Warehouse Stock Control: Methods, Systems and Best Practices

Warehouse stock control is a system used to track and manage the stock availability and movement of goods within a warehouse. It ensures the accuracy and availability of stock by tracking the supply of inbound goods, recording the outbound dispatch of goods, and tracking stock levels across the warehouse.

Warehouse stock control is an essential part of warehouse management that helps meet customer demand, reduce costs and increase efficiency. It is also used to anticipate customer demand and forecast future stock requirements.

Meeting demand

Effective warehouse management has many aspects, but one of the most important is the ability to keep careful track of inventory by having an effective stock control system in place.

The primary purpose of warehouse stock control is to ensure that there is an adequate supply of products to meet customer demand. Without adequate stock control measures, warehouses can quickly become overwhelmed and disorganised leading to delayed or cancelled orders and dissatisfied customers. Without a clear understanding of what is in stock and what is not, warehouses may become inefficient at managing stock levels, costing time and money.

Stock discrepancies

In addition to meeting customer and supplier demands, stock control helps warehouse managers identify any stock discrepancies early on. Catching these errors before they become a problem is essential for avoiding costly issues such as overstocking, understocking and stock shrinkage. Most retailers and warehouse managers will know that stock shrinkage is very much a problem and can be caused by any number of factors including theft, damage, waste or human error.

Stock control and inventory management is designed to minimise these risks as much as possible by providing immediate data to highlight where stock has been lost and how much.

An example to demonstrate the potential pitfalls of not accurately monitoring stock levels is if an online retailer sends out an email promoting a particular product to boost sales. The promotion works and orders begin coming in. As the warehouse staff start to pick and pack these orders, there is a problem - a whole box of the particular product you believed to be sitting on the shelf is missing. This could have happened for a number of reasons; the last order from the supplier was short, stock wasn’t adequately checked when it arrived, or did sales far exceed the expected number and a reorder is required.

Regardless of the reason, it highlights the importance of sufficient warehouse stock control systems and how issues can arise without them. As well as being able to accurately monitor stock levels and trends to help warehouse managers plan ahead and prepare for upcoming orders, stock control is equally useful in avoiding overordering and creating deadstock inventory that occupies space and loses retailers money.

A good stock control system doesn’t rely solely on accurate stock counts, they use proven inventory methodologies to reduce wastage, lower inventory carrying costs, and keep your warehouse running smoothly and efficiently. 

Here are the core strategic stock control systems that leading warehouse and fulfilment businesses use:

Just-in-Time (JIT)

Just-in-time is a lean inventory strategy, where stock is replenished when it’s needed for immediate demand. This means that your warehouse isn’t holding stock unnecessarily.

A JIT-enabled stock control system triggers purchase orders or production runs at the latest possible moment, whilst still ensuring their availability just in time – hence the name. 

Benefits of Just-in-Time

• Reduces inventory holding and storage costs
• Minimises waste from obsolete or expired stock
• Improves cash flow situation by avoiding excess inventory

Drawbacks of Just-in-Time

• Vulnerable to supplier delays or supply chain disruptions
• Requires accurate forecasting and real-time stock visibility to function
• Not suitable for products with long or unpredictable lead times

First-in, First-out (FIFO) 

The FIFO stock control system ensures that your oldest stock is used, sold or dispatched first. This is essential for perishable goods, but is also valuable for reducing dead stock in any warehouse.

Benefits of FIFO

• Prevents stock ageing and obsolescence
• Reduces write-offs of perishable, seasonal or high-turnover product lines
• Maintains an accurate cost valuation in accounting as it resists depreciation

Drawbacks of FIFO

• Requires systematic storage layouts and clear labelling
• Can be difficult to maintain in fast-moving pick and pack environments without utilising software support

Economic Order Quantity (EOQ)

Economic order quantity is a data-driven formula that is used to determine the most cost-efficient amount of stock to order each time. This balances demand forecasting, ordering costs, carrying costs and lead times to reduce total inventory expense.

Benefits of EOQ

• Helps avoid overstocking and stockouts
• Optimises storage utilisation
• Supports predictable, cost-efficient replen cycles

Drawbacks of EOQ

• Requires accurate demand and costs inputs for the formula to work
• Less effective when demand is highly seasonal or volatile
• Needs to be calibrated as business conditions change

Having a good stock control system in place is essential for retailers wishing to grow and increase their profitability. There are a variety of different stock control methods, each of which has its own advantages and suitable applications. In this section, we explore a few of the most popular stock control methods.

1. Basic spreadsheet tracking

This is a very simple and cost-effective way of tracking your inventory. All you need is a basic spreadsheet program and all the relevant information about your stock. With this method, you’re able to easily track your orders, deliveries, purchases, and stock levels all in one place. This method, however, isn’t suitable for businesses with complex or large inventory needs, as it can become difficult to manage and update manually.

2. Automated ordering systems

Automated ordering systems are an ideal stock control method for businesses that want to streamline their ordering process. Automated ordering systems allow businesses to set certain parameters for when and how to order new stock. When the parameters are met, the system will automatically place the order for you, eliminating the need for manual input. Although this method is relatively easy to set up, there can be a significant cost involved depending on the type of system you use.

3. Barcode scanning inventory systems

Mobile barcode inventory systems are a popular stock control method that uses barcodes to identify and track products. Barcodes contain essential information such as the product’s name, size, quantity, and price. By scanning these codes, businesses are able to quickly and easily keep track of their stock and orders. Additionally, this method is also very cost-effective, as it requires no additional hardware or software and can be done with a simple smartphone or tablet. Discover the benefits of implementing a barcode inventory system in your warehouse.

4. Radio-frequency identification (RFID)

Radio-frequency identification is a newer method of stock control that uses radio-frequency technology to track products. RFID tags are attached to each item and contain all the relevant information. This allows businesses to quickly scan entire batches of inventory and track their orders and stock levels. This warehouse stock control method is particularly useful for businesses with complex inventory needs, as it is able to handle large volumes of data more efficiently.

5. Warehouse stock control software

Warehouse stock management software is a great way for businesses and warehouse managers to keep track of their inventory in real-time. This software is usually installed on a cloud-based server and accessed via the internet, allowing businesses to access their data from anywhere and at any time.

Additionally, it also offers integrations with various other pieces of software, such as mobile barcode scanning software and inventory warehouse software. This makes it easy to keep track of multiple aspects of your business at once.

A reliable stock control system depends on consistent processes and the right technology. The following best practices help improve accuracy, reduce shrinkage and improve overall warehouse stock management.

Key best practices include:

• Set clear PAR (Periodic Automatic Replacement) levels - Establish minimum stock thresholds for every SKU to automate reordering and prevent stockouts.
• Schedule regular cycle counts - Frequent small batch counts are more accurate and less disruptive than annual full stock checks.
• Standardise warehouse receiving procedures - Ensure all incoming goods are checked, labelled and logged into the stock control system before entering the warehouse.
• Use barcode or RFID scanning - Reduce manual entry errors and maintain real time accuracy during putaway, picking and dispatch.
• Organise inventory locations logically - Implement clear slotting strategies (ABC analysis, velocity-based placement) to speed up picking and avoid mis picks.
• Monitor slow moving and obsolete stock - Identify SKUs with low turnover to avoid carrying unnecessary inventory.
• Use forecasting to anticipate demand - Combine historical performance, seasonality and sales trends to plan replenishment more accurately.
• Integrate your WMS with your sales and purchasing systems - Connected data ensures stock positions, orders and forecasts stay aligned across the business.

Stock control and inventory management isn’t a small task - it requires continuous maintenance and a high amount of attention to ensure that your warehouse is as efficient and cost-effective as possible. This can be especially difficult for growing or expanding businesses that are struggling to maintain levels of efficiency with their existing stock control systems as they grow.

From mobile barcode scanning to cloud-based warehouse management software, Mintsoft offers a range of software solutions to ensure you are meeting, and exceeding, best practice.

To transform your warehouse stock control, learn more about our warehouse management software or book a 1-1 demo today.