Monitoring stock movements to improve overall business efficiency

BY ARA Retail Institute
19 April 2019

Retailers that can streamline operations and reduce unnecessary inventory costs, whilst still providing consumers with products they desire, greatly improve the sustainability and profitability of their business. A key factor to guaranteeing this type of business success is establishing quality inventory management procedures.

Before providing any helpful information, here is some clarity around two key terms discussed in this article;

1) Inventory (stock) Management – defining the quantities and qualities of products held for sale with a strong focus on maintaining optimal stock levels

2) Supply chain – the movement of materials (stock) from their source to customers; from the purchasing of stock through to forecasting demand for that stock.

As mentioned, a focus of retail logistics is to stock shelves full of products that consumers want to buy which requires retailers to deliver on a wide variety of task and processes. Some of the key tasks include:

  • Transportation of stock
  • Warehousing
  • Shipment consolidation
  • Packaging and labelling
  • Inventory management
  • Merchandise distribution
  • Reverse logistics
  • Product tracking

The ability to fulfil these roles depends on the efficiency of a business’ supple chain. Being efficient involves aligning policies and procedures with cost-effective methods of stock movement through the supply chain. Common stock movement methods may mean using services such as FedEx, Australia Post, domestic couriers, or even a taxi. It matters not which method retailers opt for so long it is appropriate to the nature of the business and maximises efficiency. Decisions on which method to choose are often influenced by a combination of volume, frequency, distance, cost and convenience.

Evaluating stock movement methods is a critical part of maintaining business viability. Retailers should update their stock procedures to reflect any changes in business needs; be it entering a new market or an increase in stock demands, the demands of today may not always account for the demands of tomorrow. It is advised retailers are constantly mindful of whether there are any unconsidered opportunities for efficiencies. It may be beneficial to conduct formal, periodic reviews of procedures rather and ad-hoc evaluations.

Cost-effective solutions are the driving force of finding efficiencies in stock movement, but this is not just about making procedures cheaper. Improving cost-effectiveness can have a ripple effect on other areas of the business that are interrelated and dependent on one another. Some likely scenarios include:

  • Reducing the amount of daily stock deliveries so the logistics staff can complete other work such as restocking of shelves.
  • Improving product packaging which can decrease the level of waste and garbage.
  • Collaborating between logistics and merchandising to develop ideal stock levels which can help improve stock room layout.
  • Streamlining all online deliveries from the previous day to be picked up by a certain time rather than done so individually.

Considering other areas of the business will increase the likelihood that decisions made in relation to inventory management have an overall positive impact on the business. At a minimum the impacts that result from inventory decisions should be neutral. If there is no consideration, then retail may end up finding convenient solution in one area whilst simultaneously creating an inconvenience somewhere else. Thorough planning and consideration will ensure retailers make informed decisions without adverse effects.

About ARA Retail Institute

ARA Retail Institute is Australia’s leading retail training provider for both accredited and non-accredited learning programs. For more information, please visit:

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ARA Retail Institute

ARA Retail Institute is Australia’s leading retail training provider for both accredited and non-accredited learning programs. The ARA Retail Institute is a Government Registered Training Organisation (RTO) making it fully qualified to offer retail education programs to ARA members and broader retail industry.

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