Inventory Control

What is Inventory Control?

Inventory Control is a method adopted by the enterprises or organization to properly manage the Inventory/stock stored by the organization in the course of business in such a manner that the organization would incur minimal storage & carrying charges for the inventory as well as will be able to satisfy its customer’s demands in the market.


The inventory stock maintains by the manufacturing company’s during the business to fulfill the demands of the interested parties in the market. Thus maintaining the level of stocks and controlling the inflow & outflow of the inventory becomes more necessary for the management. The procedure is developed and implemented by using the scientific techniques and with management’s help; for managing the inventories; through implementing the controls over the transactions and movements relating to the stocks. In simpler terms, they can also be termed as maintaining the warehouses.

Objectives of Inventory Control

  • To reduce storage & carrying charges of the inventory to a minimum as the stocks are maintained in thousands of numbers. The maintenance and storage of stock have a significant cost related to the business.
  • To supply raw materials, packing materials, intermediate goods, etc. for production of the finished goods within the required time for completing the order or target within the speculated times.
  • To capitalize on the situations whenever there is a reduction in market prices of the inventory and effectively managing the inventories in case of inflation where the increase in the prices of the materials the handling of a store can be done better and effectively.
  • To reduce and effectively manage the scraps, non-moving items in the inventory.
  • To effectively maintain the safety stock and auto continuation of minimum order quantity of the stocks etc.

Techniques of Inventory Control

There are several techniques used for Inventory Control. Some of them are as follows:

Inventory Control

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#1 – Using Inventory Optimization Tools

These software’s are used to manage the account of inventory by considering the demand and supply variability of the products, and providing the evaluation of the number of materials to be stored in the warehouse for countering such situations.

#2 – Economic Order Quantity

This technique is used to evaluate the maximum quantity to order for the requirement so that the purchase cost and handling cost would be minimum for the company.

#3 – ABC Analysis

ABC analysisABC AnalysisABC analysis refers to the inventory management technique to identify items that constitute a significant part of the overall inventory value and categorize them into critical, essential and moderately more is used to manage the inventories by categorizing them in three grades based on the valuation of the materials. It helps in dividing the resources in a better-managed way.

#4 – Batch Making

In this procedure, the materials are ordered and managed in unique batch numbers which enable to manage the expiry and timely use of the product.

#5 – Barcode Scanning

This method is used to manage the finished goods inventoryFinished Goods InventoryFinished goods inventory refers to the final products acquired from the manufacturing process or through merchandise. It is the end product of the company, which is ready to be sold in the market. read more. A unique barcode is assigned to a carton of the products. It is scanned in case of production, dispatch, and in any other movement for tracking of that product. You can follow this in many other ways for inventory purposes.

Importance of Inventory Control

  • Better management and implementation of inventory control help the company in case of a sudden increase as well as a sudden decrease in demand for the products.
  • They help the company to provide better services to customers and timely services as well.
  • The better management of inventory stock reduces the risk of deterioration of stock as well as wastage of stocks. The controlling and storing of only required stock also helps in case of any unforeseen extraordinary incidence that may happen in the future resulting in loss of the stocks.
  • Inventory control plays the role of a bridge for the inventory in case of a major difference in the planned production and actual production by the production team and function due to any unforeseeable reason.
  • Avoiding overstocking and understocking of the stock of an inventory;

Inventory Control vs. Inventory Management

  • Inventory control is used to control and manage the stocks that are already in possession. In contrast, inventory management is used to evaluate the stock of the material which needs to be stored.
  • Inventory control manages the way in which the inventory to be stored in the warehouse such that the storing and managing the cost of the stock is minimal. In contrast, the inventory management decides the quantity of the material needs to be stored by predicting the foreseeable demand or production of the company.
  • Inventory management involves the strategic planning and evaluation of the market and business environment for the management of inventory. In contrast, inventory control involves the management decision regarding the tracking and maintenance of those stocks.




Inventory controlling is an essential part of the management decisions as it reduces significant risks and costs relating to the inventory (asset for the company). The better controlling and tracking of the inventory helps the company to locate the location of the stocks. It helps in the effective working of the storage warehouse and organization and results in minimum material handling and storage costs.

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