Stock management and inventory control are they the same thing?
Stock management and inventory control is the practice of ordering, storing, tracking, and controlling items. However, business terminology can depend on where you are located in the world. Generally speaking, “inventory” is more an American term, while “stock” is more for the British.
Either way, both terms are describing quantities of items existing in one or more locations, and stock and inventory are used interchangeably. However, for accounting purposes these two things are different.
Inventory is generally found in manufacturing companies as service-based companies don’t have to carry inventory. Stock management software manages quantities of goods you consume and their replenishment. Unlike your assets and equipment, stock items are constantly being depleted and re-stocked or replenished.
Stock management and inventory control, both terms are describing the control and management of quantities of items such as MRO (Maintenance, Repair and Operating) items, consumables and spare parts for machinery. Stock management and inventory control are terms used interchangeably in business and product monitoring. In fact, the term “stock inventory control” is the proper term.
Stock and inventory tracking solutions are focused on optimising your organisation’s resources, reducing auditing times and improving ‘on-hand’ item levels.
Inventory (American English) or stock (British English) is the goods and materials that a business holds for the ultimate goal of resale (or repair). A stock management solution can also assist companies in monitoring employee consumables such as PPE stock levels. Alerting when available item levels drop. Stock management systems (also called stock control) track consumables, control stock purchasing and locate items quickly.
What are the four stock/inventory types?
A good inventory management process means you can easily identify what stock you have on hand and the value of it. Find out the types of inventory you could have and how to manage your items so your business is well stocked.
Inventory doesn’t include capital assets such as company cars you use to visit clients, equipment and tools you use in your business, staff and their training.
Generally, stock and inventory can be grouped into four classifications or types;
- Raw materials (manufacturing)
- Work in process (manufacturing)
- Finished goods (manufacturing)
- Plant upkeep such as gaskets and lubricants
- Office consumables such as first-aid kits, stationery and printer toner
- Spare parts for machinery and equipment
- MRO goods
- Personal Protective Equipment (PPE)
Manage your business centrally from front to back with one single source of truth. Incorporating quantities of items as well as individual assets and equipment via a modularised solution.
Why control MRO items?
Many people don’t fully appreciate the vital role MRO items play in keeping your business running smoothly. Failure to routinely maintain, repair, and overhaul assets can cripple a business. Contrarily: businesses that diligently maintain MRO items and inventory, can optimise supply chains and assists the business to run smoothly and economically.
How does stock management save money?
While stock management regulates an item’s quantity and tracks location, the cost savings are derived from forecasting. Stock management systems determine when to order goods, how much to order and the most effective source of supply. Stock management software offers the framework to optimise the tracking of “how, when and what quantity of stock/inventory is used and for what purposes”.
You can analyse where the stock is consumed and maintain optimum levels. This is important in relation to spare parts and actioning on repairs in a timely manner.
Success story; RMH spare parts store transformation
Read the RMH case study here
The Royal Melbourne Hospital (RMH) completely changed the way it procures, manages and stores spare part items. RMH transformed the way it procures, manages and stores spare parts used in the maintenance and repair of critical medical equipment used in clinical operations.
Integrating the core database with Hardcat’s maintenance and help desk module functionality with stock management, allows you to flag which spare parts are critical. To avoid loss of productivity in the event of production equipment breakdown.
RMH selected a range of Hardcat software tools to support the upgrade of its asset management processes. This included the core asset register, preventative maintenance and service desk/help desk modules as well as in-field work order management via handheld devices. RMH has subsequently introduced the stock management module to better manage the spare parts that are kept on hand.
Implementing the stock management module has been the driver of a substantial transformation within our department. It has allowed us to better manage the spare parts we keep on hand and to monitor our usage of these parts.
Through use of the image upload feature, we are now easily able to identify and locate the relevant spare parts we keep on hand when we need them. We now have the ability to set up alerts when minimum inventory thresholds are breached. When the inventory of spares of a particular part held in stock drops below a certain number, we are automatically notified.
We then use this function to generate a weekly inventory re-order report to assist in placing orders and maintaining our stock of parts at a serviceable level.
Lakshmi Thiru, Biomedical engineer RMH’s CED
In addition, RMH is able to better analyse usage of spare parts by creating customised reports from the data to highlight the most frequently used spare parts and strategically adjust maximum and minimum levels for the part accordingly.
The Hardcat stock module has significantly improved processes for storing and managing spare parts, effectively increasing productivity within RMH CED.
Unscheduled equipment downtime is costly for any business!
- Ensure you’re not overstocking or understocking
- Report on audit trail of stock usage
- Automatic re-order of stock-based upon usage and minimum levels
- Ensure critical spare parts are available in the event of a breakdown
- Minimise wastage, underutilisation and theft
- Optimise stock quantities “on-hand” and purchase at the optimum price
- Stock/inventory and asset management integrated into one system
- An accurate record of what was “on-hand” for insurance claims
- Fast issue and/or transfer of items
- Rapid stock/inventory audits
- Increased efficiency in stock control via automatic stock reorder
- A complete history of pricing and/or supplier changes
Maintain goods and supplier information
- Warranty period
- Restricted Goods
- Re-order point and standard re-order quantity
- How stock is consumed
- The quantity that exists (total) and quantity by location
- Location of stock
- Supplier lead time
- The lowest and highest purchase price
- The maximum and minimum quantity “on-hand”
- Supplier and alternative supplier
- Stock code, product barcode and serial number
- Brand and model details
- Product type and stock type
Hardcat stock management
Track, re-order, move, change and report on consumables and spare parts anywhere, anytime and know the location and quantity “on-hand”. By managing the “how, when and what quantity is used for what purposes”, the operator maintains optimum stock levels (not too high not too low) as well as a complete history of pricing changes and supply chain information.