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What is Inventory Stock? Read the Full Explanation Here

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A company consists of various operational divisions. Starting from managing goods purchase transactions, product sales, financial reports, inventory management to managing customer satisfaction. 

If you are the owner of a business unit (company), it means that you must be able to master the basics of all these operational activities. At the very least, you should at least understand the basics of the process. 

Why? So that you can manage your business well and be able to improve its performance. You don't need to master all the processes in an expert because the important thing is that you understand the process.

 At least when you understand the basics of each of these processes, it will be easier for you to manage the company because every business will definitely deal with it. Say, you are the owner of a manufacturing company.

Having a manufacturing company is certainly a lot of things - things that must be considered. Starting from activities to find suppliers of raw materials, processing raw materials, to selling finished products to customers. In addition, you also have to think about equipment and work equipment that will help the production process so that the quality of the product produced is good.

One of the operational parts of a manufacturing company is inventory management. Manufacturing companies must ensure that their inventory is up-to-date and always available. 

Why is that? Because manufacturing companies are very dependent on the amount of inventory available in the warehouse. The stock of goods must always be maintained so that the production and marketing processes of the manufacturing company run smoothly.

What is Inventory Stock?

Inventory stock is goods that the company stores in the warehouse for later sale in the future period. This inventory does not only include finished goods, but also semi-finished goods (Work in Process / WIP) and raw materials or raw materials.

Stocks of finished goods stored in the company's warehouse will be marketed for the next period. Meanwhile, stock of goods, which are semi-finished goods or raw materials, are stored by the company to be processed in the production process and become finished goods to be sold to customers.

The stock of inventory items in the company must always be sufficient and the amount updated. This is intended so as not to hinder the production and sales process. Therefore, a reliable inventory management is needed. If inventory management is messy, it will result in many company work processes being hampered.

How to Control Stock of Inventory Items?


To control the stock of inventory items, we can use various methods, including:

1. Product Grouping

The easiest and simplest way is to create inventory groupings. In this process of grouping goods, we can group goods according to company needs. 

For example, by grouping items that are easily lost and those that are not. Then items that run out quickly, and items that have a longer shelf life. This grouping will facilitate inventory management in organizing goods based on company needs.

2. Expensive Item Grouping

Expensive grouping items can also help the company's inventory management. Goods that have high prices will be more easily lost due to being stolen, therefore inventory management must be careful in controlling inventory. Thus the risk of loss to the company due to loss of expensive goods can be prevented.

3. Stock of Sold Goods Checking

The condition of the stock of goods sold is also one method that can assist the company's inventory management in controlling goods. 

Checking the condition of stock items by doing a partial stock-take can be done every day to check how many items were sold and how many items were left in stock. This can also help inventory management to always update the number of items owned by the company.

4. Discipline of the Stock Goods Process

Discipline in the process of recording incoming goods and outgoing goods is something that must always be done during inventory management. The discipline in question is always routinely inspecting goods and classifying goods according to their location and label. 

This discipline will reduce the condition of inventory stock that is messy and not updated. This discipline will also minimize the occurrence of loss of goods or excessive stock (overstock) which becomes an extra cost for the company. In the end it will prevent the loss of the company.

5. Stock of Restable Goods

Stock of restable items are goods or products that are no longer sold in the market or are no longer on display. These items must be controlled properly to avoid unrecorded stock of goods or loss of goods. These items must be grouped alone and not mixed with other stock items which can result in inaccurate stock items.

Inventory Manufacturing Companies 


Management of inventory in a manufacturing company is certainly very complicated, because manufacturing companies usually have more stock in their warehouses. For example, raw materials will be processed into semi-finished goods, then semi-finished goods are processed into finished goods. 

Not only manufacturing companies, other companies also need to do inventory management well. An example is a trading company.

The stock of the trading company's inventory must also be done carefully, because the trading company has quite a lot of products to sell in the market. Every product must be recorded and every transaction must also be recorded so that no harmful errors occur. 

If there are items that are damaged or lost and the company does not record it, then the company's financial statements can be messy. Companies can suffer losses because many items are lost or damaged and the cause is unknown.

Inventory management is also carried out by the company to avoid losses due to damaged goods. Inventory stock that is damaged and unrecorded can cause losses for the company. 

Why? Because the damaged goods cannot be sold to customers. On the other hand, if the damaged goods are raw goods or semi-finished goods, then the production process will be hampered. With damaged raw materials, the quality of the resulting product becomes poor and cannot be accepted by customers.

Errors in Managing Inventory Stock

There are three types of mistakes that are often made by the person in charge of inventory management, namely:

Rarely Doing Inventory Stock Calculations

If inventory items are rarely counted, the problems that occur in the company can become more complicated. For example, the stock of raw material inventory has been running low and inventory management is not aware of this condition, then the production process will be hampered and indirectly the product sales process will also be hampered, and that means the company's profits will also be late.

Disorganized Inventory Warehouse

One of the things that makes the inventory process complicated is an unorganized inventory warehouse. A messy warehouse condition will make inventory items easily damaged or lost.

Using the Manual Method

By doing inventory management manually, the chance of human error will be higher than the automatic system. Human performance may experience errors when calculating stock taking and items that are not recorded or lost. The process of recording the mutation of goods transactions also has a large chance of error if it is done manually.


Doing inventory management well will be beneficial for every company, whether trading company or manufacturing company. Inventory stock management will make it easier for companies to improve their performance and performance.

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