Back to top

Stock and Inventory Management for Large Businesses: Help and Advice

Shrinkage can be a real problem for a lot of businesses, when products go missing between the stages of manufacturing and sale, resulting in a financial loss.

This can be due to staff or customer theft, as well as administrative errors. For large businesses this will usually mean higher amounts are lost, even if it has a lower impact on overall profits.

Large businesses also have a lot more stock to lose. If you run a big business, then having effective inventory management processes in place is essential to minimise such financial losses. There are many ways to improve inventory and stock management to reduce the chance of shrinkage occurring in your business.

Treat Stock Like Investments

Managing stock is as important as running your business’ bank accounts, as it is the sales of these products that helps your company to keep growing. Therefore, they should be treated with the same amount of detail and respect as the money in the bank.

If you run weekly or monthly bank account assessments, or spend a certain amount of time going over their records, then do the same with stock and inventory. This should help highlight any problems or issues that can be dealt with early on, before they get any bigger.  

Utilise Software

The largest companies need an efficient inventory management system in place, as they will likely have warehouses, factories and other facilities with stock in numerous locations. In order to stay on top of stock levels across the entire company, one of the most popular inventory management techniques is to use inventory planning software.

This reduces the chance of human error and makes it a lot easier to keep track of all the incoming and outgoing stock across the entire business. It also helps for inventory planning, by highlighting any areas or facilities that are running low.

Check Stock Inwards

When it comes to physically checking stock, it is essential that everything that is delivered is matched against what was ordered. Simply assuming all the products your business ordered have arrived is the first step to shrinkage and stock level problems.

It is estimated that between 1 and 2% of stock orders are packed incorrectly, which for big businesses making large orders can lead to a huge financial loss. Therefore, everything that comes in must be matched against what is ordered, as even having too much will require the business to reduce prices at one point to shift the excess stock.  

Store and Label Efficiently

Every large business should have an inventory management system in place so that stock is stored and looked after in the most efficient manner, no matter what the company’s size. When dealing with a lot of similar products, it can be hard to differentiate between the packaging for some items, so storing them next to each other will lead to mistakes.

Having different coloured labels for those of varying sizes is one of the best stock management techniques, so those moving them can quickly and easily tell the difference. Organise stock in a sensible manner and ensure it is all easy to identify to cut down on any potential mistakes.  

Set Minimum Levels

Running out of stock will also lead to financial problems, so setting minimum levels and sticking to them is vital. Not having enough stock to sell will result in lower profits for the business and dissatisfied customers who may seek to take their business elsewhere.

Calculate how long it takes for each type of product to run out, delivery times of suppliers and how much stock you will need in reserve (plus a little extra to be safe) to avoid running out. At least with too much stock it can be reduced and still sold, whereas with no stock there is nothing to sell and no business to run.

Have a Backup Plan

Despite all the best inventory planning, there are always things that can go wrong in your business’ inventory management system. Consider the worst things that could happen to your stock and come up with an effective plan of action should any of these things occur.

It could be as simple as saving a secondary copy of your asset inventory documents on a memory stick, to more complex plans that involve having backup suppliers on hand if an emergency delivery is needed.

Use these inventory management techniques to ensure that the stock management at your large business goes to plan.