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 quantities in each of your warehouse locations. This requires a streamlined and efficient inventory 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 where you document the location and movement of each item in stock in your part of the supply chain. The smallest businesses and startups can handle inventory tracking with pen and paper or with spreadsheets. Conversely, a large company that manages inventory across multiple warehouses will need more complex solutions, such as an inventory management system that includes inventory tracking software. Whether you use a card system or use mobile devices to track the movement of goods in real-time, it is much easier to keep track of all the details if you enlist the help of software to keep track of inventory and supply chain information.
What is Being Tracked?
You can use inventory tracking software to monitor the location of whichever kinds of products pass through your warehouses. Inventory tracking is for raw materials, items in the process of production, and finished products that are ready to ship to customers. Inventory tracking helps you with sales forecasting because you can see all the items moving into, within, and out of your warehouses.
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 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 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
Inventory tracking can help businesses of all sizes and in a variety of sectors reduce their costs and increase their performance. The most comprehensive inventory management systems can also help with accounting. The more automated your inventory tracking system is, the more it saves you on labor costs, and the more it reduces the risk of work injuries since workers will have to spend less time getting up close and personal with heavy containers and equipment.
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.
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, 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
The best way to streamline your inventory tracking process is through automation and data analytics. If you do this, you lessen the risk of human error while making the inventory tracking process faster and less costly. The best way to eliminate errors in inventory tracking, even when you are using inventory tracking software, is to ensure that all of the warehouse employees who are using the inventory tracking system understand how to use the functions of the software that relate to their roles in the supply chain.
Manual vs. Automated Tracking
Automated inventory tracking is quickly becoming the industry standard, but it is not the best option for every business. If you operate a small business or a startup where the members of the inventory management team work well together, manual tracking might be a more practical option for your company. The worst-case scenario is when your company has outgrown its manual inventory tracking system but stubbornly refuses to incorporate automated tracking methods in its inventory control system.
Inventory Tracking Methods
Choosing the best inventory 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
Studying inventory tracking examples from your company’s own history or from companies that fulfill a similar market niche to yours is an excellent way to improve your inventory management strategy. Every type of product follows a slightly different path from the supplier to your warehouse and then to the consumer. Look at different inventory tracking models to see which one best suits the new product that you want to add to your product line.
Every business that stores and ships products needs an inventory tracking system. You should choose an inventory tracking system that is appropriate for your product line, your position in the supply chain, and the size of your company. Manual inventory tracking is manageable for small businesses, but you need sophisticated inventory tracking software to manage inventory at scale.
Inventory Tracking FAQs
Implementing a new inventory tracking system requires you to make important decisions based on accurate and comprehensive data about your inventory and your inventory management needs. These are some common questions that can help you choose the best inventory-tracking software for your company.
What Are the Types of Inventory Tracking?
The main types of inventory tracking are manual tracking with pen and paper, manual tracking with a computer spreadsheet, and automated tracking using inventory tracking software. Some businesses use a combination of these methods. Likewise, some inventory management systems offer a variety of software packages from which to choose.
What Is the Easiest Way to Keep Track of Inventory?
For a very small retail business that stores all of its inventory on-site, the most manageable way to manage your inventory is manual tracking with pen and paper or a computer spreadsheet. Bigger businesses, especially those that keep their stock in multiple warehouses, require inventory management software.
What Is the Best Program to Keep Track of Inventory?
ShipHero is the best inventory tracking system for businesses of many different sizes. It offers a variety of applications to assist with inventory tracking and other warehouse management needs.