Stock…Required, not desired. Stock means that your capital is stuck within materials, parts, items that cost money to buy but also cost money to keep in stock. However, not having something in stock might turnout to be even more expensive as you will have to sell ‘no’ to your customer. The general goal is to only have what you need when you need it, however this is easier said than done.

Only when you are completely in control of the stock, is when you can achieve the best possible outcome. Controlling the stock means you know what is in stock and where it is. But this also entails knowing exactly when new goods are coming in and having a clear picture of how long it takes to process the goods into stock. The outbound side will also have to be controlled/monitored, knowing your customers ordering patterns and exceptions to these patterns. In order to manage this you need to have a good collaboration between Purchase, Logistics and Sales. This collaboration can take shape in the form of a S&OP (Sales & Operations Planning).

Unfortunately, even with the best processes in place there will always be some obsolete stock, however the goal is to keep this to a minimum. This means monitoring things like Deadstock, Overstock, Expired stock and taking actions on good stock before it becomes obsolete. You can read more about these types on analysis in our Knowledge Base.