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A Comprehensive Guide to Inventory Control System

An inventory control system is a critical tool that can help you track and manage your stock levels effectively. As a company or a business grows and expands, keeping track of inventory becomes increasingly complex. This makes it challenging in making sure that goods are available when needed while avoiding stockouts or overstocks.

Nonetheless, an effective inventory control system can streamline the inventory monitoring process, automate manual tasks, reduce waste, and optimize supply chain operations. This article will explore the definition of an inventory control system, its types, and why it is important for you and your business.

What Is an Inventory Control System?

Managing your inventory is crucial for running a business, as it enables businesses to maintain appropriate stock levels for fulfilling customer demands. An effective inventory management approach can help increase profitability by reducing the cost of goods sold and improving sales through better stock availability. This approach can be done with an inventory control system.

This system is a technology-based solution that manages and tracks a company’s goods throughout the supply chain, integrating purchasing, shipping, receiving, warehousing, and returns. A good inventory control system automates manual processes, provides an accurate inventory count, and helps businesses maintain optimal stock levels by notifying them when to reorder.

2 Types of Inventory Control System

Nowadays, advancements in technology have led to the integration of machine learning. This is because of the significant changes in the inventory control systems over time. Due to the changes, now there are two types of inventory control systems that we use.

Perpetual inventory system

It is a type of inventory control system that updates inventory in real-time. The system operates by scanning the barcode of a product when it is sold, instantly removing it from the global inventory database. Conversely, when a new product is received, it is scanned and added to the database.

All parts of the system have access to the same database, enabling an accurate accounting of inventory levels without the need for manual inventory counts. Other than that, this system also provides a highly detailed view of inventory changes. It is suitable for businesses of all sizes, especially those with high sales volume or multiple locations.

inventory control system

Periodic inventory system

A periodic inventory system involves updating inventory periodically by conducting physical counts of goods on hand at specific intervals. Unlike perpetual inventory systems, where inventory levels are continuously tracked, a periodic system relies on manual counting. This can be time-consuming and labor-intensive.

This manual counting method can cause problems when fulfilling orders since the inventory count may be inaccurate at the time of sale. Therefore, a periodic inventory system is more suitable for small businesses with limited inventory since it would be impractical to manually count every SKU for larger stores.

Also Read: What Is ERP System Inventory Management and Its Benefits

The Importance of Inventory Control System

It is essential to have products readily available when customers demand them. However, this involves various complicated processes. Therefore, implementing an inventory control system is important to help automate and manage the processes, and here are the reasons why.

Real-time inventory management

Real-time inventory management is available through a perpetual inventory system, which continuously updates inventory levels globally in response to sales, purchases, manufacturing, or returns. By maintaining an accurate and up-to-date inventory, businesses can analyze inventory flow to establish effective reorder points.

This ensures that stockouts and overstocks are avoided. Additionally, real-time inventory management can benefit employees. Providing them with an accurate view of inventory status can lead to better decision-making and reduce the risk of stockouts.

Streamline logistic workflow

inventory control system

Streamlining your logistic workflow is crucial for successful supply chain management. Due to the complicated supply chain process involved in delivering products to customers, it is important to have an efficient inventory control system that enables you to track each step of the process. With this system, you can easily identify what slows down your logistic workflow and make necessary improvements to enhance efficiency and increase productivity.

Cost saving

Cost saving can be done with an inventory control system. The system can prevent various costs associated with inaccurate inventory. When inventory levels are not accurately tracked, it can result in backorders and lost sales. In contrast, overstocking can lead to increased expenses, such as storage costs, insurance costs, and taxes. However, maintaining optimal inventory levels with an inventory control system can help reduce costs and increase profitability.

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Reduce manual labor inaccuracy

Inaccuracies are potential risks of manual labor in tracking inventory. Which is why you should use an inventory control system. Utilizing the system helps you monitor the entire process, starting from purchase order to customer delivery. It can eliminate the possibility of human errors along with theft.

Boost customer experiences

In the current times of rapid delivery, customers have high expectations for receiving their orders promptly. Inaccurate inventory records can cause a customer to place an order for an item that is displayed as available but is actually out of stock.

As a result, the customer may experience a delay or cancellation of their order. This will lead to dissatisfaction with the shopping experience. This could hinder the customer from making future purchases from the store. Therefore, ensuring accurate inventory records is crucial to boost customer experiences and enhance their satisfaction.

Best Inventory Control System Recommendation

inventory control system

There are many inventory control systems you can use for your business. One of the best recommendations is HashMicro’s inventory management system. With this system, you can seamlessly track inventory, monitor stock, and optimize inventory management.

In addition, there is also an operational dashboard. It allows you to keep track of your current inventory, as well as the progress of internal transfers, incoming shipments, and outgoing orders. All this tracking is done in real-time from a single dashboard.


Inventory management with inventory control system plays a crucial role in the success of a business. An effective inventory control system can simplify the management of inventory by automating manual tasks, optimizing logistics workflows, and providing a real-time view of inventory levels. You can utilize the system from HashMicro. In addition, you can claim Productivity Solutions Grant up to 50%. For further details, contact us here.

Interest in getting savvy tips for improving your business efficiency?

Alexandra Lyana
Alexandra Lyana
A Junior Content Writer at HashMicro. Eager to learn new things and improve my writing skills.


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