Matching stock to demand is critical for profitability and maximising service levels, whilst minimising stock investment. Good IT systems can deliver excellent Return on Investment (ROI) here. The key features to look out for include:
- Think in days – Ensure your IT system reports stock levels in days, based on current sales forecasts, and takes lead times and re-order intervals into account when calculating re-order quantities.
- Think ahead – Base re-order quantities on demand forecasts, not sales history. Your system should use adaptive smoothing algorithms for forecasts so it can react quickly to sales trends, but not over-react to random fluctuations in demand.
- Scan Goods In – Errors when booking in stock often cause big stock discrepancies.
- Monitor Low Stocks – Stock deficiencies due to unexpected demand can never be totally eliminated, but your IT system should alert you so you can act quickly to rectify the situation.
- Pick accuracy – Improving picking accuracy is an important element of reducing stock discrepancies. Voice is now the industry standard.
- Regular stock checks – While the correct use of technology can help minimise stock inaccuracies, they will never be eliminated, so regular stock checks are important. With modern WMS this can be ongoing, in real-time, as part of other warehouse activities.
- Monitor overstocking – For the best results, your system should report on overstocking so you can take appropriate action.
Find out more about our Stock Control Software here