What is inventory control?

Inventory control, also called stock control, is a multi-functional and multi-dimensional process that managing a company’s inventory levels, whether that be in their own warehouse or spread over other locations. It comprises management of items from the time you have them in stock to their final destination (ideally to customers) or disposal (not ideal).

Is inventory control the same as inventory management?

At first glance, inventory control looks very similar to inventory management. While they are closely related, inventory control is different from inventory management. Inventory control works with the inventory already in a distributor’s warehouse. It requires knowing what products are in your inventory and where it is located within your warehouse. It ensures the inventory remains in good condition and is organized in a way that minimizes cost.

Inventory management includes the business processes of product replenishment and forecasting. Management encompasses when to reorder products and how much product to order, to avoid either dead stocks or holding too much inventory. It ensures that the right inventory is in the right place, at the right time, and in the correct quantity. You can achieve better inventory management when you improve your inventory control.

Determine which process your business needs

You can determine whether you need inventory control or inventory management by assessing your current system and identifying gaps. Maybe you know every detail about your products, but your shipping or ordering process is not where it should be. Or maybe you can track raw materials all the way through order fulfillment, but your stock area is messy and disorganized.

So, which process do you need: inventory management or inventory control? Most businesses can actually benefit from both. An inventory management system that has proper inventory control will yield more efficiency, lower operating costs, better forecasting, increased warehouse organization, and greater profit.

Which businesses need inventory control?

Any business that handles stock will need inventory control of some form. How much you’ll need it depends on how important your products are to your business’s success. Similarly, any of these businesses will find it absolutely crucial:

  1. Wholesalers and distributors
  2. Food/beverage producers, including brewers
  3. Manufacturers
  4. Retailers

The importance of inventory control

The value of inventory control extends from cost reduction to customer satisfaction. Good inventory control saves your business time, resources, and money. Your company can have a significant gain in sales, but without control over your inventory, your business’s profitability will suffer.

Here are some ways inventory control is important for your business.

Quality control

Having an inventory management system allows you to implement greater quality control. If you can track and manage all aspects of your stock, you better control quality. The longer you hold inventory, the more likely it is to get damaged. You can avoid that by ensuring that stock gets rotated through your warehouse.

Inventory control also allows you to track the quality of stock you receive from suppliers. How often do you have certain products returned? How often are those that are returned sent back because they break or have other defects? Seeing how products move through your inventory can point to any problems, and help you eliminate write-offs.

Organizational control

Inventory control means that you have organizational control in your business. In other words, a well-organized stockroom lets you manage your merchandise and make the most of your investment in physical inventory. This aspect of inventory control is vital for knowing where your stock is and the expediency with which you can access it.

Inventory control in terms of the organization of your stock is vital for the proper running of your company. It will ensure that you have enough units to fulfill orders and have safety stock. Effective inventory control will also help you avoid having any dead stock or overstock.

Accounting accuracy

Keeping an accurate record of your inventory is vital for managing your assets. It will also help you in the event of an audit. Knowing what you have in assets allows you to know your overall spoilage and understand the value of your company.

Inventory control best practice in 2021

There’s no single ‘top’ method to control your inventory – and there are several different approaches and models used. In other words, your best practice will depend on your business’s unique needs. That said, it’s usually easy to spot the difference between a company with optimal control, and one without. Here are three things to aim for:

1. Set procedures and policy

Perhaps the easiest way to achieve an organized warehouse is to pick your procedures and policy, then ensure that everyone in the business follows them. For example, decide what should happen when new stock needs ordering — and then how to record it when it arrives. With all your staff working in sync, you’ll be able to reduce wasted stock (say, from breakages or theft), keep one source of inventory information and take stock with ease.

2. Knowing everything that goes out the door

Sometimes products may leave the warehouse without being allocated as a sale. For instance, your business may sponsor an event, donate to a charity, or have some damaged goods from time to time. Companies with sub-optimal inventory control often fail to record these departures properly, meaning they end up getting marked as lost goods and final reports are incorrect.

3. Being proactive

The companies that master inventory control tend to have one thing in common — instead of passively waiting for problems to arise, they constantly watch out for improvements they can make to their system. New technologies such as RFID or barcode tracking, for instance, can make keeping stock organized much easier by reliably gathering quality data.


To sum up, effective inventory control is vital for any business, from a newly established brand all the way up to Amazon. It allows you to optimize your cash flow and reduce resources spent in inventory control. By using automated inventory control software systems, you can implement a strategy for inventory control that tracks your assets in real-time. Giving you visibility and control over your stock.