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-   -   Stock Control and the Cost of Doing things Wrong (http://www.smallbusinessbrief.com/forum/showthread.php?t=2300)

highcontrol 20th July 2005 09:25 AM

Stock Control and the Cost of Doing things Wrong
 
Over the years of creating stock control software solutions for clients, we found that too many small businesses were not using adequate inventory management tools, either keeping a tally of all their stock in their heads or using inefficient paper based systems, leaving a mess of paper trails everywhere, confounding the inventory control process.

Inevitably, we found that these potential clients were desperately looking for a business tool to manage their inventory, preferably before they reached the critical point where inventory management was taking over the valuable time that could be spent working on building the business.

More and more small business owners approached us for a solution, but were not prepared to pay for the premium products we, or any of our competitors, offered because of the bottom line cost.

Even the argument that improper stock control leads to higher costs (the cost of doing things wrong!), would not persuade them to purchase, much to their own detriment.

Some of our potential clients were in the situation where their Inventory had taken over their storage and office space, with no knowledge of where an individual stock item might be, other than a general location where it should be, but things would move, disappear, reappear or be completely lost.

Mislaid stock is mislaid capital, and keeping your bottom line healthy means knowing where all your cashflow and capital is. Stock costing thousands is capital tied into the business, but these business owners could not see the potential of cost savings through stock management software costing hundreds of pounds.

A few hundred pounds purchasing the correct tools is thousands of pounds saved when your inadequate inventory management is sucking up your capital.

There are stock control programs out on the net for mere tens of dollars like this one www.stock-control-system.com or just search on www.download.com or www.tucows.com for stock control programs, and more than likely there'll be one to fit your business.

If you want to save costs, just make sure it fits the 80/20 rule to compare each product against another - if it does 80% of what you require for 20% of the cost of the next best product, then your initial ROI is much greater. This formula works better when comparing the cost of having a bespoke system compared to an off-the-shelf package.

When your business expands and grows, then you can re-evaluate the business tools you have, re-evaluate your budget and compare your potential software tools at a later date, for its a simple fact that most small businesses trying to gain momentum require every dollar that it can muster.

highcontrol 20th July 2005 09:29 AM

Stock Control Software is a Saturated Market
 
Inventory Management Systems and Stock Control software in general is a very highly saturated market, with hundreds of software houses producing sophisticated systems for all types of industry.

This is how the small software house can be a key niche player in the market, by specialising and targeting certain industries, rather than try to be a swiss army knife program.

A solid functional system is the basis of good stock control, with a simply laid out, well designed interface, which eases the learning curve for new users. Then one must look at the target user, to add further precision in the marketplace.

Split the target end user into groups of user level and computer competence, and design for that level of computer literacy. It is reasonable to assume that most people working in the stock warehouse or sales office of a retail or wholesale distribution business are fairly IT literate, and know their way around a keyboard and mouse, but even then, one should design and cater for the lowest level of competency.

Information Technology should be ubiquitous, much as the mobile cellphone is becoming, and so this simple phrase should be the motto running in the heads of all software engineers. Make it easy to use, so that every one can use it.

So the HighControl Stock Control Business Management software was designed with low IT literacy in mind, although many functions are for the more experienced computer user, the daily tasks of stock purchase, entry, sales, despatching and invoicing are made to be simple to use, and with lowered times of competency by design.

Reason? We saw that many office users, salespeople, warehouse staff and other operational job roles, did not require or have to use IT equipment, any more than a cursory check of email and the web. So their user experience was limited to email programs, browsers and, usually, games. So when introducing a new Stock Control system, it had to be logical and easy to learn & use.

Also, by targeting a specific industry niche, the IT wholesale distributor, it benefitted our target customer by recognising and meeting those needs of that particular industry, so new customers could find all they need straight out of the box, and take control of their inventory problems.

Although we have changed our off-the-shelf package, it is still aimed at the retail or wholsale distributor, taking sales over the phone, email or web, with the occasional walk in customer. The system is set up in such a way that the goods out/despatch is central to operation, so, unlike an EPOS system, it is based on the gereration of a Sales Order, or a Pro-Forma invoice, rather than scan out operation at a till like a supermarket, though we also have scan out capability for faster sales order generation.

When you look for Software to help you run your business, the most essential point to remember is How it will help you run your business, not the cost or the salesman's patter, but work out first how any tool can improve your bottom line, which requires understanding your problem in the first place.

Inventory Control Software does not solve all your problems, but they are made for a specific reason, to manage and control your stock, and ergo, your sales.

pete 20th July 2005 05:12 PM

Missing from all of your screenshots was one of the actual inventory item record. Without seeing that it is impossible to tell if you have included unit breakdown and standard buy / sell quantities. There are many items with a single barcode that have various sales possibilities. One the retail side there are items such as cigarettes (carton / pack) and beverages (case / 6 pack / each).

While your software is order entry, rather than Point of Sale, the same possibilities exist. One example might be light bulbs that could be sold by the case, 4 or 6 pack or each. All with the same barcode. Another might be auto spark plugs that come 8 or 10 to a box but might be sold in other quantities.

Is you software capable of handling this, or even the buy buy the case of 100, sell by units?

What about unit sales history? Can you tell me how many 12345's I sold each month for the last 12 months, with a 13th field for total sales the previous 12 months? Much of this I could tell at a glance if it could see a screenshot of the actual inventory record.

Proper inventory control requires not just knowing what you have and don;t have, but the capability to easily set and adjust stock records. This, in turn, requires being able to access detailed monthly or at worst quarterly sales records on each unit - in a way that makes editing stock levels easy. Naturally, having all of this on the same screen where you actually do the editing of the stock levels.

Having an accurate quantity on hand figure is nice, but being able to easily adjust your inventory, determine your inventory "turns" and return on investment are equally, or even more important than just knowing what you have.

And probably more important yet is learning and understanding the theory of Open to Buy, which allows you to take each department of category to where it needs to be to get a reasonable return on investment from your inventory. Open to Buy (OTB) does not require a computerized inventory, at all. It's nice, but not required. A simple multi-category cash register will do just fine. Just being able to know sales per category goes along way when figuring OTB.

For more on OTB check this out - Open to Buy


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