Stock Management - should Procurement get involved?
Posted on 22nd August 2020 at 13:37
Managing your stock is all about ensuring that there is sufficient stock available to meet the needs of your business – to satisfy orders from your customers and meet your production demands. By not having enough stock available may result in lost sales because you are unable to satisfy demand. There is also the flip side of this – having too much stock ties up your capital and impacts cash flow which can be detrimental to the health of your business.
But what has this got to do with Procurement? Surely the responsibility of stock control and management belongs with a warehouse or production team?
As part of the larger team working towards ensuring that the business is successful it is essential that we all find the right balance. Widening the “Procurement” definition to include supply chain as well, we are responsible for ensuring that the correct balance is found and this can be seen in the 5 Rights of Procurement – Right Place, Right Price, Right Quality, Right Supplier and Right Quantity.
Getting the Right Quantity is ensuring that there is enough to meet demand and maintain service levels while minimising stock holding through demand forecasting and inventory management. If there is not enough stock there could be shutdowns in production, lost time and late deliveries to customers who could become dis-satisfied and move elsewhere; too much and you are at risk of wasting storage space, quality deterioration, theft and damage.
Pro Outsourcing can complete a review of your purchases, sales and stock holding, helping you to understand what inventory you should be holding and how you could manage your inventory levels more efficiently.
Share this post: