What is Inventory Control? Tips and Optimisation Techniques

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inventory management
  • What is inventory control?
  • Inventory control solutions for retailers, wholesalers and eCommerce businesses
  • Why is inventory control important for logistics companies?
  • How to optimise stock levels and improve warehouse performance

If you’re a multichannel retailer, supplier or own an eCommerce store, managing inventory might be a daunting task.

However, effective inventory control is the key to success. Managing your inventory will minimise financial risk, help your business meet customer expectations by ensuring the timely delivery of goods and ensure you are keeping an optimal supply of stock.

What Is Inventory Control?

Inventory control, also known as stock control, refers to ensuring the appropriate levels of stock are maintained to meet consumer demand. It comprises several management techniques that help connect the upstream purchasing activities with the downstream activities of sales and product demand.

Essentially, inventory control monitors product movement, usage and storage to maintain a functional supply chain.

Inventory control can include:

  • Integrating barcode scanners with tracking software
  • Completing inventory counts
  • Tracking the physical inventory of sales and purchase orders
  • Establishing reorder points
  • Product specifications and data
  • Reporting

Inventory control aims to highlight slow-selling items, customer favourites, and bestsellers to optimise the cost of ordering, maximise profits and keep only necessary units in the warehouse.

You can manage inventory levels manually and with automated systems, which are advantageous as they help eliminate the risk of human error.

Inventory Control Solutions

There are four primary inventory control solutions. These are:

Manual: The simplest method is to track inventory with a pen and paper. However, this solution only tends to work for small businesses with low inventory.

Electronic methods also provide significant protection in the face of uncontrollable events, and it’s nearly impossible to plan for future inventory needs if you have hundreds and thousands of loose notes to sieve through.

Excel Spreadsheets: Excel inventory management is great for storing information and can help you better organise and track your inventory levels, thanks to its wide range of functions.

However, unlike inventory software, Excel spreadsheets can’t be automatically updated, meaning they’ll need to be monitored and amended manually by someone specialising in the software application.

Simple Inventory Software: Basic inventory control software will help you monitor stock quantities and automate some processes to reduce the risk of human error and streamline operations.

However, you might want to consider upgrading to more advanced software if you own a large business and need to fulfil many orders in short periods.

Advanced Inventory Software: Advanced inventory control software includes a set of additional functions to track stock more efficiently and provide real-time updates.

Contrary to popular belief, advanced software is also relatively cost-effective and scalable, meaning it can be altered to include more complex features as the business demands change.

Inventory Control vs Inventory Management

It can be easy to confuse inventory management with inventory control, but the two systems have a key difference.

Inventory control refers to regulating stock that is already in the warehouse. It is also concerned with inventory quality and the overall organisation of goods in the warehouse to minimise costs.

Inventory control best practices will protect your business against risk exposure and ensure you make the best of your resources by eliminating the possibility of overstocking or understocking.

On the other hand, inventory management refers to the practice of stock replenishment and forecasting. It focuses on when to order inventory, how much to order, and where to store products in the warehouse.

If you effectively control inventory, you’ll likely find that your stock management also improves.

Importance of Inventory Control

Inventory control is invaluable for online retailers and wholesalers, allowing for more data-driven decisions, saving time, resources and money and increasing customer satisfaction.

Even if you generate good sales, poor inventory control will hurt your profitability. Here are a few reasons why inventory control is essential to building a robust operation:

Quality Control

Tracking and managing all aspects of your inventory will lead to greater quality control, ensuring that product quality fulfilment is maintained or improved.

The longer you hold inventory, the more likely it will incur damage. Instead, mitigate loss by expiration or obsolescence by rotating stock – placing newer products towards the back and older items at the front of shelves. Even if you don’t sell perishable items, implementing this technique will ease workers’ access to goods and reduce damage to non-perishable inventory.

Effective inventory control will also enable businesses to track and assess the quality of stock received from suppliers more efficiently. For example, if you notice that you have to return goods frequently, you can point out concerns and problems to the supplier to improve quality control.

Increase Organisation and Visibility

Inventory control is the basis of a well-functioning organisation, and eCommerce businesses should explore various stock control techniques to develop and streamline stock processes.

Keeping on top of inventory will create a well-organised stockroom that allows you to make the most of your investment in physical stock and warehouse space. In addition, if employees can locate stock easily, they can fulfil orders quickly and efficiently, increasing customer satisfaction and encouraging repeat purchases.

Effective inventory control can significantly boost your cash flow by keeping your warehouse in order and helping you avoid holding any deadstock or overstock. It will also promote greater productivity in the warehouse and deliver accurate intel to the sales team, integrating various areas of your business and minimising error.

Avoid Legal Trouble

It’s important to keep an accurate record of your inventory levels for auditing purposes – effective stock control will achieve this.

Your company may be mandated to provide a physical inventory count for financial accounting rules and tax regulations. An incorrect inventory account could raise questions about your business accounting integrity and land you in legal trouble.

Furthermore, knowing what assets you have will allow you to identify overall losses and understand the current value of your brand.

3 Inventory Control Techniques to Optimise Stock Levels

To maintain inventory levels, meet demand, reduce logistics costs and avoid common pitfalls, we’ve listed our top three inventory control techniques to help you optimise storage.

#1 Forecast Demand

One of the most critical inventory control techniques is demand forecasting.

Controlling and managing inventory is about understanding your customers’ interests and knowing what products to keep to satisfy market demand. Start by setting up advanced inventory forecasting models that can produce accurate predictions around demand.

It’s not enough to look at last year’s sales figures. An effective forecasting model should consider:

  • Product Life Cycles: What stages of the life cycle are your products at currently? Factor in varying life cycle stages as this will affect demand patterns for your products.
  • Seasonality: Are your products affected by seasonality? Categorise your seasonal products and keep demand factors for those items separate from your base calculations to make forecasting more accurate.
  • Trends: Trend forecasting is an effective way to look at market growth and predict future demand. Analyse trends in your historical sales data and use knowledge of market fluctuations to support your forecast.
  • Qualitative Method: If you have no sales data to work with or want to utilise the opinions of experts or customers, you can use qualitative data to adjust your forecast accordingly. The qualitative method includes sales promotions, competitor activity, and market research data.

#2 Automation

Using automation in inventory control can streamline standard stock procedures such as inventory counting, fulfilment and shipping, reducing the need for human intervention and minimising the risk of error.

Since automated inventory management uses advanced software, this also provides warehouse management teams access to real-time data when integrated with other systems. Automation increases productivity and production rates, which helps to boost customer satisfaction as warehouses can manage capacity and fluctuations in orders more effectively.

Real-time data also gives more profound insight into warehouse performance, promoting scalability as business owners can make smarter, data-driven decisions on utilising warehouse space or expanding operations.

#3 Review Workflows and Processes

It would be best if you made a habit of reviewing workflows and processes regularly so that you can react to changes in demand quickly and make appropriate adjustments to ensure operations continue to run smoothly.

The review should include all aspects of the warehouse and products, including any management software and technologies used to help streamline operations.


You might need to update or upgrade the software to increase productivity and reduce costs.

Although bricks and mortar stores have reopened as we turn our back on the coronavirus pandemic, the shift to digital shows no signs of slowing down and as a result, trends in eCommerce are expected to continue.

The rise in automation and artificial intelligence (AI) has also provided retailers with profitable opportunities to implement cutting-edge processes, creating a new era of competition in the industry.

Supply Chain Inventory Control

The most critical and challenging role that inventory plays in the supply chain is striking a balance between supply and demand. We’ve outlined a few supply chain inventory control techniques that could help ensure efficient management of the process.

Batch Control

Batch control is designed to increase production efficiency and optimise inventory management within the supply chain. It refers to manufacturing goods in batches to ensure the right components are available to produce the end product.

Batch management systems are essential for efficient tracking, allowing you to monitor inventory more effectively. For example, suppose you discover a faulty product. In that case, you can trace it back to the batch it came from and notify your suppliers, significantly reducing the risk of promoting defective products on the market.

Besides providing greater tracking and efficiency, using batch control techniques can also boost your brand’s reputation by ensuring quality control – a surefire way to improve production processes.

Third-Party Logistics (3PL)

It’s not uncommon for retailers to outsource the supply chain and hire a third-party logistics company to facilitate the warehouse, distribution and fulfilment services.

Outsourcing supply chain management can also significantly reduce costs to the business and allow eCommerce companies to meet customer demand more efficiently, especially during seasonal periods when you’re likely to experience an increase in orders.

Pointbid Logistics is B2C and B2B efficient, with over 50 years of experience in warehousing and logistics. We’ve served customers worldwide and have become a preferred partner of the Royal Mail due to our professionalism and proactive approach to order fulfilment.

Bulk Ordering and Shipping

Have you ever considered ordering products in bulk or shipping a large volume of evergreen goods at discounted prices?

Using data, identify your bestsellers and high-performing products and order these in bulk. As these items sell quickly and steadily, the risk is low, and consistently ordering stock in bulk will reduce management costs as suppliers tend to offer discounts on multiple orders of the same product.

If you’re struggling to predict demand for a specific product, this technique can be advantageous. However, make sure you have space to store these items to avoid damage, especially if you sell perishable goods.

At Pointbid, we implement order fulfilment solutions for a range of e-commerce brands, from start-ups to medium-sized businesses. If you think that outsourcing your order fulfilment could help your business grow in 2023, please give us a call on 0121 326 7368.


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