Inventory tracking allows you to keep track of the quantity of goods you have as you buy and sell products. An inventory tracking system operates in real-time so it keeps accounts accurate. There is no delay, so all product information should always be up-to-date. So, why do you need an inventory tracking system and why it is so important? Inventory is often a company’s biggest asset. Keeping track of your inventory means keeping track of money and therefore having a solid understanding of what is going on in a company.
Let’s start with the basics. Inventory is a quantity of goods that is owned and kept in storage by a company. These goods could be completed products that are ready to be sold to consumers. On the other hand, inventory may be made up of raw materials and components that are used later to assemble and produce other goods. A business could sell raw goods to other businesses or just store the raw goods to use in their own manufacturing processes later.
Manual and automated inventory tracking
There are two divisions of tracking inventory, manual and automated. Either way, a tracking system is extremely important to monitor inventory. Historically, manual systems utilised a card system, sometimes referred to as cardex. With this system, manual entries had to be made on a card every time an inventory item was purchased or sold. With some simple subtraction, the new on-hand amount would be tallied up. The next step-up in manual inventory, is to use an computerised spreadsheet. Effectively, the business still must enter the inventory numbers manually, but the data is saved on the computer rather than a card.
Through innovation and technology, a much more effective, user-friendly and reliable system has been created. Online inventory management software has been developed to track inventory automatically. It is a real-time system that provides offers instant information on the product, the ability to tracking the product movements and helps to reduce human errors along the way. This system allows a company to monitor inventory throughout several different stages. In turn, informed forecasting decisions can be made and trends can be identified.
Methods of inventory tracking
There are several methods and tools used to track inventory. A very common tracking method is the barcode, otherwise known as a universal product code. You will notice a barcode on most products you buy. They get scanned at the point of sale terminal and provide a detailed and effective way of tracking where an item goes, from beginning to end. The barcode tells information about the product type, the manufacturer, and gives it a specific product code.
Additionally, radio frequency identification (RFID) is used to track inventory both actively and passively. Active RFID is needed when the inventory you are tracking needs to be secure, whereas passive RFID can be used with handheld scanners where secure environments are not as necessary.
With an online inventory management system, tracking can become a much more automated process. The database can hold information about every single item in your inventory and makes it accessible to retrieve current information. Inventory tracking systems can make stock taking procedures much more fluid and help keep tabs on your most important asset!
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.