Accurate inventory control is a serious business and organizations are increasingly recognizing the importance of implementing sound inventory management practices within their organizations. How then do we go about tracking inventory? There are two approaches, the traditional method of manually tracking and recording the flow of goods into and out of your business, or utilizing technology for a more practical automated approach.
This old-school method of inventory tracking is relatively unproductive, taking up valuable time and resources that could be better spent elsewhere in your business.
Think about the process required just to set-up and manage a manual system. First you must create rows and columns in a computer spreadsheet or inventory log book. Rows need to be labelled with product names and descriptions, then each column labelled with the date, original counts, any applicable expiry dates and quantities remaining.
Next you need to apply price tags to all products with corresponding information that accurately matches the product name entered in your records. As each item is sold the price tags can be removed and used to record the sale.
Every transaction must be accounted for, continuously updating item quantities by subtracting sales from the previous total. It is also necessary for physical counts to be undertaken on a regular basis to ensure recorded counts match physical stock quantities.
Manual tracking may be okay for very small businesses with simple operations and slow inventory turnover. It certainly allows for the condition of goods to be assessed when counting stock. Manual processes however, are labour intensive and require continuous monitoring to keep up to date with on-hand inventory. They are also susceptible to greater risk of human error and inaccurate inventory counts.
Automated inventory systems offer numerous benefits. Automation increases operational efficiency, improves tracking accuracy and will help to eliminate human error. Software systems using barcode technology and radio frequency provide advanced inventory management and optimized workflows.
RFID readers and portable barcode scanners immediately identify products on arrival and track these products, in real-time, as they transition through the warehouse. This helps to quickly receipt and store goods. Scanners also help to eliminate, incorrect product counts, stock identification mistakes and data entry errors associated with manual processes.
Barcode labelling offers easy product identification and tracking which in turn, improves picking, packing and shipping procedures. Technology helps avoid any mistakes that can interfere with inventory accuracy, saving you both time and money.
Another advantage of automation is that it contributes to more informed decision making through the functionality that tracks seasonal variations, demand trends, buyer behaviour, and other tools that improve forecasting and business procurement decisions.
Let’s get to tracking inventory
Regardless of the method used, tracking inventory should be performed as a fundamental task in your business operations.
Transitioning from manual processes to an automated inventory tracking system can be seamlessly implemented, with little to no impact on daily operational activities. The cost to automate inventory systems is a worthy investment when compared to the numerous costs associated with inefficient manual tracking.
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.