Stock Management
Generally, stock management deals with the assortment of goods; and at the same time, keeps track of all orders, shipping, handling and other correlated process of maintaining goods or products for sale. The stock management also applies to the ins and outs of the goods or products in the business. The most complicated type of stock management is most likely within a retail chain environment such as a nationwide department store. Inventory in a store, have often several different locations over a specific quantity of goods. Similarly, there are numerous stops for goods between the first order and the last sale. In a retail store, it also follows the same steps, regardless of the product ordered. For instance, a specific store will notice that it needs a product; then the store will contact the purchasing department and make a request for the needed products that to be sent over to the branch. The head office will collect all of the required purchases and send one large order to the supplier. Then, the stock management normally deals with the suppliers to make order for various products or items. And, once the order is ready, the shipment will be set out to the company’s warehouse along with other orders collected from other suppliers. After that, the bulk shipment or delivery of goods is designated to various stores for sale to the customers.
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Moreover, stock management plays a vital role in a company’s physical assets. It is a financial investment of the business that if not used properly, can cause the company to drain its cash flow. Thus, in order to make sure that business does not just stuck their money in the warehouse; but a company must need to focus a bit of manpower and resources to be able to monitor their stock. In this connection, stock management is basically a cycle process of keeping up with regular stock inventory that includes tracking, shipments, handling of goods, and ordering from the suppliers various items for replenishment of the stock inventory. However, stock management if not done properly and correctly can break a company. At the same time, if not implemented correctly, a company can waste a lot of money on excess inventory or they could be short on supplies which will cause slow down in the production.
Correspondingly, there are common methods of stock management in the changing world economy. Many businesses today are focusing their attention on the inventory levels. They are finding effective ways on how to improve their stock management. In this relation, a structured strategy is also needed to be able to optimize production and product costs. In the same way, an automated approach must be chosen than the traditional method that only brings several disadvantages to the business such as higher costs and inventory error. Aside from that, a modern and successful stock management system provides a firm with adequate supplies of goods for sale or raw materials for the production. It similarly prevents the business in a stock out condition, where can affect tremendously on the company’s sales because it may lead the customers to go to other competitors if they are running out of stock. Nonetheless, having too much stock is also not good for the business for it will cause too much products or raw materials that will only expire before the company or production will utilize or exhaust them. So, to prevent this to happen, two different methods are being used now in different businesses to avoid inventory errors and they are Just-In-time Stock and Buffer Stock. Additionally, most of the stock management uses the “Just-in-Time Inventory” that deals with keeping and maintaining store stock as low as possible. If a new order is placed, the arrival date should be determined exactly when the current stock is about to run out. For instance, if a store sells one product daily, the appropriate time for the new delivery to arrive in the store is on the day before the last item will be sold out. The new shipment is put directly on a store shelf rather than in the stockroom. By doing this, the store reduces overhead expenses since it has few things that are not directly for sale. On the other side, Buffer Stock is a process where the additional amount of stock that is being held for future use during the times of re-ordering of items. There is a definite waiting period from the time the products ordered up to the time it will be delivered to the company. Still stock is being used, Buffer Stock is ideal for instances that the delivery of the goods takes longer and the existing supplies are running out.
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References:
(http://www.wisegeek.com/what-is-stock-management.htm)
(http://www.askdeb.com/inventory-management/stock/)
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