Companies invest huge amounts of money in inventory, since it forms the backbone of many firms. Therefore, it is essential that managers have oversight of where their inventory is, how well it is selling and much more. Inventory tracking is a useful means of doing this.
Big or small, companies use various methods of inventory tracking to trace the whereabouts of their stock. Inventory tracking, depending on the form it takes, can help managers to follow the arrival of their stock, the amount and their location. Certain inventory tracking systems also alert users to transactions made, and may also allow users to follow purchases as they move along the supply chain to their final destination.
Retailers and wholesalers tend to stock inventory that primarily consists of finished products, ready for sale. Conversely, manufacturing companies may stock inventory made up of a combination of raw materials and components that will then be made into finished products. Since inventory is therefore a company’s single largest investment, many invest a lot of money in it, and therefore tracking is essential for successful inventory control.
Types of Inventory Tracking
Nowadays, most companies use barcoding software and hardware to track their inventory. Barcoding systems are a fast and accurate method for tracking inventory – a small image attached to a product is scanned with special light technology which instantly retrieves the products details. This information is then sent to the attached computer system, which allows the user to pull up the products information.
Active Radio Frequency Identification (ARFID) is another form of inventory tracking, which is a reliable method particularly in environments with security issues or ones which require real-time tracking information. Passive RFID is another method, used mostly where there are minimal security issues and where handheld scanners are used.
In the past, many companies relied on an inventory tracking system called the Card System or Cardex. In this system, each product had an accompanying physical card which was used to record sales of that specific item. With each purchase made of that particular product, a new on-hand amount was physically recorded. In time, this system was left behind for more efficient systems like barcoding, a reliable method for inventory control. Manual inventory tracking is still used today, however information is usually recorded in spreadsheet programs rather than on a piece of paper or card.
Importance of Inventory Tracking for Inventory Control
A reliable method of tracking inventory is essential for the success of any business, big or small. Inventory tracking allows managers and staff to oversee the flow of their products at each stage of the supply chain. This not only makes life easier for the firm, but it also means that managers will have a reliable method for inventory control. Controlling the flow of inventory can help managers to be proactive in managing stock, and may provide useful insights into sales patterns.
Inventory tracking allows managers to oversee stock levels, stock locations, the welfare of certain inventories (whether damaged, returned or faulty) and may also help managers to deter thefts. In this way, tracking becomes an essential tool for inventory control in general, which is vital for the success of any business.