Product Admin, Distribution and Stock Control in Manufacturing Business

Keep a logical amount of parts in stock: For example, if you usually need between 800 and 1200 of a part each month; it would make no sense ordering 2000 unless you got a large discount for bulk purchase; and it would make no sense ordering 500 as you would probably run out.

“You can use common software to keep track of parts, stock and orders.”

Remember that you can use simple computer systems (using software such as Microsoft Excel) to keep track of parts, stock and orders, to help ensure more efficient running of your business.

A popular method of stock control is called a “just in time” system, which involves keeping stock levels as low as possible, with the aim of parts arriving just before they are needed. This is aimed at keeping storage costs as low as possible, but does run the risk of you being left without necessary parts in the event of a large order.

Finished Products

Once your product has been made, you need to manage the storage and distribution of your finished stock to help keep storage and other costs down. Part of this process is managing the amount of stock you produce, avoiding over production whilst being sure of meeting demand. A famous example of bad stock management involved a large computer company who manufactured millions of copies of a game before release, expecting it to sell massively; when the game flopped they were left with 3million unsold products!

If your product has a limited lifespan (e.g. Electronic equipment that will be out of date after 6 months) then you need to carefully consider stock numbers, otherwise you could be left trying to clear old stock at reduced prices.

Distribution

A vital part of administrating and selling your products is deciding how they will be distributed; this affects the costs, price and profit of your products; as well as affecting how accessible they are for customers.

There are three common methods of distribution:

• Keeping stock in your premises or a warehouse, and distributing directly to customers
• Distributing to a number of local warehouses, which then distribute to the customer
• Distributing to regional warehouses, which distribute to local centres, with then deliver to customers

“If your customers are local, it would make sense to distribute from a single place.”

The success of each system will depend on the amount of orders you have, as well as the locations of your customers. If all your customers are local, it would make sense to distribute from a single place; where as if your customers are scattered, a regional system may be more effective.

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