Warehouse Stock: Classification and Control

Warehouse stock is a critical component of logistics operations, and managing it effectively is key to maintaining operational efficiency. Proper classification and visibility of inventory help companies distribute goods efficiently and meet customer demands.

What is Warehouse Stock?

Warehouse stock, or inventory, refers to the goods stored in a warehouse, representing investments made by a business to fulfill customer demands or production needs. These can include raw materials, semi-finished products, or finished goods, all aimed at generating profit. To manage this asset effectively, choosing the right classification method and considering factors like storage space and turnover rates are crucial.

Types of Stock

Stock can be classified based on various characteristics and functions within a warehouse:

• Cycle Stock: These are essential items needed to satisfy regular demand. They don’t account for sudden changes or disruptions in the supply chain.
• Seasonal Stock: This inventory is accumulated for peak periods or seasonal demand, such as during holiday sales like Black Friday or Christmas.
• Safety Stock: Stock kept to mitigate risks like supply delays or unforeseen demand spikes.
• Alert Stock: This stock type triggers a notification to replenish items before they run out, ideally keeping levels above the safety stock threshold.
• Dead Stock: Items that are obsolete, unsellable, or damaged. Proper management ensures dead stock doesn’t disrupt operations.

Stock can also be categorized based on its business purpose:

• Physical Stock: The inventory physically available in the warehouse.
• Minimum Stock: The minimum quantity needed to avoid stockouts and meet customer demand.
• Maximum Stock: The maximum capacity of the warehouse.
• Optimal Stock: The ideal balance between meeting business needs and not overstocking.

Warehouse Stock Control

Warehouse stock management is guided by a clear policy set by the organization. This policy helps determine how much stock is needed to meet customer demands, production schedules, and prevent stockouts. Effective stock control relies on tracking the goods entering and leaving the facility.

How to Check Stock in a Warehouse

There are several methods for managing and controlling warehouse inventory, ranging from manual checks to automated solutions:

• Warehouse Management System (WMS): Inform WMS provides real-time information about stock, including its origin, current location, and destination. This data helps ensure on-time, accurate deliveries, and integrates seamlessly with other systems like Enterprise Resource Planning (ERP) to streamline operations across multiple facilities.
• Physical Inspections: While WMS is more effective, on-site inspections can help identify obsolete stock or shrinkage.
• Reassessing Inventory Levels: Regularly evaluating inventory based on demand forecasting and adjusting for supply chain disruptions ensures that stock levels are always aligned with the business’s needs.

Reasons for Holding Stock in a Warehouse

While minimizing overstock is ideal, there are several reasons why a company might choose to hold inventory on-site:

• Prevent Stockouts: Ensuring product availability helps avoid lost sales and dissatisfaction.
• Achieve Business Objectives: Strategies like “make to stock” help meet targets or anticipate demand.
• Reduce Lead Times: Having products ready to ship increases operational efficiency and customer satisfaction.
• Avoid Last-Minute Costs: Storing extra inventory helps avoid urgent reordering costs from suppliers.
• Meet Seasonal Demand: Companies often stock up before peak seasons, such as toy manufacturers preparing for the Christmas rush.

Control Your Warehouse Stock with Inform WMS

Inform WMS offers a powerful solution for streamlining warehouse operations, ensuring accurate tracking of inventory, and enabling efficient use of space. As a leader in warehouse automation, Inform WMS helps businesses predict trends and anticipate demand, leading to more accurate forecasting and smoother logistics operations.

Contact us today to learn how Inform WMS can optimize your warehouse management processes, backed by decades of expertise in intralogistics solutions.