Inventory tracking is the process of monitoring a company’s inventory levels. It can be done manually or through technology such as bar codes, RFID tags, and software. Inventory tracking aims to ensure that a company has enough to meet customer demand without too much inventory that will tie up capital and resources.
Factors to Consider in Inventory Tracking
Several factors need to be considered when conducting inventory tracking. These include the type of inventory being tracked, the tracking frequency, and the required level of detail. The type of inventory being tracked will determine the methods used for tracking. For example, raw materials will need to be tracked differently than finished goods. Raw materials may be tracked by lot number, while finished goods may be tracked by serial number.
The frequency of tracking will also vary depending on the type of inventory. Raw materials may only need to be tracked when received, while finished goods may need to be tracked every time sales occur. The level of detail required will also vary depending on the type of inventory. Raw materials may only need to be tracked at the aggregate level, while finished goods may be tracked at the individual item level.
Benefits of Inventory Tracking
Several benefits can be gained from inventory tracking. These benefits include improved customer service, reduced inventory costs, improved cash flow, and reduced theft and loss. Improved customer service is possible because tracking inventory can help to ensure that products are available when customers want them. It is essential for businesses selling perishable goods or goods with a short shelf life.
Reduced inventory costs are possible because inventory tracking can help to ensure that inventory levels are maintained at the appropriate level. It can help to avoid the need to purchase new inventory when levels are low and can help to avoid the need to dispose of excess inventory when levels are high.
Improved cash flow is possible because tracking inventory can help to ensure that products are available when customers want them. It can help to avoid the need to purchase new inventory when levels are low and can help to avoid the need to dispose of excess inventory when levels are high. Reduced theft and loss are possible because inventory tracking can help to ensure that products are not stolen or lost. It is significant for businesses that sell high-value items.
Considerations when Choosing an Inventory Tracking System
There are several factors to consider when selecting the best inventory tracking system for a business. The first factor is the type of business. Each business has different inventory tracking needs. The second factor to consider is the size of the business. The third factor is the budget. Many different inventory tracking systems are available, and the price can vary significantly. The fourth factor is the features of the inventory-tracking system. The best inventory tracking system for a business depends on the specific needs of the business. There is no one-size-fits-all solution. Businesses should carefully consider all the above factors before making a purchase.