Although it may not be the most attractive aspect of managing a company, stock management has a significant impact on profitability in the Philippines. Whether you’re managing a small sari-sari store, a growing online shop, or a large warehouse, keeping track of your inventory is crucial to staying profitable and minimizing waste.
Many companies continue to use outdated systems or manual tracking, which results in shortages, overstocking, and considerable stress. Having a solid foundation on your products is not only beneficial, but also necessary, as more small businesses go digital and the competition becomes more brutal.
That’s why having the right stock management software could enhance your business operation easily. In this article, we will discuss the definition of a stock management system and its importance for your business operation. Basahin ang artikulong ito hanggang sa dulo para wala kang makaligtaan!
Key Takeaways
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Table of Contents
What is Stock Management?
In the Philippines, stock management is the process of managing, arranging, and keeping track of the products and supplies used in the business operations of various industries across the nation.
This covers everything from monitoring the amount and distribution of items to forecasting demand, controlling inventory levels, preventing shortages or surpluses, and ensuring that commodities are transported and stored effectively.
With assistance from the Department of Trade and Industry (DTI) and private IT companies offering reasonably priced point-of-sale and inventory systems, there are increasing efforts to support local businesses in modernizing.
To meet customers’ demands for speedy delivery, vendors have also been pressured by the growth of e-commerce sites like Lazada, Shopee, and TikTok Shop to enhance their stock control.
Why is Stock Management Important?
In the Philippines, effective stock management is particularly crucial for companies to remain productive, profitable, and competitive. Businesses must carefully plan and manage their stock due to the country’s approximately 7,000 islands, which often experience supply chain disruptions, transportation delays, and inventory shortages.
This can lead to problems such as overstocking, stockouts, or product spoilage, particularly in fast-moving industries like retail and food. Larger companies and online sellers are increasingly adopting modern systems, such as point-of-sale (POS) software or cloud-based inventory management tools, to automate and streamline their processes.
Effective stock management reduces unnecessary expenses associated with excess inventory, ensures that products are available when customers need them, and helps prevent losses from overstocking or spoilage, particularly in sectors such as food and retail. Accurate stock management is now crucial for meeting consumer demands and maintaining a competitive edge in a highly competitive marketplace.
Types of Stock
In the Philippines, businesses typically manage multiple types of stock, depending on their industry and operations. Here are the four main categories of stock:
1. Raw materials and components
These are the fundamental materials used by companies to make their products. Different industries in the Philippines use other raw materials. For instance, a furniture maker may use wood, nails, and varnish, but a bakery might need wheat, sugar, eggs, and yeast.
2. Work-in-Progress (WIP)
This term is used to describe products that are not yet ready for sale and are still being manufactured or assembled. For example, shirts that have been cut but not yet sewn or printed may be found in a nearby clothing factory.
3. Finished goods
These are finished goods that are prepared for sale to consumers. Clothing on display racks, packaged snacks, and bottled drinks are examples of finished products in a retail context, while assembled gadgets are examples in an electronic context.
4. Consumables
Consumables are items that a business uses regularly in its daily operations but do not form part of the final product. In the Philippines, typical examples include fuel for delivery vehicles, printer ink, packaging tape, cleaning supplies, or office stationery. Although they may seem minor, keeping consumables stocked is essential for maintaining smooth business operations.
Perpetual vs. Periodic Stock Management
Perpetual and periodic stock management are the two primary inventory management techniques used by companies in the Philippines. Each has advantages and disadvantages and is selected according to the business’s size, resources, and nature.
1. Perpetual stock management
Perpetual stock management is a system in which inventory levels are updated in real-time as sales and purchases occur. This system is commonly used by larger businesses, supermarkets, and growing online sellers. It utilizes digital tools such as point-of-sale (POS) systems, barcode scanners, and cloud-based inventory software.
Advantages:
- Real-time tracking of stock levels
- Easier to spot theft, shrinkage, or errors
- Efficient for e-commerce or multi-branch operations
Disadvantages:
- Requires investment in software and training
- Not practical for small businesses with limited tech access
2. Periodic stock management
Periodic stock management is a periodic inventory system that involves checking and updating inventory at set intervals, typically daily, weekly, monthly, or quarterly.
Sari-sari stores, small retail shops, or businesses in rural areas commonly use this. Inventory is manually counted using ledgers, spreadsheets, or basic point-of-sale (POS) systems, which lack real-time tracking capabilities.
Advantages:
- Low cost and easy to implement
- Suitable for businesses with a small product range
- Doesn’t require advanced technology
Disadvantages:
- Higher risk of stockouts or overstocking
- No real-time visibility on stock levels
- Time-consuming and prone to human error
Tips on How to Manage Your Stock
Businesses need to implement effective strategies to avoid common mistakes, minimize waste, and improve overall profitability. Here are a few tips on how to manage your stock:
1. Use a system that works for your business size
Simple tools, such as notebooks or Excel sheets, are frequently used by local shopkeepers or small sari-sari stores in the Philippines to keep track of their inventory. For a small number of products, this approach may be practical, but as the company expands, it becomes increasingly complex.
Purchasing inventory management software or a point-of-sale (POS) system is a wise investment for medium-sized to large enterprises or those with several product lines.
2. Keep a regular stock count
Frequent physical counts help confirm your documentation and identify inconsistencies caused by errors, theft, or spoilage. A busy restaurant or retail establishment in Metro Manila might perform daily or weekly counts.
A modest sari-sari store might perform a monthly stock check, which is often enough. By doing this, you can preserve accuracy and increase trust in your inventory data.
3. Avoid overstocking and understocking
In addition to wasting critical cash flow, overstocking puts products at risk of becoming rotten or outdated. Conversely, understocking may result in lost revenue and unhappy clients.
Companies in the Philippines, particularly those that deal with imported or seasonal items, must balance supply chain delays, local holidays, and festivals with demand forecasting and historical sales data.
4. Using a digital system
As mobile devices and internet access grow more common, many Philippine business owners are embracing digital tools.
You may update stock at any time and from any location with mobile-friendly inventory apps, which can also be integrated with online marketplaces like Lazada or Shopee. For small and medium-sized companies looking to expand, this digital strategy is quite beneficial.
5. Secure your storage area
Damage and theft can be costly. In the Philippines, these problems can be avoided by maintaining a safety stock inventory, putting locks on doors, restricting access to only trusted individuals, or even installing CCTV cameras. Additionally, keeping inventory well-organized reduces damage and facilitates inventory monitoring.
If you’re interested in learning more about how HashMicro Stock Management Software can enhance your company’s stock management, click the banner below to view our pricing scheme.
Effective Stock Management with HashMicro Stock Management Software
HashMicro’s Stock Management Software is the most effective and accurate way to manage your stock. It contains advanced features, including stock forecasting and product expiry management.
HashMicro offers a free demo, allowing you to experience the seamless functionality of its software firsthand. Discover how it simplifies stock management, ensuring your company avoids overstocking and stockouts.
Key Features of HashMicro Stock Management Software:
- FEFO, FIFO, and LIFO: HashMicro software implement First Expired-First Out, First In-First Out, and Last In -First Out systems to prioritize inventory with the earliest expiration dates to reduce waste and improve stock rotation. It adapts with the company’s preferred stock management to ensure safety stock aligns with product shelf life for efficient management.
- Stock forecasting: Stock forecasting predicts future inventory needs by analyzing historical sales and demand data. It helps businesses calculate safety stock accurately, ensuring they can meet demand fluctuations without overstocking.
- Stock optimizer per warehouse: The stock optimizer balances inventory levels across warehouses by analyzing stock movement and demand at each location. It ensures safety stock is appropriately maintained where it’s needed most.
- Stock reservations & reporting: Stock reservations allocate inventory for specific orders while generating reports on availability and usage. This helps businesses manage safety stock effectively by prioritizing allocations based on demand.
- Product expiry management: This feature tracks expiration dates and sends alerts to prevent overstocking expired goods. It helps maintain safety stock for perishable items without risking spoilage.
- Automated replenishment with run rate reordering: This feature automates reorder point calculations, ensuring timely actions to maintain optimal inventory levels, prevent shortages, and effectively meet safety stock needs.
- Integrated with barcode & QR code: Barcode and QR code integration enables real-time stock movement tracking. This ensures accurate data for calculating and managing safety stock levels efficiently.
Conclusion
For businesses to run smoothly and avoid stockouts, stock management is essential. Businesses can effectively meet client needs while avoiding disruptions from supply delays or changes in demand by managing stock accurately and efficiently.
HashMicro Stock Management Software helps companies manage their inventories more efficiently. HashMicro ensures that businesses maintain accurate stock balances, reducing risks and enhancing operational efficiency through real-time tracking, automated safety stock calculations, and demand forecasting.
To see how HashMicro can help your company, try our free demo and consultation. Galugarin ang mga tampok ng software to see how it may assist you in managing your inventory with ease and in making wise decisions to enhance your inventory procedures.
FAQ About Stock Management
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What is the basic goal of inventory management?
The primary goal of inventory management is to ensure that all necessary materials are readily available whenever the production department requires them, thereby preventing production from being halted or slowed down due to a lack of resources.
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What is the main role of stock management?
Stock management is the practice of ordering, storing, tracking, and controlling inventory. Stock management applies to every item a business uses to produce its products or services – from raw materials to finished goods. In other words, stock management covers every aspect of a business’s inventory.
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What are the duties and responsibilities of stock management?
It involves planning, monitoring, and controlling inventory to align with the company’s operational needs. Key elements of stock management include: Monitoring Stock Turnover Rates: Understanding how quickly items sell and adjusting stock levels accordingly
