Stock control to reduce unknown loss

Sometimes the theoretical inventory that is carried in accounting does not coincide with the actual inventory. This is generally caused by inventory management errors (although it can be due to other exceptional causes such as theft), so good stock control can help reduce these unknown losses.

But stock control offers other results that any warehouse must pursue, such as cost optimization or order maintenance based on demand; objectives that materialize with proper inventory management. That is, counting and classifying all stored products.

This process, which can be tedious, is greatly facilitated with the support of the technology. It is no longer necessary to put in a large number of overtime to go through all the aisles of the warehouse, writing down labels, counting packages, balancing accounts and trying to figure out the cause of unknown product losses by taking inventory.

What are unknown losses

When we speak of an unknown loss, we refer to a inventory decrease whose cause is unknown. As mentioned above, although it may be due to theft that has not been detected, it is usually a question of errors in warehouse management.

Unknown losses can lead to problems of different relevance in the day-to-day of the warehouse, since it means having products that are not really stored. Accounting takes them for granted, but they are not in the supposed location. Thus, the company can find itself in a situation in which it cannot deliver products that it has sold, delays in agreed deliveries, loss of time and money, customer dissatisfaction, poor image, etc.

Stock control as a solution

Carrying out exhaustive stock control means locate each product, also knowing the number of units that are available. Thus, it is possible to eliminate any of the problems mentioned above. For this it is necessary to have a good product classification through batch numbers, manufacturers, costs, barcodes and all additional information that is useful to offer the product to customers (for example, color, size, brand or components).

Within this classification section, it is important to organize the products based on categories according to the objective to be achieved, or what is the same, thinking about what we want to know about that set of products so that the information is effective. This may seem unnecessary in some companies, but even in cases where it doesn’t seem relevant, it can help with stock control. The product categories they classify homogeneous groups, thus facilitating reports and knowledge of the activity; therefore, they improve the efficiency of inventory counts. A classic example is seasonal products, for example in fashion, such as coats. Having a category classified (and defined so that the entire team understands its usefulness and description) as “winter clothing” helps prevent stockouts at certain times of the year and product accumulation at others.

It is also very useful to have a business management system that allows stock control automated and consistent. The advantages of a warehouse ERP can be numerous: avoid the possibility of having negative stock, support in periodic physical inventory, constant monitoring of the warehouse, alarm system when certain problems are detected, digitization of stock control eliminating paper, reduction of human errors, control of internal movements, marking of all operations, effective communication of incidents, administrative control, automatic orders based on stock levels, inventory planning with labels, collection of useful information for decision making, etc.

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