Purchasing

5. Managing Stock

5.1 Order at the right time.

• Monitor your stock turnover. Identify seasonal peaks and prepare forecasts.
• Plan when to re-order regular supplies.
• Avoid surprises. Develop a clear reporting system, so you know what is needed and when, from your employees.

5.2 Introduce systematic ordering.

• Set budget limits and make it clear who can authorise purchases.
• To reduce administration, give individual managers purchasing limits, rather than centralising all purchasing.
• Copy ordering information to the person placing the order, accounts people and goods inwards staff, as well as suppliers.
• Get suppliers and employees to fit in with your ordering systems and quote your order reference codes.
• Put one person in charge of petty cash, to cover small, one-off items.

5.3 Decide how you want to store your stock.

• Balance the advantages of discounted bulk orders with the benefits and risks of just-in-time ordering.
• Investigate the possibility of getting your supplier to hold stocks for you.

5.4 Avoid problems on delivery.

• Set up a reminder system for late goods.
• Note when goods arrive and store them in a known place.
• Make sure delivery notes are not signed until deliveries have been checked. If you must sign, note any reservations (eg 'goods not checked') and tell the seller.
• Make sure all relevant people are told when goods arrive.
• Ask for money off for minor faults at goods inwards inspections. Discuss recurring quality problems with the supplier.
• Check invoices to avoid incorrect charges, double billing and missing discounts.

5.5 Find out if e-procurement can help you.

• Group buying sites may provide opportunities to keep costs down.
• You can find bargains in online auctions eg www.goindustry.com for obsolete stock and secondhand machine tools