How To Improve Inventory Control

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How To Improve Inventory Control

The term “inventory control” is not a synonym for “inventory management” as many in the warehousing industry mistakenly believe. Inventory control refers to specific aspects of the overall organization, tracking, and management of inventory. In a nutshell, inventory control is “stock control”, and its core purpose is to regulate and maximize a company’s warehouse inventory.

Inventory control focuses on the operational aspects of warehouse management, which encompasses scanning new items into the system in real-time from the warehouse floor and tracking shifts in inventory as items are plucked from the warehouse and either assembled or packaged for order fulfillment.

By contrast, inventory management handles the “bird’s eye view” of the highest level of inventory oversight, which goes beyond tracking inventory quantities of raw materials and stocked goods, and includes inventory forecasting, managing multiple facilities, and tracking units as items are assembled into finished products during the manufacturing process.

Also, a properly implemented warehouse inventory management system provides automation options that can greatly simplify many operational aspects at the warehouse, including generating inventory reports.

Warehouse management software typically includes inventory management tools, but it might not be obvious to a business owner how to use those inventory management tools for the specific purpose of controlling inventory within the warehouse. Inventory control is meant to track a lot of “moving parts”—literally—as parts are assembled into units, as orders are fulfilled, and finally as packaged goods are shipped out to customers, if not transferred to storage.

In this article, we will go over key features within your inventory management software that, when used correctly, can help warehouses improve their inventory control. Our inventory specialists have developed methods to help warehouse managers get the most out of their inventory management software. We’ve reviewed those methods and compiled a list of techniques for your reference.

warehouse inventory management


When warehouse managers use inventory control technology in conjunction with their inventory management software, the end result is an increase in company revenue. A solid inventory tracking system will lead to financial benefits because inventory control technology has the power to streamline operational processes, from improving managerial administrative efficiencies to quickening the entire order fulfillment cycle on the warehouse floor. The key inventory control tools to implement for accurate, real-time inventory control are barcode scanners and RFID tags.


Maintaining accurate inventory levels is the result of carefully balancing consumer demand and supplier reliability. In order to balance the two, warehouse managers must accurately calculate the reorder point of every item the company sells. Warehouses that have calculated those reorder points are able to meet consumer demand without running out of products, while at the same time avoiding overstocking their shelves. The “reorder point”, by definition, is an item’s minimum unit quantity that triggers automatic inventory replenishment.

Reorder Point Formula


A proper reorder point formula takes into account lag times associated with assembly, shipping, and delivery. Comprehensive inventory management software will include key inventory control features that allow you to calculate and set your reorder points within the system. This way, reordering becomes an automated rather than manual process, which helps eliminate human error and oversight. Though a manager will need to “accept” those calculated reorder points as part of the software’s inventory items setup process upon entering each item, once that data has been plugged in, the WMS will send reorder notifications to the appropriate supervisors or managers to let them know that a specific product quantity has triggered a reorder.


Economic order quantity, or EOQ, relates to the reorder points that a warehouse will need to calculate in order to improve inventory control. In essence, the EOQ is the ideal on-hand quantity of an item or product that the warehouse should aim to maintain at all times. This optimum inventory level, once calculated and maintained, will help to minimize the costs of both ordering and storing the item. Before you can calculate EOQ, you’ll need to have pulled the following figures: the annual fixed costs of all inventory items, the demand in units for all inventory items, and the carrying costs per unit for all inventory items.

Economic order quantity


While you’re welcome to use the EOQ-per-product equation we’ve provided, we don’t actually recommend that you do. Choosing the right inventory management software and utilizing the inventory control features that come with it, namely the reorder points feature, will automatically handle your economic order quantities, which will directly improve the organizational control you are able to exercise at your warehouse. Other critical elements that impact organizational control of your inventory include labeling your stock with SKUs and mapping your warehouse inventory within the software so that your warehouse workers are able to quickly and efficiently pull items during order fulfillment.


Quality control, or QC, is an integral aspect of customer satisfaction. Without dedicating a portion of your operational efforts to ensuring that the items you warehouse are of the highest possible quality, your company’s reputation could suffer in the long term. Manufacturers typically conduct mandatory quality assessment checks either periodically or just prior to starting a production project. Though QC is a manual, hands-on process, the warehouse inventory software used at the company’s facility will still play a role. During a QC assessment, if any item fails the quality test, then that item can be marked “On Hold” within the software. This way, the faulty item can’t be sold to customers or used during production until the item has been fixed.

Quality control


Accurately differentiating between items that are “stocked” versus “non-stocked” is one of the most critical aspects of inventory control. These terms have nothing to do with whether or not an item is housed within your warehouse. Rather, these are accounting terms that will ultimately simplify your financials and reporting. A “stocked” item refers to a traditional inventory item that will reflect on your company’s Balance Sheet as an asset. A “non-stocked” item, because it’s typically “bought and sold” quickly, will impact your company’s Profit & Loss Statement as either an expense or a COGS. Designating the classification “stocked” or “non-stocked” to each inventory item within your software should be done when you first enter the item, along with all of its pertinent information, into the system.


Performing regular audits is another important process for managers that want to maintain inventory control at their warehouse. Warehousing high levels of inventory stock generally leads to overstocking, an unnecessary expense that impacts cash flow. Measurable costs are associated with shelving items, and depending on whether those items are classified as “stocked” or “non-stocked”, your financial reporting could end up appearing inaccurate or “off”. The key, as we mentioned earlier when we covered EOQ, is to only warehouse an optimal quantity of each item, not too much and not too little. Your inventory management software is your best tool for conducting inventory audits in an efficient, streamlined manner.

Inventory Management System

In order to best support your overall warehouse and inventory management, your inventory control system must include:

• Barcode Scanner Integration

• Reorder Reports & Adjustments

• Product Details, Histories, & Locations

• Comprehensive Inventory Lists & Counts

• Variants for Bundles & Kitting

• Syncing to Link On-Hand Stock with Sales Orders & Purchase Orders

Direct Integration with Accounting System & SoftwareFor additional guidelines to help you select the most appropriate WMS for your business, be sure to read our article How to Choose the Best Inventory Management Tools, and for improving the overall customer service at your business, we recommend How Warehouse Management Impacts Customer Service. As always, be sure to hit the “subscribe” button, sign up for our newsletter, and be the first to know when we publish valuable content relevant to warehouse management systems and inventory management software features. FTx Solutions offers software and hardware systems, including a full suite of inventory management tools, that can handle every aspect of your business from your Warehouse Inventory Management to your Point-of-Sale system. Empower your warehouse managers with FTx Handheld, a wireless device that lets users perform real-time inventory counts and adjustments.Our solutions come with a centralized dashboard control center called Director that can serve as the organizational hub of your warehouse facility. Want to learn more about what FTx can do for you? Contact us today to speak with a WMS specialist!

Danielle Dixon

Danielle is a content writer at FTx POS. She specializes in writing about all-in-one, cutting-edge POS and business solutions that can help companies stand out. In addition to her passions for reading and writing, she also enjoys crafts and watching documentaries.

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