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{{see also|Stock management}}
{{see also|Stock management}}
{{refimprove|date=October 2016}}


'''Inventory control''' or '''stock control''' can be broadly defined as "the activity of checking a shop’s stock."<ref name="MacDiction">{{cite web |url=https://www.macmillandictionary.com/dictionary/british/stock-control |title=stock control |work=Macmillan Dictionary |publisher=Macmillan Publishers Limited |accessdate=21 June 2018}}</ref> However, a more focused definition takes into account the more science-based, methodical practice of not only verifying a business' inventory but also focusing on the many related facets of inventory management (such as forecasting future demand) "within an organisation to meet the demand placed upon that business economically."<ref name="LewisDemand12">{{cite book |url=https://books.google.com/books?id=NOOmR2D88Q0C |chapter=Chapter 1: Demand forecasting and inventory control |title=Demand Forecasting and Inventory Control |author=Lewis, C. |publisher=Routledge |page=3–20 |year=2012 |isbn=9781136346835}}</ref> Other facets of inventory control include [[supply chain management]], [[production control]], financial flexibility, and customer satisfaction.<ref name="AxsäterInventory15-1">{{cite book |url=https://books.google.com/books?id=v9YjCgAAQBAJ&pg=PA1 |chapter=Chapter 1: Introduction |title=Inventory Control |author=Axsäter, S. |publisher=Springer |page=1–6 |year=2015 |isbn=9783319157290}}</ref> At the root of inventory control, however, is the [[inventory control problem]], which involves determining when to order, how much to order, and the logistics (where) of those decisions.<ref name="AxsäterInventory15-1" />
In one sentence inventory control is nothing but to give uninterrupted service towards the Production / Sales /Maintenance etc. with minimum stock.Inventory control is an important aspect for the growth of company. Stores inventory is the heart of an industry
'''Inventory control''' or '''stock control''' can be broadly defined as "the activity of checking a shop’s stock".<ref>{{cite web|url=http://www.macmillandictionary.com/dictionary/british/stock-control|title=stock control - definition|publisher=Macmillan Dictionary|accessdate=1 September 2013}}</ref> More specifically [[inventory]] control may refer to:


An extension of inventory control is the inventory control system. This may come in the form of a technological system and its programmed software used for managing various aspects of inventory problems<ref name="AxsäterInventory15-2">{{cite book |url=https://books.google.com/books?id=v9YjCgAAQBAJ&pg=PA7 |chapter=Chapter 2: Forecasting |title=Inventory Control |author=Axsäter, S. |publisher=Springer |page=7–35 |year=2015 |isbn=9783319157290}}</ref> , or it may refer to a methodology (which may include the use of technological barriers) for handling [[loss prevention]] in a business.<ref name="HayesRetail14">{{cite book |url=https://books.google.com/books?id=MEGjBQAAQBAJ&pg=PA30 |title=Retail Security and Loss Prevention |author=Hayes, R. |publisher=Butterworth-Heinemann |page=30 |year=2014 |isbn=9781483296005}}</ref><ref name="WesleyAGuide16">{{cite book |url=https://books.google.com/books?id=pA4SBQAAQBAJ&pg=PA81 |title=A Guide to Internal Loss Prevention |author=Wesley, R.L.; Wanat, J.A. |publisher=Elsevier |pages=81–3 |year=2016 |isbn=9781483135731}}</ref>
*In [[operations management]], [[logistics]] and [[supply chain management]], the technological system and the programmed software necessary for managing inventory
*In [[economics]] and [[operations management]], the [[inventory control problem]], which aims to reduce overhead cost without hurting sales. It answers the 3 basic questions of any supply chain: When? Where? How much?
*In the field of [[loss prevention]], systems designed to introduce technical barriers to [[shoplifting]]


⚫
==Inventory control systems==
==Systems==
[[Image:HDWR HD2000 Wireless Barcode Reader.png|thumb|Wireless barcoder reader with [[docking station]]]]An inventory control system is used to keep inventories in a desired state while continuing to adequately supply customers<ref name="ChorafasSystems65">{{cite book |chapter=Chapter 13: Specifications for Inventory Control |title=Systems and Simulation |editor=Chorafas, D.N. |publisher=Elsevier |pages=233–52 |isbn=9780123749185 |doi=10.1016/S0076-5392(09)60019-9}}</ref><ref name="AxsäterInventory15-11">{{cite book |url=https://books.google.com/books?id=v9YjCgAAQBAJ&pg=PA223 |chapter=Chapter 11: Implementation |title=Inventory Control |author=Axsäter, S. |publisher=Springer |page=223–34 |year=2015 |isbn=9783319157290}}</ref>, and its success depends on maintaining clear records on a periodic or perpetual basis.<ref name="AxsäterInventory15-11" /><ref name="WildEssentials02">{{cite book |url=https://books.google.com/books?id=B5j4D0U6QA0C&pg=PA333 |title=Essentials of Operations Management |author=Wild, R. |publisher=Cengage Learning |pages=332–3 |year=2002 |isbn=9781844800520}}</ref>
Inventory control is also about knowing where all stock is and ensuring everything is accounted for at any given time.{{citation needed|date=October 2016}} An ''inventory control system or a computerized inventory system'' is a process for managing and locating objects or materials.{{citation needed|date=October 2016}} In common usage, the term may also refer to just [[inventory management software|the software components]]. Many shops now use stock control systems. The term "stock control system" can be used to include various aspects of controlling the amount of stock on the shelves and in the stockroom and how reordering happens. Typical features of stock control software include:{{citation needed|date=October 2016}}


[[Inventory management software]] often plays an important role in the modern inventory control system, providing timely and accurate analytical, optimization, and forecasting techniques for complex inventory management problems.<ref name="AzadivarOperations16">{{cite book |url=https://books.google.com/books?id=JSCHFC9zaD4C&pg=SA10-PA34 |chapter=10.6 Inventory Management in Practice |title=Operations Research and Management Science Handbook |author=Azadivar, F.; Rangarajan, A. |editor=Ravindran, A.R. |publisher=CRC Press |pages=10-34–10-35 |year=2016 |isbn=9781420009712}}</ref><ref name="DonathIOMA02">{{cite book |url=https://books.google.com/books?id=G8E5bMwTrBQC&pg=PA505 |chapter=Part II Inventory Management - Chapter 4: Software and Technology |title=The IOMA Handbook of Logistics and Inventory Management |editor=Donath, B.; Mazel, J.; Dubin, C.; Patterson, P. |publisher=John Wiley & Sons |pages=504–38 |year=2002 |isbn=9780471209355}}</ref> Typical features of this type of software include<ref name="AxsäterInventory15-11" /><ref name="DonathIOMA02" />:
*Ensuring that the [[Product (business)|products]] are on the shelf in shops in just the right quantity.
*Recognizing when a [[customer]] has bought a product.
*Automatically signaling when more products need to be put on the [[Shelf (storage)|shelf]] from the stockroom.
*Automatically reordering stock at the appropriate time from the main [[warehouse]].
*Automatically producing management information reports that could be used both by local managers and at [[head office]].


* inventory tracking and forecasting tools that use selectable algorithms and review cycles to identify anomalies and other areas of concern
⚫
These might detail what has sold, how quickly and at what [[price]], for example. Reports could be used to predict when to stock up on extra products, for example, at [[Christmas]] or to make decisions about [[special offer]]s, discontinuing products and so on.
⚫
* [[inventory optimization]]
Sending reordering information not only to the warehouse but also directly to the [[factory]] producing the products enables them to optimize production.
* purchase and replenishment tools that include automated and manual replenishment components, inventory calculations, and lot size optimization
* lead time variability management
* safety stock calculation and forecasting
* inventory cost management
* shelf-life and slow-mover logic
* multiple location support


⚫
Through this functionality, a business may better detail what has sold, how quickly, and at what [[price]], for example. Reports could be used to predict when to stock up on extra products around a holiday or to make decisions about [[special offer]]s, discontinuing products, and so on.
[[Image:HDWR HD2000 Wireless Barcode Reader.png|thumb|Wireless barcoder reader with [[docking station]].]]


Modern inventory control systems often rely upon [[barcode]]s and [[radio-frequency identification]] (RFID) tags to provide automatic identification of inventory objects. Inventory objects could include any kind of physical asset: [[merchandise]], [[consumable]]s, [[fixed asset]]s, circulating tools, library books, or [[capital equipment]]. To record an inventory transaction, the system uses a [[barcode scanner]] or RFID reader to automatically identify the inventory object, and then collects additional information from the operators via fixed [[Computer terminal|terminal]]s ([[workstation]]s), or [[mobile computer]]s.{{citation needed|date=October 2016}} The new trend in inventory management is to label inventory and assets with [[QR Code]], and use [[smart-phone]]s to keep track of inventory count and movement. These new systems are especially useful for field service operations, where an employee needs to record inventory transaction or look up inventory stock in the field, away from the computers and hand-held scanners.
Inventory control techniques often rely upon [[barcode]]s and [[radio-frequency identification]] (RFID) tags to provide automatic identification of inventory objects—including but not limited to [[merchandise]], [[consumable]]s, [[fixed asset]]s, circulating tools, library books, and [[capital equipment]]—which in turn can be processed with inventory management software.<ref name="GulatiMaint09">{{cite book |url=https://books.google.com/books?id=igFCp-nz1n8C&pg=PA122 |title=Maintenance and Reliability Best Practices |author=Gulati, R.; Smith, R. |publisher=Industrial Press, Inc |pages=122–4 |year=2009 |isbn=9780831133115}}</ref> A new trend in inventory management is to label inventory and assets with a [[QR Code]], which can then be read with [[smart-phone]]s to keep track of inventory count and movement.<ref name="PantanoInternet17">{{cite book |url=https://books.google.com/books?id=kmyuDQAAQBAJ&pg=PT301 |title=Internet Retailing and Future Perspectives |author=Pantano, E.; Nguyen, B.; Dennis, C. et al. |publisher=Routledge |page=PT301 |year=2017 |isbn=9781317378761}}</ref> These new systems are especially useful for field service operations, where an employee needs to record inventory transaction or look up inventory stock in the field, away from the computers and hand-held scanners.


===Advantages and disadvantages===
==Advantages and disadvantages==
Inventory control systems have advantages and disadvantages, based on what style of system is being run. A purely periodic (physical) inventory control system takes "an actual physical count and valuation of all inventory on hand ... at the close of an accounting period,"<ref name="DopsonFood15">{{cite book |url=https://books.google.com/books?id=yxotCgAAQBAJ&pg=PA115 |title=Food and Beverage Cost Control |author=Dopson, L.R.; Hayes, D.K. |publisher=John Wiley & Sons |pages=115–17 |year=2015 |isbn=9781118988497}}</ref> whereas a perpetual inventory control system takes an initial count of an entire inventory and then closely monitors any additions and deletions as they occur.<ref name="DopsonFood15" /><ref name="WildEssentials02" /> Various advantages and disadvantages, in comparison, include:
Stock control systems ensure that shelves are appropriately stocked. If there is too much stock, it ties up a company's money, money that might be better spent on reducing their [[overdraft]], on [[advertising]] the [[business]] or on paying for better facilities for customers, for example. Too much stock means that some [[Shelf life|perishable products]] might not sell and would have to be thrown away and this would reduce a stock control system outweigh the disadvantages.


* Periodic is technically the more accurate as it considers both counted and valued inventory.<ref name="DopsonFood15" />
⚫
==Inventory optimization==
* Periodic is more time-consuming than perpetual.<ref name="DopsonFood15" />

* Perpetual can lower the cost of carrying inventory vs. periodic.<ref name="WildEssentials02" />
⚫
{{Main|Inventory optimization}}
* Perpetual is typically more costly to run than periodic.<ref name="WildEssentials02" />

* Perpetual needs to be verified from time to time against an actual physical count, due to human error, theft, and other variables.<ref name="DopsonFood15" /><ref name="WallerTheDef14">{{cite book |url=https://books.google.com/books?id=cq8_AwAAQBAJ&pg=150 |title=The Definitive Guide to Inventory Management: Principles and Strategies for the Efficient Flow of Inventory Across the Supply Chain |author=Waller, M.A.; Esper, T.L. |publisher=Pearson Education |pages=150–1 |year=2014 |isbn=9780133448825}}</ref>
Inventory optimization is a method of balancing capital investment constraints or objectives and service-level goals over a large assortment of [[stock-keeping unit]]s (SKUs) while taking demand and supply volatility into account.

==Inventory management software==

{{Main|Inventory management software}}

Inventory management software is a computer-based system for tracking inventory levels, [[Order (business)|order]]s, [[Sales|sale]]s and [[Delivery (commerce)|deliveries]]. It can also be used in the manufacturing industry to create a [[work order]], [[bill of materials]] and other production-related documents. Companies use inventory management software to avoid product overstock and outages. It is a tool for organizing inventory data that before was generally stored in hard-copy form or in [[spreadsheet]]s. It is often associated with and is similar to distribution software, as distributors that can compete with less cash tied up in inventories have a distinct advantage over their competitors.


== See also ==
== See also ==

Revision as of 19:40, 21 June 2018

See also: Stock management

Inventory control or stock control can be broadly defined as "the activity of checking a shop’s stock."[1] However, a more focused definition takes into account the more science-based, methodical practice of not only verifying a business' inventory but also focusing on the many related facets of inventory management (such as forecasting future demand) "within an organisation to meet the demand placed upon that business economically."[2] Other facets of inventory control include supply chain management, production control, financial flexibility, and customer satisfaction.[3] At the root of inventory control, however, is the inventory control problem, which involves determining when to order, how much to order, and the logistics (where) of those decisions.[3]

An extension of inventory control is the inventory control system. This may come in the form of a technological system and its programmed software used for managing various aspects of inventory problems[4] , or it may refer to a methodology (which may include the use of technological barriers) for handling loss prevention in a business.[5][6]

Inventory control systems

Wireless barcoder reader with docking station

An inventory control system is used to keep inventories in a desired state while continuing to adequately supply customers[7][8], and its success depends on maintaining clear records on a periodic or perpetual basis.[8][9]

Inventory management software often plays an important role in the modern inventory control system, providing timely and accurate analytical, optimization, and forecasting techniques for complex inventory management problems.[10][11] Typical features of this type of software include[8][11]:

  • inventory tracking and forecasting tools that use selectable algorithms and review cycles to identify anomalies and other areas of concern
  • inventory optimization
  • purchase and replenishment tools that include automated and manual replenishment components, inventory calculations, and lot size optimization
  • lead time variability management
  • safety stock calculation and forecasting
  • inventory cost management
  • shelf-life and slow-mover logic
  • multiple location support

Through this functionality, a business may better detail what has sold, how quickly, and at what price, for example. Reports could be used to predict when to stock up on extra products around a holiday or to make decisions about special offers, discontinuing products, and so on.

Inventory control techniques often rely upon barcodes and radio-frequency identification (RFID) tags to provide automatic identification of inventory objects—including but not limited to merchandise, consumables, fixed assets, circulating tools, library books, and capital equipment—which in turn can be processed with inventory management software.[12] A new trend in inventory management is to label inventory and assets with a QR Code, which can then be read with smart-phones to keep track of inventory count and movement.[13] These new systems are especially useful for field service operations, where an employee needs to record inventory transaction or look up inventory stock in the field, away from the computers and hand-held scanners.

Advantages and disadvantages

Inventory control systems have advantages and disadvantages, based on what style of system is being run. A purely periodic (physical) inventory control system takes "an actual physical count and valuation of all inventory on hand ... at the close of an accounting period,"[14] whereas a perpetual inventory control system takes an initial count of an entire inventory and then closely monitors any additions and deletions as they occur.[14][9] Various advantages and disadvantages, in comparison, include:

  • Periodic is technically the more accurate as it considers both counted and valued inventory.[14]
  • Periodic is more time-consuming than perpetual.[14]
  • Perpetual can lower the cost of carrying inventory vs. periodic.[9]
  • Perpetual is typically more costly to run than periodic.[9]
  • Perpetual needs to be verified from time to time against an actual physical count, due to human error, theft, and other variables.[14][15]

See also

References

  1. ^ "stock control". Macmillan Dictionary. Macmillan Publishers Limited. Retrieved 21 June 2018.
  2. ^ Lewis, C. (2012). "Chapter 1: Demand forecasting and inventory control". Demand Forecasting and Inventory Control. Routledge. p. 3–20. ISBN 9781136346835.
  3. ^ a b Axsäter, S. (2015). "Chapter 1: Introduction". Inventory Control. Springer. p. 1–6. ISBN 9783319157290.
  4. ^ Axsäter, S. (2015). "Chapter 2: Forecasting". Inventory Control. Springer. p. 7–35. ISBN 9783319157290.
  5. ^ Hayes, R. (2014). Retail Security and Loss Prevention. Butterworth-Heinemann. p. 30. ISBN 9781483296005.
  6. ^ Wesley, R.L.; Wanat, J.A. (2016). A Guide to Internal Loss Prevention. Elsevier. pp. 81–3. ISBN 9781483135731.{{cite book}}: CS1 maint: multiple names: authors list (link)
  7. ^ Chorafas, D.N. (ed.). "Chapter 13: Specifications for Inventory Control". Systems and Simulation. Elsevier. pp. 233–52. doi:10.1016/S0076-5392(09)60019-9. ISBN 9780123749185.
  8. ^ a b c Axsäter, S. (2015). "Chapter 11: Implementation". Inventory Control. Springer. p. 223–34. ISBN 9783319157290.
  9. ^ a b c d Wild, R. (2002). Essentials of Operations Management. Cengage Learning. pp. 332–3. ISBN 9781844800520.
  10. ^ Azadivar, F.; Rangarajan, A. (2016). "10.6 Inventory Management in Practice". In Ravindran, A.R. (ed.). Operations Research and Management Science Handbook. CRC Press. pp. 10-34–10-35. ISBN 9781420009712.{{cite book}}: CS1 maint: multiple names: authors list (link)
  11. ^ a b Donath, B.; Mazel, J.; Dubin, C.; Patterson, P., ed. (2002). "Part II Inventory Management - Chapter 4: Software and Technology". The IOMA Handbook of Logistics and Inventory Management. John Wiley & Sons. pp. 504–38. ISBN 9780471209355.{{cite book}}: CS1 maint: multiple names: editors list (link)
  12. ^ Gulati, R.; Smith, R. (2009). Maintenance and Reliability Best Practices. Industrial Press, Inc. pp. 122–4. ISBN 9780831133115.{{cite book}}: CS1 maint: multiple names: authors list (link)
  13. ^ Pantano, E.; Nguyen, B.; Dennis, C.; et al. (2017). Internet Retailing and Future Perspectives. Routledge. p. PT301. ISBN 9781317378761. {{cite book}}: Explicit use of et al. in: |author= (help)CS1 maint: multiple names: authors list (link)
  14. ^ a b c d e Dopson, L.R.; Hayes, D.K. (2015). Food and Beverage Cost Control. John Wiley & Sons. pp. 115–17. ISBN 9781118988497.{{cite book}}: CS1 maint: multiple names: authors list (link)
  15. ^ Waller, M.A.; Esper, T.L. (2014). The Definitive Guide to Inventory Management: Principles and Strategies for the Efficient Flow of Inventory Across the Supply Chain. Pearson Education. pp. 150–1. ISBN 9780133448825.{{cite book}}: CS1 maint: multiple names: authors list (link)
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