At the end of the year, the quiet Christmas/New Year holiday period is the perfect time to take some of those important challenges that often get pushed aside during the busy periods. This month from our insider, Andrew Crowe, simPRO’s Client Services Manager, discusses the options of managing stock control within simPRO and encourages you to use this quiet time to plan and set up good stock control systems for your business for the New Year.

What is Stock Control?

Stock control is the ability to manage the costs and parts currently on hand and manage the actual material costs on jobs. Just as the schedule is important to manage labour and labour costing, stock is just as vitally important in giving accurate figures and P&Ls for the jobs, quotes and the overall business.

Why Manage Stock?

Carrying too much stock is a drain on your cash flow, not enough or incorrect stock can slow down work and poor controls means that costs are not correctly transferred through to the job, often having a negative impact on the profitability of that job.

Correct control and assignment of costs to jobs will speed up your job completion rate, improve cash flow and deliver accurate P&L reports per job.

You know you should be doing it, so here are some tips for getting started or reviewing your existing system.

Types of Stock Control

There are two ways to manage stock in simPRO. Single location stock control and Multi location stock control. Single location means that a part is either in stock (regardless of where it may be located) or not in stock and Multi location expands on that theory by showing that a part is in stock and where in stock it is.

Note: Multi Location is not available in simPRO Lite.

Single Location Vs Multi Location

Before you begin creating the storage locations and performing stock takes in your business, there must be a conscious decision made about what method will be used to manage stock. Single location stock control is the easier method to maintain especially if stock control hasn’t been previously implemented. Multi location does give greater control over stock, but considerable more effort is required to maintain the stock.

Single Location

Single location stock control is easier to maintain. The theory is that you are just keeping a record of what is in stock, no matter where it is kept (main warehouse, work site, engineers vans).

As shown in Figure 1, there are two main ways for parts to come into stock and two ways for parts to come out of stock. The main flow is that items are purchased via a purchase order and then allocated (sold) to a job.

Stock takes are necessary to correct what the system says should be in stock against what is actually in stock. Items’ coming into stock via a stock take means the parts have either been obtained without purchasing (second hand resalable parts), were purchased without a simPRO PO or were incorrectly added to a job. Items’ coming out of stock via a stock take means the parts were used on a job but not allocated in simPRO or have been lost/damaged.

It is recommended to perform quarterly stock takes but they should be no less frequently than 6 months to maintain good stock control.

Multi Location

Multi Location stock control can be more difficult to maintain as it requires more information from technicians. When using Multi location stock control, on a job not only do you assign what part was used, but where in stock did it come from, especially if there is more than one vehicle on the jobsite.

As shown in Figure 2, with Multi location stock controls show not only the parts in stock, but where those stock items are located. As per single location stock control, the methods for items to come into stock and leave stock are the same, however you now need to account for these stock shortfalls or unexpected additional items for each of the multiple storage devices that stock is kept. Where multiple locations can become difficult is with the transfer of stock between storage devices. When stock does move, stock transfers must be completed, i.e. from the workshop to a van or between vans.

When working with Multi location stock control we recommend monthly stock takes but they should be no less frequently than 3 months. Also weekly top 20 item stock takes are also recommended to keep those high moving items in check.

Stock Control in simPRO

As you may already know (or would expect), simPRO has many ways in which to help you manage stock control. This includes full stock take and stock transfer menus in simPRO, allocating stock from a warehouse to a job and even correct stock allocation from the correct warehouse using any of the simPRO Mobile systems.

In the simPRO Mobile digital pen system, we even have a form to allow for stock transfer  from one warehouse to another – great for when the engineers are on site and need to move items from one van to another.

Conclusion

Whether you have already been running stock control and performing stock takes or if you are yet to implement any stock control processes, the New Year is a great time to evaluate where stock is at.

Maybe you are already running a single control system and find it working well, you might consider making the step into multi location for greater control, or maybe you are running multi location but because you have been busy it has been getting out of hand, then you might consider taking a step back to single locations.

For more information on adding simPRO Mobile to your business or to receive further training on stock control or any other simPRO module, as always contact us anytime.