Effective Inventory Management and Physical Stock Control

Physical Control of Stock and the PGC Accounting Plan

The General Accounting Plan (PGC) tracks what enters the company for the subsequent sale or production process. The PGC makes the company appear more reliable in an economic and financial sense.

Objectives of the PGC

• Providing tools for the facilitation of accounting obligations.
• Standardizing accounting information.

Stock: Materials that have not been sold yet and are awaiting sale.

Common Types of Stock

• Standard: Meets product requirements from customers.
• Safety: Meets requirements that have not been considered in previous demand forecasts.
• Minimum: The minimum amount that can exist in the stock of certain products.
• Maximum: The maximum amount that can exist in the stock of a product.

Core Functions of Stock Management

Stock management determines what is lacking in respect to raw materials, procures the missing materials, and ensures they are replenished. It involves conducting inspections to verify existence and identifying material flow, including obsolete items. Finally, it delivers accounting information on all these procedures to the relevant department.

Primary Objectives

• Financial: Balancing capital invested in movement to level the stock with the welfare of the business simulator.
• Operating: Maintaining a positive balance between production costs and stocks.

Implementing Effective Stock Control

The planning and implementation of inventory control involves the participation of several factors: Production, Purchasing, Sales, Finance, and Accounting.

Key Functions of Control

• Determine material requirements based on current store levels.
• Ensure adequate and timely supply.
• Register all movements.
• Provide data for cost accounting.
• Identify and dispose of stockpiles of obsolete, damaged, and low-output items.
• Verify quantity and quality.
• Supply the location of existing stock for control purposes.

Areas Covered by Stock Control

• Raw materials
• Parts and/or accessories
• Manufacturing parts
• Finished goods
• Packaging
• Parts and supplies

Specific Objectives

• Financial: Capital management and efficiency.
• Protection of Property: Ensuring no loss occurs.
• Operatives: Maintaining a balance between service and price.

Stock Control Techniques

• Control of stock management
• Selective control of stock
• Inventory control