Intro to perform stock control
- 2. Introduction - don’t type this. We are starting a new topic today. It is called Perform Stock Control Procedures. It is examinable in the HSC. Make a new folder in your files for this unit.
- 3. Stock control is a very important function for a retail store. Although stock control is not a money making exercise in the same way as customer service; it does save money, increase profitability and is vital to the success of a retailer.
- 4. The stock in a retail store means all the goods that the retailer has with the intention of selling them. It includes all the items on the shop floor, all those on display plus all the items that are in storage. It will also include those that are being used for customer orders.
- 5. Stock control refers to the systems in place to: Order new stock Monitor stock levels Track stock movements
- 6. For a retailer to have an effective stock control system then they need to have: Efficient systems for ordering stock Efficient procedures in place for taking delivery of stock Adequate storage areas Appropriate display areas Professional salespeople to sell the goods Efficient systems for monitoring these processes
- 7. How much stock to hold? The aim of stock control is to minimise the cost of holding these stocks whilst ensuring that is enough stock to meet customer demand.
- 8. Stock control is a balancing act. Stock levels must be maintained in a way that there is enough stock on hand to meet customer demand; yet at the same time holding too much stock costs money and storage space.
- 9. Obtaining the correct balance is not easy and the stock control department will work closely with the purchasing and marketing departments
- 10. Marketing department The marketing department should be able to provide sales forecasts for the coming weeks or months and so allow those who order to judge the type, quantity and timing of stocks needed. This can be difficult if demand is seasonal or prone to unexpected fluctuations.
- 11. Purchasing department It is the purchasing department’s responsibility to order the correct quantity and quality of these inputs, at a competitive price and from a reliable supplier who will deliver on time. They will be informed by the marketing department.
- 12. A retailer likes to have a high stock turnover (i.e. a lot of stock coming in, being sold then going out). This is how profits are made. If high turnover can be achieved without the retailer needing to carry a lot of stock, then they have an effective stock control system.
- 13. Holding little stock A store may decide to hold very little stock in the store and order items as they are needed. This is known as just-in-time, where goods arrive in the store just as they are needed.
- 14. Advantages and disadvantages Advantages Disadvantages Lower storage costs Potential loss of sales if you don’t have the product when the customer wants it Flexibility in ordering a variety of goods to suit demand Reliance on suppliers to deliver the goods Keep up to date with new goods Hard to judge what is needed
- 15. Holding a lot of stock Some stores may decide to hold more stock that what is needed.
- 16. Advantages and disadvantages Advantages Disadvantages Will have the goods when customers need them Costs of storage – rent, security and insurance Can meet sudden changes in demand Money tied up in stocks not being used elsewhere in the business Easy to manage and plan for Theft becomes a bigger issue Buying in bulk may be cheaper Certain goods might perish Useful if sales are unpredictable Some goods may become obsolete before they are sold
- 17. Which to do? A retail store will need to decide which method suits them the best. This decision will be based on: • the nature of the good, e.g. is it perishable, is it a common good, the demand for the good • the storage space available
- 18. The stock control process Stock control can be thought of as a cyclical process as shown in the diagram on the next slide.
- 20. Receiving & processing stock One of the most important parts to stock control is the receiving and processing of stock. There are various procedures a retail store can use to receive and process stock. This is what this unit will focus on. I will teach these procedures as steps. But in the exam they will not be referred to as steps but procedures.
- 21. Step One •Ensure the receiving bay is clean and organised Step Two •Unpack goods using correct technique Step Three •Remove packaging
- 22. Step Four •Check stock against documents Step Five •Inspect items Step Six •Record stock
- 23. Step Seven •Store stock Step Eight •Dispatch stock Step Nine •Apply price labels