The largest asset and the largest risk.
WHY IT MATTERS MOST HERE
Stock is nearly all of your capital, and margins are too thin to absorb losses.
WHAT TO RECORD PER LINE
Product and pack size Batch and expiry, where applicable Quantity Cost and sell price Supplier Location in the warehouse
WHY LOCATION
Finding stock consumes time, and unfound stock is reordered.
WHAT TO ESTABLISH
Counting: continuous, covering everything over a cycle.
WHY CONTINUOUS
Annual counts find problems too late.
WHAT DISCREPANCIES INDICATE
Theft Damage not recorded Picking errors Receiving errors
WHAT TO MEASURE
Shrinkage, as a proportion of throughput.
WHAT TO CALCULATE PER LINE
Stock cover: how many days of sales you hold.
WHAT TOO MUCH COVER MEANS
Cash tied up unnecessarily.
WHAT TOO LITTLE MEANS
Stock-outs, which lose sales and customers.
WHAT TO SET
Reorder points, from sales rate and supplier lead time.
WHAT TO ADD
Buffer for lead time variability.
WHY
Supplier lead times vary, and the buffer is what prevents stock-outs.
WHAT TO WATCH
Slow-moving and obsolete stock.
WHAT TO DO ABOUT IT
Clear it, decisively.
WHY
It occupies space, capital and attention, and it rarely improves.
WHAT TO TRACK
Stock value against monthly sales.
