Stock is one of the biggest assets for any form of business, whether you are operating a shop, a factory, or a warehouse. Inventory control and management is one aspect of any company that should be well understood to facilitate efficiency and success. Although these terms are used synonymously, they serve different functions and are of differential significance for the total supply chain.
To avoid stockouts, overstocking, and other problems associated with inventory management, it is important to have a good inventory management process in place. Among the most important methods of inventory control is the use of a Warehouse Management System (WMS).
What is Inventory Control?
Inventory control is a part of the broader inventory management that is aimed at the regulation of the movement of products in and out of the warehouse or store. Its main purpose is to identify and sustain the appropriate stock amounts—when to order more and when not to. Economical inventory management has the objectives of tracking and analysing inventory status and properly placing order points according to inventory usage.
Key Features of Inventory Control:
- Stock Tracking: Ensures that the various quantities in every product are well documented.
- Reorder Levels: Assists in determining when threshold levels for replenishment are created depending on consumption patterns.
- Avoiding Overstock: Eliminates the possibility of holding unnecessary inventory, which ties down capital.
- Minimizing Stock outs: Reduces the risk of running out of products, which can lead to missed sales.
- Using Barcode Systems: Often leverages barcode scanning for accuracy in tracking items.
What is Inventory Management?
Inventory management, on the other hand, involves a more comprehensive approach to managing your entire inventory system. It covers everything from procurement and storage to tracking and distribution. Inventory management focuses on strategic decision-making to ensure that the right products are available at the right time while maintaining cost efficiency. It considers multiple aspects like vendor relations, stock rotation, and forecast demand.
Key Features of Inventory Management:
- Order Management: Spanning order dispatch and delivery tracking and also supervising backorders.
- Forecasting Demand: It is the process of estimating future inventory requirements from historical records of sales made in the organization.
- Supply Chain Coordination: Aids in keeping suppliers and warehouses in check with the customers.
- Storage Optimization: Facilitates the determination of the optimal procedures for storage and access of products.
- Cost Control: It seeks to reduce overall costs that may accompany inventory, such as storage, dealing with, and transporting it.
| INVENTORY CONTROL | INVENTORY MANAGEMENT | |
| FOCUS | Keep track of the stock you have right now | Plan how much stock you need in the future |
| SCOPE | Focuses on storing and organizing stock | Covers buying, storing, and using stock. |
| OBJECTIVE | Prevents loss, theft, or damage to inventory. | Aligns inventory with business goals and customer demand |
| TIME FRAME | Short-term focus on current stock levels | Long-term approach to supply chain planning |
| TOOLS USED | Uses simple tools like scanners or lists. | Uses software for tracking and planning |
The Function of Warehouse Management System (WMS) in Both Processes
Both inventory control and inventory management can benefit immensely from the use of a Warehouse Management System (WMS). A WMS is designed to streamline the handling, storing, and distribution of products in the warehouse, providing real-time visibility into stock levels. This tool can automate many tasks involved in both inventory control and management, such as inventory tracking, order fulfilment, and stock rotation.
For Inventory Control: A Warehouse Management System (WMS) assists in keeping a record of the stock in the warehouse and helps to avoid overstocking or stock-out situations prevalent in many organizations.
For Inventory Management: It facilitates improved planning, monitoring, and control of the stock on any network channel to enhance storage space, pick-up of orders, and shipping.
CONCLUSION
In conclusion, while inventory control and inventory management are closely related, they differ significantly in scope, objectives, and functions. Inventory control is more tactical, focusing on maintaining the right stock levels at any given time, while inventory management takes a broader, more strategic approach to ensure the efficient flow of goods throughout the entire supply chain.
By implementing tools like a Warehouse Management System (WMS), businesses can streamline both processes, reducing costs, optimizing storage, and improving customer satisfaction. Mastering both inventory control and inventory management is essential for running an efficient and successful warehouse operation. Contact Scalar for innovative management solutions!
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