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Inventory control is always a hard process but a very essential aspect of any business. No one can operate a business well unless they know what they have in stock, what has been sold, and what is the cost of goods. In this article, we will introduce 11 inventory control procedures that you can apply to manage your inventories more efficiently.

What is inventory control?

inventory control features

Inventory control, often known as inventory management, is the process of monitoring a company’s warehouse stock to make sure that it is at the most sufficient level. It includes the process of managing items from the time they are ordered, through storage, movement within a warehouse or across different warehouses as well as to their final destination or disposal. Inventory management is a critical part of every retail business. Wondering how important the inventory movement report is? Read here.

An inventory control system is a technological approach that helps businesses maintain and track commodities through the supply chain. This technology will integrate and manage purchasing, shipping, receiving, warehousing, and returns into a single system. Practicing good inventory control procedures can help businesses reduce many manual operations which are costly and time-consuming. It will show you exactly how much inventory you have, where it is, and when you need to reorder to maintain ideal stock levels. For SMEs that want to learn how to manage inventories efficiently, this ultimate infographic guide is highly recommended.

11 inventory control procedures and techniques

inventory management techniques

Every business will apply its own way of inventory control. However, at the end of the day, managing stock efficiently is the target that everybody wants to achieve. There are a few common procedures and inventory management best practices that can instruct you on how to manage inventories more efficiently.

1. Prioritize location and accessibility

Make sure that your warehouse and stock are well organized and accessible since it will reduce much time for staff to look for the location and find the products. As a result, all other following steps can run smoothly.

2. Establish the floor and layout arrangement

This will help the owners and staff have all the product locations on their minds so it will be much easier and faster to find any items when needed. Besides, creating a floor plan will assist you in determining the best location for your merchandise.

3. Optimize and forecast your inventory

Try to optimize and forecast your inventory by ensuring an adequate amount of goods, not too few or too many. It’s also a good idea to make a list of hot items that sell faster than others. Regardless of the season, these things should always be in the warehouse. It will also be much easier to prepare for impending supply and demand concerns if sales rates are monitored and market trends are followed.

4. Get rid of unneeded stock

Try to get rid of items that have been in stock for an extended period of time by running promotions or offering discounts. It will create more space for you to put other needed items. Besides, such offers can also increase customer satisfaction, make inventory replenishment easier, and keep business going forward.

5. Set a cycle count schedule

Establish a cycle count timetable to adequately monitor product flow rather than waiting for a chance to count your inventory.

6. Check stock quickly after delivery

After each inventory order arrives, spend a few minutes checking to see if your delivered merchandise is correct or there are any problems with the product’s quality and refuse any items that are not ordered or spoil. This step will help you avoid the case that the real stock is not enough or excess the inventory data from the system.

7. Label all products

Labels should have enough data such as product name, number, quantity, and description. Labeling all products makes it much easier and faster to recognize them.

8. Keep an eye on expiration dates

When you pay attention to the product’s expiration dates, you can get rid of any remaining merchandise before it goes out of date by reducing prices or offering special deals.

9. Make sure you’re keeping track of your inventory

You will need to know how much stock you have, where the stock is coming from, or when the items are leaving the warehouse to run your business. So, it is essential to keep track of your inventory frequently. Nowadays, almost all businesses use inventory management software to help them keep track of inventory. 

10. Assign inventory management responsibility

When you assign separate inventory management responsibilities for an individual, they are more likely to do the task better. It is because they focus more on the process, spend more time, and are more familiar.

11. Create back-ups of your inventory data

You must also ensure that you have data backups so that critical information is always available, accessible, and never lost. And, in the unlikely event that data is lost or erased, you’ll have backups ready to restore, ensuring that your business and customers aren’t harmed.

How inventory control can affect your business?

how inventory control affects businesses

Incorporate an adequate inventory management process with your system can help businesses ensure their financial health and stock level that satisfy customers’ needs and expectations. According to, 62% of customers have stopped buying from a company because of bad customer service. Frustration over out-of-stock or back-ordered items is at the top of the list of customer service complaints. In fact, according to research on convenience stores, out-of-stocks can lead a store to lose one out of every 100 consumers. Furthermore, 55% of buyers at any store would not purchase a substitute item if their preferred item was unavailable. 

Besides, a good stock control system also can help businesses acquire real-time information on items, reduce spoilage, and reduce inventory holding costs. As a result, business owners can store, track, deliver, and order inventory or stock by practicing standard inventory control procedures to avoid losses and optimize earnings.

What are the types of inventory management systems?

types of inventory management

There are two main types of inventory management systems: 

Perpetual inventory system

The perpetual inventory system requires businesses to implement supporting software and equipment so it is more costly than a periodic inventory system. On the other hand, it helps to update inventory statistics on a regular basis and in real-time. This inventory control method uses point-of-sale and asset management software to determine inventory based on sales and purchases. Therefore, you’ll always have precise stock-on-hand accounting whenever you need and continuous tracking also helps the business avoid stockouts.

However, there are still some drawbacks with the system since it is run by equipment and software. Equipment with errors and improperly scanned items can affect the inventory records. Besides, there are some cases that can not be recognized by the system such as breakage, stolen goods. 

Periodic inventory system

The periodic inventory system is suitable for small businesses since it does not require complex software. It relies on physical counts of inventories on a regular or irregular basis. Business owners just keep track of all transactions in the purchase account. Once the physical inventory is completed, the balance in the purchase account is transferred to the inventory account. Finally, you match the cost of the ending stock to the inventory account. There are 2 methods of calculating the cost of inventory: FIFO means the first stock is the one sold first, and LIFO means the last stock is the one sold first.

The disadvantages of a periodic inventory system come from the physical count of stock. It will obviously increase the cost of labor because businesses have to hire more staff and pay more working time. In addition, there is a huge chance of inventory discrepancies and fraud.

Read more: What is a physical inventory count? Definition and 5 best practices


In general, inventory management can affect the success or failure of a business. Having proper visibility into your stock at any required moment is essential for success. In order to get real-time and informative inventory reports to make the plan for the business, it is important to apply the right inventory control procedures, together with suitable support tools and software.

Author Kate N.

More posts by Kate N.

Join the discussion One Comment

  • Frank says:

    I wanted to express my sincere gratitude for sharing your perspective on types of inventory management. In my experience, inventory management is a critical aspect of supply chain optimization, and various types cater to diverse business needs. Just-in-Time (JIT) inventory focuses on minimizing excess stock, ensuring materials arrive precisely when needed. This method enhances efficiency and reduces carrying costs, exemplified by companies like Toyota, which pioneered JIT to streamline production processes.
    On the other hand, ABC analysis categorizes inventory into classes based on value, allowing businesses to prioritize items for control and focus efforts on high-value products. This approach is exemplified by Amazon, utilizing sophisticated algorithms to prioritize the storage and retrieval of items based on demand patterns.
    Striking a balance between these and other inventory management types is essential, as businesses aim for optimal stock levels, cost-efficiency, and enhanced customer satisfaction. The diversity in inventory management approaches allows companies to tailor strategies to their unique operational requirements and industry dynamics.

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