Keeping track of inventory levels is an important part of successful order fulfillment. By tracking inventory, you can avoid supply chain disruptions. To ensure accuracy in your fulfillment processes, you must know which products you have in stock, and in what amount in each of your warehouse locations. This requires a streamlined and more efficient inventory management and control strategy. The best way to accomplish this is with inventory management software. The right inventory tracking software can help you avoid errors and other issues and keep up with customer demand.
What Is Inventory Tracking?
Inventory tracking is the systematic approach to monitoring and managing products or items as they move through the supply chain. While smaller businesses might rely on traditional methods like pen and paper or spreadsheets, larger enterprises with multiple warehouse locations often turn to more advanced solutions. These solutions, such as various inventory management systems and software, offer real-time tracking capabilities, ensuring that businesses have up-to-date data on their stock levels.
What is Being Tracked?
Inventory tracking encompasses a wide range of products, from raw materials to finished goods ready for shipment. By monitoring the flow of these items, businesses can gain insights into sales trends and make informed decisions about restocking and resource allocation.
Who Uses Inventory Tracking?
Businesses in every industry and in every place in the world use inventory forecasting. It is one of the most efficient tools to help companies and customers of every size save money by avoiding delays and using your company’s resources wisely. Any company that deals with sales and purchases can learn a lot from inventory tracking and can make better decisions about optimization of resources.
What Is an Inventory Tracking System?
An inventory tracking system is an example of a software application or group of software applications that use data reporting and analysis to help businesses know where the items in their inventory are, how long they have been there, and when it is time to order more. Some inventory systems involve scanning codes or SKU numbers on boxes of inventory and updating their locations.
Inventory Tracking Benefits
The advantages of inventory tracking are manifold. Automated systems reduce labor costs, minimize errors, and enhance a business operations overall efficiency. Moreover, with a comprehensive system in place, businesses can also integrate their inventory data with accounting tools, ensuring financial accuracy.
Inventory Tracking Challenges
Inventory tracking is challenging because there are so many moving parts in the supply chain. You must keep track of when to order new parts or supplies and account for how long it will take the suppliers to fulfill your order. Their answer may depend on factors like weather, labor shortages, or availability of raw materials. Likewise, inventory control can only be error-proof if you use a sufficiently sophisticated inventory tracking option. If you keep all of your records with pen and paper, you always run the risk that coworkers will misunderstand your record-keeping system. Likewise, if you manage multiple warehouses, you will need an integrated and automated inventory management system to meet your inventory tracking needs. However, with the right inventory management processes and tracking software, many of these challenges can be mitigated.
Inventory Tracking Process
The inventory tracking process at a warehouse begins when the warehouse receives a new shipment of raw materials, partially assembled product components, or finished products ready for retail sale. The warehouse employees scan the SKU on each item or container or record its identifying data manually. They then follow the instructions, which were set by a manager or by data analytics, about where in the warehouse to store each item. As orders come in, visibility inventory management software the warehouse employees fulfill the order according to the warehouse’s system, whether it is first in first out, last in first out, or some other system.
How to Streamline your Inventory Tracking Process
Automation and data analytics are the keys to success to optimizing the inventory tracking process. By reducing manual interventions, businesses can minimize errors and enhance efficiency. Training staff on the software’s functionalities is also crucial to ensure smooth operations.
Manual vs. Automated Tracking
While manual tracking might suffice for smaller businesses, automation is becoming the industry norm. Automated warehouse management systems offer real-time updates, reduce errors, and are more scalable, making them ideal for growing businesses.
Inventory Tracking Methods
Choosing the best two inventory management methods for your company is an important business decision. Without accurate inventory tracking, errors in order fulfillment can lead to mixups, delays, customer complaints, and financial losses. The best inventory tracking methods rely on automation to update their reorder formulas in real-time. They are the inventory tracking equivalent of navigation apps that know when traffic jams and bad weather are likely to affect your commute and therefore suggest alternate routes.
Inventory Tracking Examples
Analyzing past inventory tracking strategies can offer valuable insights for future planning. By understanding the journey of different products through the supply chain, businesses can also identify trends and areas of improvement and optimize their strategies.
- Inventory tracking is essential for businesses of all sizes.
- The choice of tracking method should align with the business’s size and needs.
- Automation is becoming the industry standard, offering real-time updates and enhanced efficiency.
Inventory Tracking FAQs
What Are the Types of Inventory Tracking?
There are several methods, ranging from manual tracking with pen and paper, spreadsheets, to advanced automated systems using inventory tracking software.
What Is the Easiest Way to Keep Track of Inventory?
For small businesses, manual methods might be sufficient. However, as the business grows, investing in an automated system becomes crucial.
What Is the Best Program to Keep Track of Inventory?
While there are several options available, ShipHero stands out as a comprehensive solution catering to diverse business needs.