Stock control

Habari Mwanafunzi! Welcome to Stock Control!

Ever walked into your local duka to buy sugar and the shopkeeper says, "Imeisha"? So frustrating, right? Or have you seen a fruit vendor with piles of mangoes that are starting to go bad? That's money being lost! Both of these problems—running out of things people want and having too much of things that spoil or don't sell—are what Stock Control is all about solving.

Think of yourself as the manager of a busy Naivas or Quickmart branch. Your job is to make sure the shelves are always full of the right products, at the right time, without turning your storeroom into a cluttered, expensive mess. That, my friend, is the power you will learn in this lesson. Let's get started!

What Exactly is Stock Control?

Stock Control, also known as inventory control, is the process of managing the goods a business holds in its warehouse or storeroom. It's all about balancing the costs of holding stock with the goal of always meeting customer demand.

Why is it so important? Well, good stock control helps a business to:

• avoid stockouts (running out of items and disappointing customers).
• reduce holding costs (like rent for the warehouse, insurance, and security).
• prevent stock from becoming obsolete (out of date, like old phone models) or perishing (going bad, like milk or bread).
• ensure production or sales can happen smoothly without delays.

Image Suggestion: A split-screen image. On the left, a frustrated customer stands in front of an empty shelf in a Kenyan supermarket, labeled 'Stockout'. On the right, a happy customer picks an item from a perfectly organized, well-stocked shelf, labeled 'Effective Stock Control'. The style should be vibrant and realistic.

Key Stock Control Terms You MUST Know

Before we dive into the calculations, let's learn the language of a stock controller. These terms are your new tools!

• Lead Time: This is the time it takes from when you order new stock to when it actually arrives at your warehouse. If you order cooking oil from a manufacturer in Mombasa and your shop is in Nakuru, the lead time might be 3 days.
• Buffer Stock (or Safety Stock): This is the extra stock you keep just in case of an emergency. Imagine a sudden rush of customers, or your supplier in Nairobi gets stuck in traffic. Your buffer stock saves the day!
• Re-Order Level (ROL): This is the specific stock level that triggers you to make a new order. It's not zero! You order new stock while you still have some left to sell during the lead time.
• Economic Order Quantity (EOQ): This is a fancy term for the perfect quantity of stock to order at one time to keep your costs as low as possible. Ordering too little means frequent delivery fees; ordering too much means high storage costs. EOQ is the sweet spot.

Let's Do The Math! The Formulas for Success

Don't worry, the math here is very practical. Let's imagine we run a small business called "Unga Bora Supplies" that sells maize flour. We'll use this example for our calculations.

1. Calculating the Re-Order Level (ROL)

This formula tells you when to order more flour.

Re-Order Level (ROL) = Maximum Daily Usage x Maximum Lead Time

Scenario: Unga Bora Supplies

Let's say the most flour you ever sell in a day is 50 bags (Maximum Daily Usage). And the longest it ever takes for your supplier to deliver is 4 days (Maximum Lead Time).

Let's calculate the ROL:

ROL = 50 bags/day * 4 days
ROL = 200 bags

This means: The moment your stock level drops to 200 bags, you must immediately place a new order with your supplier. This ensures you won't run out of flour while you wait for the new delivery.

2. Calculating the Economic Order Quantity (EOQ)

This formula tells you how much flour to order each time to be most efficient.

      _________________
     /      2 * D * O
EOQ = √  ---------------
            C

Woah, what do those letters mean? Let's break it down:

• D = Annual Demand (How many bags you sell in a whole year).
• O = Ordering Cost (The cost of placing one order, e.g., KES 500 for transport and admin fees).
• C = Carrying/Holding Cost (The cost to store one bag for a whole year, e.g., KES 20 for rent, insurance, etc.).

Scenario: Unga Bora Supplies (Continued)

Let's say you sell 10,000 bags of flour a year (D). Each order costs you KES 500 to place (O). And it costs you KES 20 to store one bag for a year (C).

Let's calculate the EOQ:

      _________________________
     /      2 * 10,000 * 500
EOQ = √  ----------------------
               20

      _________________
     /      10,000,000
EOQ = √  ----------------
               20

      _________
EOQ = √  500,000

EOQ ≈ 707 bags

This means: To be most cost-effective, you should order 707 bags of flour every time you place an order. This is your magic number!

Visualizing Stock Levels

This is what your stock levels look like over time. It's often called a "sawtooth pattern".

Stock Level ^
(bags)    |
          |
Max Level |   /\        /\        /\
          |  /  \      /  \      /  \
          | /    \    /    \    /    \
ROL ------|/------\--/------\--/------\-  <-- You order here!
          /        \/        \/        \
Buffer ---/---------------------------------  <-- Safety net!
Stock     |
          +------------------------------------> Time
          <--Lead-->
            Time

Practical Stock Control Systems in Kenya

Formulas are great, but how do businesses manage this in the real world? They use systems.

Image Suggestion: A busy, modern warehouse in Nairobi Industrial Area. A warehouse worker is using a tablet to scan a barcode on a box. In the background, there are neatly organized shelves labeled 'FIFO Zone' and 'ABC Analysis - Section A'. The atmosphere is professional and efficient.

• FIFO (First-In, First-Out): This is super important in Kenya! Imagine you are a kiosk owner selling milk and bread. You must sell the packets that arrived first before they expire. You put new stock at the back of the shelf so customers pick the older (but still fresh) ones from the front.
• JIT (Just-In-Time): This is where you order stock to arrive exactly when you need it, reducing storage costs to almost zero. A high-end restaurant in Westlands, Nairobi, might use JIT. They order fresh fish and vegetables every morning to be used that same day. They can't store fish for a week!
• ABC Analysis: This is a way of sorting your stock by value.
  • Category A: High-value, low-quantity items. A phone shop in Luthuli Avenue would treat iPhones as 'A' items. They are counted very carefully and kept very secure.
  • Category B: Medium-value, medium-quantity items. For the same shop, this could be phone chargers and power banks.
  • Category C: Low-value, high-quantity items. This would be screen protectors or simple phone cases. You don't count them every single day.

You've Got This!

Congratulations! You've just learned the core principles of stock control. This is a vital skill for anyone in warehousing, logistics, or even running their own business—from a small Jua Kali workshop to a massive distribution centre.

By understanding how to balance supply and demand, you can save a company millions of shillings and keep customers happy. Now, the next time you see a fully stocked supermarket shelf, you'll know the incredible planning that went into making that happen. Well done!