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Ways Space Planning Can Help With Stock Control
DotActiv TeamJan 30, 2018 4:57:36 PM6 min read

3 Ways Space Planning Can Help With Stock Control

Stock control, or the lack thereof, can prove disastrous to your retail business. That’s because controlling your stock is vital to the long-term health of your business. If you don’t have control of what is coming in or out of your stores, you’ll have a hard time making money. More than that, you’ll struggle to make a profit.

Of course, it’s not just about making money and profit. Having control of your stock is just as crucial for you if you want to keep your customers happy and satisfied.

That said, there are ways in which you can ensure you have better control of your stock. More to the point, there are various ways in which space planning can help you.

What is stock control (and why is it essential to understand it)?

We’ll get to the different ways in which space planning can help with your stock control a little later in this piece. For now, it's essential to understand not only stock control but to also look at why it’s important.

Let’s start with its definition. Simply put, stock control refers to the proper and careful management of stock levels in your stores. That includes managing the stock (merchandise) that you have on your store shelf as well as any extra stock that you have in your storeroom and distribution center, which you’d use to keep your shelves full and replenished.

As for its importance, instead of merely saying it’s so and leaving it at that, it’s worth explaining by considering what will happen if you don’t have control.

As noted in a previous piece about stock turn, the rate at which your business turns its stock is a good indicator of its health. The faster your stock turns, the better. But it doesn’t help if there is no indicator or efficient process to warn you when you need to replenish your stock. The result is that you’ll soon find your stores running low on stock to the point that you might not have any in store, including in your storeroom. And while low stock can cause headaches, out of stocks can cause significant damage to your business.



A good antidote here is planogram software. We’d even go so far as to argue that it’s crucial since it can help you to make efficient decisions around initial orders, slow-moving lines, the minimum display quantity of your products, and more.

On the other hand, you can quite easily find your store overstocking on products. That becomes an even bigger problem for you if those products that you’ve overstocked are the wrong products. What’s more, they could also be slow movers. That means you’ll have less shelf space and storeroom space for those products that account for the most sales in your store.

How can space planning help with stock control?

1. It can help you understand how much stock to order

When it comes to having proper stock control, space planning has you covered. That’s because firstly, by making use of the space planning process, you’ll have an understanding of how much stock to order.

How? By consulting the Days of Supply (DOS) on your planogram, you can quickly figure out when the stock on your shelf will sell out.

For example, you place an order for flour once a month. You know that due to consumer demand, 100 units of flour will be ten days' worth of stock. You’d need to order 300 units to last a month. You can thus set your replenishment engine to kick in ten days before you run out of stock if, for example, it were to take five days to deliver. That’s so you don’t sit with a period where you’re out of stock of products.


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Of course, consumer demand can go up to the point that one case pack sells quicker than anticipated. In that case, you can adjust your replenishment engine to kick in sooner.

Just to note, with regards to DOS, these five factors can influence it, so they are worth remembering. It’s also worth reading this piece about how to calculate DOS and what it measures.

That said, you also need to consider your shelf space and compare that to the size and shape of the products you want to stock. After all, there is only so much space available on your gondola, and the last thing you want is to sit with stock that you can’t fit on your shelf. It is here where space planning software makes your life easier.

2. It can help you understand when your stock needs to be ordered

Besides knowing how much stock you need to order, in consulting the retail data that is used to build your planogram, you’ll also see when you need to reorder your stock.

That said, when it comes to reordering stock, you do need to keep your suppliers in mind. By that, we mean that while some stock could reach you within five days to a week, stock from other suppliers could take longer to arrive. That’s down to the location of your supplier concerning where your stores are situated.

Let’s take the same example as above but change it up. Your supplier of flour happens to have a close warehouse. The order to actual store delivery takes five days. And you know that your stock will run out in five days. So, you’d reorder it ten days before it runs out. The same reordering principle can be applied to any of the other products for your store.

That said, you must also take into consideration the real possibility that your supply chain might break down. And don’t think it’ll only affect some of your suppliers. While it could happen more often when your suppliers travel long distances, it can occur just as frequently for a supplier that is nearby.

By keeping this in mind when reordering stock, it’ll be that much easier to meet customer demand while also preventing empty shelves.

3. It can help you to not over or understock your shelves

As much as your planograms can help you figure out how much stock to order as well as when to order, it’s just as useful to help find the balance between over and under-stocking your shelves.

You can do that by planning how many products (SKUs) to place on your shelf as well as deciding what percentage of all of those products that arrive at your store should be held in your storeroom.

For example, you stock 50 units of Baked Beans on your shelf and 50 units in your store room. As soon as you hit 25 units in your storeroom, you can place your next order. By only reordering when your stock has declined to that level, you’re ensuring that you’re not wasting capital that could be used elsewhere in your business.


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More importantly, you won’t face the headache that comes with ordering too soon or late.

Order too soon, like halfway through the month, and you could find yourself sitting with too much stock. Just imagine making that mistake for 100 of your stores instead of just one.

The opposite can be said for ordering too late. Do that and you’ll find your customers walking into your store and walking out because you can’t cater to their needs.


At DotActiv, we offer specialist category management software and services that can help your retail business improve your inventory efficiency and stand out from the crowd. Interested in learning how you can have better control of your stock levels? Click on the red button below to get your free demo and let us help you. 


DotActiv Team

The DotActiv team comprises category management experts lending their retail experience and knowledge to create well-researched and in-depth articles.