveillance software based on artificial intelligence that we have developed at Veesion, you can reduce shrink by limiting theft in your store. Adopting this process is essential if you want to remain competitive and keep your store's stock levels fluid.