What Is Stock Control?

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  • Written By: Mary McMahon
  • Edited By: Nancy Fann-Im
  • Last Modified Date: 09 November 2019
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Stock control is the management of stock at various stages of the production process, from raw materials to finished goods. Good control will keep costs down while satisfying customers, while poor controls can lead to cost overruns and customer complaints. Many companies use stock control software to streamline the process and make it more efficient. Personnel on the ground are still necessary to manually verify stock counts, perform inspections, and address problems as they arise.

One aspect of stock control involves ordering stock. For manufacturers, this includes a variety of raw materials, while wholesalers and retailers need to order finished goods. The goal is to keep enough stock on hand to fill orders, without an excess. Storing stock is expensive and can become very costly when large volumes of material are in storage. There is also a risk that stock may expire or become obsolete before it can be moved if the company orders too much.


Management of stock on hand through techniques like stock rotation is also part of stock control. Companies usually use the oldest items first to keep all the stock as new as possible. The company may need to provide climate control and other measures to protect stock until it leaves the site, and this is all part of the control system. For companies handling living organisms, caring for stock will also include providing food and water and checking on health. Other stock like hazardous chemicals or ammunition may need to be secured for safety reasons.

As stock leaves, stock control systems track it and compile information that may be useful later. Companies can quickly determine which items move the most quickly, and will use this information to decide how much to order in the future. This information also feeds into sales reports and forecasts, as the movement of stock provides important information about what the company sells. It can also be useful for filing taxes and other financial statements, when stock on hand must be declared along with other assets and liabilities.

Accurate stock control requires knowing what is actually on hand. In addition to tracking stock electronically, companies may also hold periodic manual inventory counts to physically locate everything in stock and make sure the real numbers match those recorded in a computer. If they do not, an investigation to determine why not is necessary. Stock may have been misplaced, lost, stolen, or improperly recorded. Frequent inconsistencies are a sign of poor stock control and indicate the need to secure the facility or train workers better.


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