The Difference Between Inventory and Stock
The question of whether there is any difference between "inventory” and “stock” has been the root of much unnecessary confusion.
Many business owners, retailers, and manufacturing experts use both terms interchangeably.
Some note that “inventory” is used more in US English, and “stock” in UK English.
Honestly, this is mainly a matter of personal preference and shouldn’t lead to trouble.
But minor distinctions can be made, so you should be aware of those too. It could come in handy if you have to explain or describe your inventory management practices accurately.
One area that you can be more specific with is how you distinguish the types of inventory your business deals with.
Some dictionaries define stock as referring to the finished goods you have ready for sale. This is why the term “in-stock” is commonly used in retail.
Whereas “inventory” can refer to finished goods as well as raw materials and works-in-progress.
So, it’s a good idea to mention the type of inventory you are talking about if there is room to cause uncertainty.
Here are the main forms of inventory:
1. Raw material inventory;
2. Work-in-progress inventory;
3. Finished goods inventory;
4. MRO (Maintenance, Repair, Overhaul); and
5. Assembly items.
Remember, the word “inventory” can be replaced with the word “stock” in these terms and still be perfectly valid.
It just makes life easier to be a bit more specific sometimes.
Inventory Management vs Inventory Control
So, we found that inventory and stock are mostly the same, now for inventory management and inventory control.
Because like inventory and stock, these two terms are often used interchangeably.
But unlike with inventory and stock, equating inventory management and control is inaccurate.
Inventory control is one part of the broader discipline of inventory management. Think of inventory control as a slice of delicious inventory management pie.
Inventory control is about knowing where your inventory is and making sure it travels to the right place for efficient and timely manufacture of finished goods.
Inventory management is concerned with the above, but also how fits it into the bigger picture.
This includes costs like purchasing raw materials, carrying costs of inventory, and inventory processing overheads.
You could say that inventory control is the organization and logistics of your inventory. The operational mind if you will.
Whereas inventory management is about how inventory fits into your overall business plan and success metrics. It makes sure production is efficient enough to be profitable.
Both are essential and should be understood as best as possible.