Stock management in a company is always important. The profitability It depends on the management of the concept that the company has, as we will obtain more or less benefits if its storage is optimal. But what is it exactly?
Stock is any good that is stored to be later sold or used in the production process. Normally, the stock is associated with a warehouse (hence it is important to know how to manage it) although it does not always happen: there may be stocks at the time a customer is moved.
From the previous definition, we can deduce that there are stock units that are ready to be sold to the final consumer, and others that are not, since when the stock count was carried out, they were waiting to enter a new production process (stocks in process)
It is important to have a good management of these stocks, because as we have already said, the profitability of the company depends on them. Today there is a multitude of computer software capable of keeping track of each existence that enters and leaves the warehouse to make this possible.
Having just stocks (just in time) allows the company to achieve good profit levels. But, like everything in life, it will never be perfect, since such a model can fail for multiple reasons. The most frequent reasons is that the supplier of certain raw materials fails us in the supply period (when they send us new units).
To prevent this from happening, the most common is for the company to have asecurity stock to ensure that if the above described happens, it can be "padded" with said security stocks.
Tool to calculate safety stock
Finally, it should be noted that the demand forecasts that the company has will have a decisive influence on the amount of stock in your company. In this way, calculating said demand in the most precise way will allow to obtain a correct number of products to manufacture and avoid creating unnecessary costs and expenses.