Inventory control is about generating maximum profits with minimum inventory investment, without affecting customer satisfaction levels. Inventory control is also about knowing where all your stock is and ensuring everything is accounted for at any given time.
At first glance, inventory control and inventory management cover similar bases revolving around the question of “How much to order?” While these two terms are often used interchangeably, they actually deal with different aspects of inventory optimization. Inventory control involves keeping track of the stock that is already in the warehouse, such as what products are being stocked and how much of a particular item is available. It also involves aspects of warehousing designs, such as knowing where everything is and ensuring that the products are stored well.
One of the biggest challenges in inventory control is to decide how much to order. In order to avoid obsolescence and spoilage, forecasts have to be made to keep inventory levels low yet adequate enough to match customer demands.
Even big players fall victim to this:
With over 11,000 stores in 27 countries and an average of $32 billion in inventory, Walmart’s supply chain is an impressive logistical accomplishment. Nevertheless, Walmart’s out-of-stock problem has been making waves in the recent years... So, what went wrong?
As mentioned above, a retailer’s worst nightmare is to go out of stock. Lost sales and lost goodwill can tarnish a brand’s reputation in record time. However, with effective inventory control to ensure that well-received products can always be delivered, going out of stock can be avoided with good inventory control.
H&M manufactures 80% of its retail inventory in advance and introduces the remaining 20% based on the most current market trends. These manufacturing strategies helps the company to reduce lead times, keeping them at the top of their inventory control game.
Read next: Introduction to inventory forecasting