{"id":7136,"date":"2025-05-14T08:17:37","date_gmt":"2025-05-14T08:17:37","guid":{"rendered":"https:\/\/sblog.seebiz.com\/blog\/?p=7136"},"modified":"2025-05-16T06:05:23","modified_gmt":"2025-05-16T06:05:23","slug":"what-is-inventory-control","status":"publish","type":"post","link":"https:\/\/sblog.seebiz.com\/blog\/what-is-inventory-control\/","title":{"rendered":"What Is Inventory Control? Key Types &#038; Strategies"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Inventory Control, also known as Stock Control, is the process by which a business controls and manages the inventory to ensure that the right amount of stock is available in the warehouse<\/span><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here\u2019s an example to better understand this concept. Suppose during inventory counting, a business discovers that a particular product has been sitting in the warehouse for a long time and its expiry date is near.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To clear this stock, businesses can do multiple things, like putting a discount on it to sell quickly, bringing it forward in the warehouse to increase visibility, etc.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This may have caused some confusion between inventory control and inventory management. Let\u2019s clear it up first before moving forward.\u00a0<\/span><\/p>\n<h2><b>Difference Between Inventory Control and Inventory Management<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Below are some ways that show the differences between inventory control and inventory management:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The scope of inventory control is limited to the available inventory in the warehouse. In contrast, the scope of inventory management is broad as it starts with the raw material and ends with the finished products. This means that inventory management deals with the entire production process.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">There are two main goals of inventory control. One is to ensure that the warehouse has enough inventory, and the other goal is to ensure that this inventory is of optimal quality.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">On the other hand, the goal of inventory management is to ensure that the right inventory in the right amount is available at the right location at the right time.\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Inventory control is concerned with what products are available at the warehouse, where they are located in the warehouse, and their condition. On the other hand, the concerns of <a href=\"https:\/\/www.seebiz.com\/blog\/inventory-management-system\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"exclude\">inventory management<\/a> are related to which products, in what amount, and at what time should be ordered.\u00a0<\/span><\/li>\n<\/ul>\n<h2><b>Types of Inventory Control Systems<\/b><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-7137 size-full\" src=\"https:\/\/sblog.seebiz.com\/blog\/wp-content\/uploads\/2025\/05\/Inventory-Control-and-it-types.webp\" alt=\"Inventory-Control-and-it-types\" width=\"740\" height=\"740\" srcset=\"https:\/\/sblog.seebiz.com\/blog\/wp-content\/uploads\/2025\/05\/Inventory-Control-and-it-types.webp 740w, https:\/\/sblog.seebiz.com\/blog\/wp-content\/uploads\/2025\/05\/Inventory-Control-and-it-types-300x300.webp 300w, https:\/\/sblog.seebiz.com\/blog\/wp-content\/uploads\/2025\/05\/Inventory-Control-and-it-types-150x150.webp 150w, https:\/\/sblog.seebiz.com\/blog\/wp-content\/uploads\/2025\/05\/Inventory-Control-and-it-types-100x100.webp 100w, https:\/\/sblog.seebiz.com\/blog\/wp-content\/uploads\/2025\/05\/Inventory-Control-and-it-types-450x450.webp 450w, https:\/\/sblog.seebiz.com\/blog\/wp-content\/uploads\/2025\/05\/Inventory-Control-and-it-types-120x120.webp 120w\" sizes=\"auto, (max-width: 740px) 100vw, 740px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">The following are the major types of inventory control systems:<\/span><\/p>\n<h3><b>Periodic Inventory Control System<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">A periodic inventory control system depends on a physical inventory count. This means that the inventory records are updated after a physical count, which occurs periodically. The periods of this count can be monthly, quarterly, seasonal, or annual.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The pros of using this system are that it is easier to operate and manage especially for businesses with less complex inventory needs. Individuals can enter and manage information manually.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On the other hand, a disadvantage of using this system is that it takes more time to manage and operate.<\/span><\/p>\n<h3><b>Perpetual Inventory Control System<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">If a business chooses to use the perpetual inventory control system, the inventory data will be updated in real-time as a transaction takes place. One of the advantages of using this system is that there is no need to manually enter data. This reduces the chances of errors in the data.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On the other hand, one disadvantage of using this system is that the software can be expensive to maintain. It may also not be able to detect discrepancies like product loss, theft, damaged products, or scanning mistakes.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The perpetual inventory system primarily uses the following two technologies:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Radio Frequency Identification (RFID)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Barcodes<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Below is their explanation:<\/span><\/p>\n<h4><b>Radio Frequency Identification (RFID)<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">RFID tags have information stored in them electronically, which is much more than what barcodes can store. These tags are mostly used for high-value products or those requiring additional security measures, such as pharmaceuticals.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So for businesses dealing with inventory security, RFID can present the required solution, offering ways to track the stock and prevent losses.<\/span><\/p>\n<h4><b>Barcodes<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">Barcodes <\/span><span style=\"font-weight: 400;\">are little images that are available on the packaging of the individual products or the packaging unit. This image stores p<\/span><span style=\"font-weight: 400;\">roduct information.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This information is read by a tool called a barcode scanner. These scans are carried out when a product arrives at a facility and when it leaves one.<\/span><\/p>\n<h2><b>Strategies of Inventory Control<\/b><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-7138 size-full\" src=\"https:\/\/sblog.seebiz.com\/blog\/wp-content\/uploads\/2025\/05\/What-is-Inventory-Control.webp\" alt=\"What is Inventory Control\" width=\"740\" height=\"474\" srcset=\"https:\/\/sblog.seebiz.com\/blog\/wp-content\/uploads\/2025\/05\/What-is-Inventory-Control.webp 740w, https:\/\/sblog.seebiz.com\/blog\/wp-content\/uploads\/2025\/05\/What-is-Inventory-Control-300x192.webp 300w, https:\/\/sblog.seebiz.com\/blog\/wp-content\/uploads\/2025\/05\/What-is-Inventory-Control-100x64.webp 100w, https:\/\/sblog.seebiz.com\/blog\/wp-content\/uploads\/2025\/05\/What-is-Inventory-Control-700x448.webp 700w\" sizes=\"auto, (max-width: 740px) 100vw, 740px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">These are the popular strategies of Inventory Control:<\/span><\/p>\n<h3><b>JIT Inventory<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">JIT (Just In Time) Inventory<\/span><span style=\"font-weight: 400;\"> is one of the demand-driven techniques of inventory control. In this, a business acquires inventory only when a customer places the order. This means that rather than purchasing inventory in advance, businesses only purchase after an order is placed.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Using this technique, businesses have to spend less on inventory storage. On the other hand, there is a risk of stockouts in case the shipment is not delivered \u201cjust in time.\u201d<\/span><\/p>\n<h3><b>ABC Analysis<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">ABC Analysis<\/span><span style=\"font-weight: 400;\"> is the technique of inventory control in which the stock is classified based on its importance and value to the business. This value is calculated using the price per unit and annual demand of the products.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The A-category products are of the highest value, and the C-category products are of the lowest value to the business. Implementing this technique can help businesses maximize profits by enhancing the focus on category-A products.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This can also decrease the <\/span><span style=\"font-weight: 400;\">inventory holding cost<\/span><span style=\"font-weight: 400;\"> by managing category-C products.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Safety Stock<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Keeping a <\/span><span style=\"font-weight: 400;\">safety stock<\/span><span style=\"font-weight: 400;\"> is an excellent technique for inventory control. Safety stock is a surplus stock that businesses keep at the warehouse along with the regular stock.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This is kept as a preventative measure against the volatile nature of the market. It won\u2019t become a burden if it is calculated using the correct formula and data. This is a basic formula for calculating safety stock:<\/span><\/p>\n<p><b>Safety Stock = (number of items sold per day) x (number of days worth of stock on hand)<\/b><\/p>\n<p><span style=\"font-weight: 400;\">It is supposed to provide a safety net to the business, but the <a href=\"https:\/\/www.seebiz.com\/blog\/how-to-calculate-ending-inventory\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"exclude\">wrong calculation<\/a> may also mean that the business now has excessive inventory that can become a financial burden.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">FIFO and LIFO<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">FIFO (First In, First Out)<\/span><span style=\"font-weight: 400;\"> and <\/span><span style=\"font-weight: 400;\">LIFO (Last In, First Out)<\/span><span style=\"font-weight: 400;\"> are the techniques of inventory control that decide how the inventory moves.<\/span><span style=\"font-weight: 400;\"> If a business chooses FIFO, the products that came first to the warehouse will be the ones sold first.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On the other hand, if a business chooses LIFO, the products that arrived last in the warehouse will be the ones sold first.<\/span><\/p>\n<h2><b>Tips to Improve Inventory Control<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Businesses can follow these tips to improve inventory control:<\/span><\/p>\n<h3><b>Create Warehouse Layout Plans<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Havin<\/span><span style=\"font-weight: 400;\">g an organized warehouse is essential to improving inventory control. Wa<\/span><span style=\"font-weight: 400;\">rehouse staff should know where the stock is located so that they can easily access it.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It can also help to place popular products in areas where they can be accessed quickly.<\/span><\/p>\n<h3><b>Inventory Forecasting<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Having an adequate amount of inventory can increase the control businesses have over the inventory. This can happen with <\/span><span style=\"font-weight: 400;\">inventory forecasting<\/span><span style=\"font-weight: 400;\">.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In this, a business forecasts the future inventory needs by predicting how much of a particular product will sell. Metrics such as historical sales data, market trends, and other external factors are used.<\/span><\/p>\n<h3><b>Monitor the Product Expiry Dates<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Product monitoring is essential for businesses to exert inventory control. This also includes keeping an eye on the expiry dates of products. Here, the businesses should target selling products that are nearing their expiry dates as soon as possible.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Once the expiry date is passed, the products won\u2019t sell anymore, which can create numerous challenges for businesses.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Conclusion<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Effective inventory control can become the key to a business\u2019s success. It can help to keep the right amount of inventory, fasten the cash flow, and reduce the consumption of resources on inventory, etc.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Using automated inventory control software can amplify control while reducing the errors that can occur with manual procedures.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Inventory Control, also known as Stock Control, is the process by which a business controls and manages the inventory to ensure that the right amount&#8230;<\/p>\n","protected":false},"author":1,"featured_media":7139,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[44],"tags":[],"class_list":["post-7136","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-hub"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What Is Inventory Control? 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