Financial Data
Updated 21 Jun 2018

Do you have it in stock? Top 3 Inventory management techniques

In any warehouse, management of stock is essential and without the correct processes in place, production lines can be halted, deadlines missed and huge financial losses can result. 

Shermandra Singh, 08 March 2017  Share  0 comments  Print

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If you overstock materials, this large investment of cash is tied up until the item is sold or used in production. Real success lies in overseeing and controlling the ordering, storage and usage of inventory, ensuring that the right stock is available in the right quantities when it’s needed.

Here are a few commonly used practices to keep stock coming and going in a steady and efficient flow:

1. Just-in-time inventory management

This practice involves an on-demand approach in which materials are only ordered or produced when the need arises.

Related: Important inventory management insights you can’t afford to overlook

This offers cost-saving benefits because stock storage is kept to a minimum and the need to discard unused inventory is largely removed. The key to this system’s success is the close collaboration between all companies within the supply chain to ensure inventory availability. 

To prevent stock shortages careful planning is needed, taking sales trends and seasonal fluctuations into account.

2. ABC Analysis 

This is a system used to classify items according to their value so that energy is focused on the products that bring in the highest income or greatest use potential. Using this method, you can pin down the items that are vital to have in stock at all times and reduce the frequency of re-ordering.

Stock is broken down into three categories:

  • Class A items are the most valuable and popular, accounting for 70-80% of your sales or usage. These items are often costly and require tight control and monitoring. A-list products have a high re-ordering frequency to ensure adequate supply. 
  • Class B items are of moderate importance, accounting for 10-20% of your revenue or input. Less regular restocking is needed, but often there are larger quantities in stock as they often have a lower value than class-A items. 
  • Class C items are then the smaller items that contribute to just 10% of your income or production. Using ABC analysis, stock planners are able to do more accurate demand forecasting to manage stock levels.

Related: Supply chain management for business growth 

3. Inventory Management Software

Every warehouse has to conduct regular stock audits to keep a tally of inventory levels. Manual stock-takes are time-consuming and result in human error. Through the use of technologies such as barcodes, RFID and inventory management software, stock reviews can become a simple, accurate process. Inventory management software gives a real-time overview of stock quantities and where they are in the supply chain process.

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About the author

Shermandra Singh

Shermandra is the business development director for Dovetail Business Solutions. He has over twenty-two years of software experience with multinational companies in various logistics and supply chain verticals. With a deep understanding of the industry and years of experience, he is responsible for identifying industry needs and ensuring that the Dovetail Solution Suite meets clients’ visions and expectations. Shermandra regularly contributes thought leadership articles to industry publication, lectures at universities and acts as guest speaker at industry events to educate the industry regarding, challenges and opportunities in the world of Logistics and IT.  Visit:

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