Inventory tracking is one of the best decisions a company can make. If properly conducted, inventory tracking can increase effectiveness, boost efficiency, and help employees become more accountable and engaged.
Learning about inventory tracking applies to decision makers, managers, front line workers, and stakeholders.
This post will share a great deal of valuable information, including:
- What inventory tracking is and what it includes
- The difference between asset tracking and inventory tracking
- Why inventory tracking matters
- The difference between manual and automated inventory tracking
- Inventory tracking tips and best practices
- How is inventory tracking evolving
There are many benefits of having an insight into how inventory tracking works.
What is Inventory Tracking? What Does It Include?
Inventory tracking is the process of following the movement of assets. Usually, this takes place in real time.
The data provided by inventory tracking helps:
- increase the speed of supply chain decisions
- locate misplaced items
- examine profitability gaps
- protect valuable assets
A full inventory system, which includes inventory tracking, consists of a number of important aspects. They include inventory control, item-by-item tracking, as well as the software to follow the assets and compile the data.
This involves the physical tags placed on the items, the manner in which the items are tracked, and the ways of understanding and disseminating the information.
There are several differences between inventory tracking and inventory traceability.
While inventory tracking involves a whole system, inventory traceability is much more specific to operator performance.
Inventory traceability pinpoints which employee is connected to which item.
This information can develop metrics about performance and best practices.
Inventory traceability provides many small data points about matters such as how long a single item is checked out, enabling you to locate each item in real time, as well as review the productivity of a session. This data is processed through the inventory system in ways best leveraged for the company.
The Difference Between Asset Tracking and Inventory Tracking
While asset tracking and inventory tracking are similar, you need to understand some important differences between them.
The term “assets” can refer to fixed assets or movable assets. Fixed assets stay in place. These include large mechanical items such as escalators, sewage plants, or museum items.
Movable assets, on the other hand, include items like office furniture. Those can be transferred easily, either around the globe or to the office next door.
Both fixed and movable assets benefit from asset tracking.
Aside from the GPS location, asset tracking can involve such data as
- time of checkout
- information about asset’s condition
- who last used the item
- alerts about preventive maintenance
Inventory tracking, on the other hand, involves consumable items, like treadmills, bathing suits, or books. These are the items the company owns, but intends to eventually move to clients, in one way or another.
When a company participates in inventory tracking, every item is equipped with a scannable code called a stock keeping unit (SKU).
This code is sometimes directly printed on the item, while other times it is included on a label that is affixed to the item itself. The SKU, when scanned, keeps a real-time record for inventory levels at each location along the supply chain.
Decisions about which to use depend on the company and what it does.
For example, a one-person programming business will probably have little need for asset tracking. Inventory tracking, on the other hand, will likely prove useful to a furniture store. Some, like a coffee shop, might use both.
Why Inventory Tracking Matters
Inventory tracking matters because it helps employees and decision makers keep track of each item’s location along the supply chain.
This is useful not only for customer service specialists trying to assuage a purchaser wondering where his or her just-shipped travel mug is.
It increases efficiency in a number of ways:
- More sales: Inventory tracking helps avoid running out of an item and allows comparison and contrast with other items
- Increased customer satisfaction: The ability to provide tracking information, alert consumers to regional events, and confirm shipping estimates contributes to increased customer interaction, ratings, and trust
- Better accuracy: Automatic tracking helps to avoid human error
- Avoiding shrinkage: Inventory tracking deters theft and increases employee accountability
- Smarter investing: Understanding the market and direction of your sales lead to better long time decisions
- Faster inventory: The process of taking stock and confirming data is much more efficient with inventory tracking
- The ability to predict areas of concern: Inventory tracking alerts managers and other decision makers to potential issues, for instance in transportation, ors overstocks, and repeated errors from a certain employee or area.
- More efficient warehousing: The ability to make micro-decisions about stock levels and area processing can help reduce overheads
Organizations that use inventory tracking find different ways to apply the information. No matter the nature of the business, the data can be highly useful.
Manual vs. Automated Inventory Tracking
Companies have a choice between manual and automated inventory tracking. Businesses have kept records through manual inventory tracking for millennia. It involves using a handwritten journaling system or manual data entry system to keep track of inventory.
While it is possible to keep accurate records in this way, it is typically less accurate, less secure, and far slower.
Automated inventory tracking, on the other hand, involves the computerized update of the same information and holds many benefits over manual tracking:
- Automated inventory tracking is faster
- It is more reliable; items are not “lost”
- Tracking is far more accurate
- It is safely backed in a digital manner, eliminating the need for physical protection or additional copies
- Information can be provided instantaneously
- Access is provided regardless of physical location
- Updates are automatic and perpetual
- Password protection and encryption make it far more secure than more traditional methods
- Shipping and receiving are proven and verified
- Inventory management is more precise
- Data is provided in real time
Manual tracking involves dependence upon the attention, accuracy, and commitment of others. When an organization uses automated inventory tracking instead, transparency increases, efficiency improves, while decisions are made in a more informed manner.
Inventory Tracking Tips and Best Practices
It’s not enough to simply install a tracking system with dependable software. The implementation of it is just as important as the decision to begin inventory tracking in the first place.
Here are some best practices to help you make the most of your system.
Don’t Use Spreadsheets
Spreadsheets were once the cutting edge of technology where inventory tracking was concerned. However, the advent of smartphones and digital technology with increased data storage, this is no longer the case. Using a spreadsheet in isolation is outdated.
Relying on spreadsheets alone does not allow real-time tracking. It is difficult to ensure that large amounts of inventory in different categories are accurately counted.
Scanning is far more geo-precise and efficient. If properly applied, it can provide large-scale historical data analysis, increase customer and employee engagement, and exert control over inventory.
The use of spreadsheets might seem attractive because it does not require a great deal of initial spending. The tools for it are sometimes even provided for free or included with workplace software.
However, when a business avoids making the leap to a full inventory tracking system when such a move is called for, its potential becomes limited.Investing in an inventory tracking system can quickly pay for itself.
This is especially the case when a company deals in large amounts of inventory across several different categories.
The more items in the inventory, the greater the likelihood that errors will take place as the spreadsheet is updated and researched. Validating this information can take even longer, resulting in further errors and more wasted time.
Use Inventory Apps
Intuitive apps, when suitably applied, can be game-changing for inventory tracking.
Here are some of the advantages of using smartphone or tablet apps compared to manual accounting or other forms of technology:
- The app updates automatically as software improves, eliminating the need for expensive hardware replacement
- Inventory apps save time; little training is necessary, while setup is fast, easy, and trackable
- Productivity increases because employees can scan and update on the go
- Accuracy improves, since employees can verify the information instantaneously
- Storage in the cloud eliminates the need for expensive record keeping, duplication, and upkeep
- Using password protection and two-entry authentication enhances security
- An organization concerned with paper and plastic usage can quickly cut down on using these resources
- Setup is easy and fast for a workforce accustomed to app usage
Inventory apps provide not only real-time data about assets or inventory, but also information on who is using it. The scanning data can be tied to individual users, locations, and geographic areas.
This is extremely useful when it comes to employee verification, timesheet tracking, and proof of regulation compliance.
Understand Different Tagging Systems
Having a strong grasp on different types of tagging systems and procedures will help you to make the best decisions about asset tracking for your company.
Here is a brief overview of some available tagging systems.
Every asset receives its own physical price tag, which is manually removed and collected for use as proof of purchase. Later, the price tags are entered into a database. This process is labor-intensive and does not provide real-time benefits.
POS stands for point of sale. Items are scanned at checkout, which updates the inventory database automatically. Sales are automatically recorded, while inventory information is updated.
This is the most time-tested method. It involves the use of barcodes which are either printed directly on the item or affixed with a tag. They can be used in conjunction with a POS scanning system. Barcodes do not allow unique identifiers and require the use of additional hardware in the form of system-specific scanners.
Radio waves are used to communicate between a reading device and a Radio Frequency Identification tag. These allow scanning without being in close physical proximity to an item. This method can allow rapid scanning of several items at once, as in a shipping container.
SKU and UPC
Stock Keeping Units (SKU) provide unique inventory codes that are created by the organization. UPC, on the other hand, involves the use of a Universal Product Code which consists of twelve digits and is the same across all industries and outlets.
A careful look at how your company operates and what its goals are will guide you in deciding between tagging systems.
Enable Lifecycle Management
Inventory tracking embraces lifecycle management, which involves realistic predictions regarding an asset’s depreciation and eventual disposal.
With the real-time information which inventory tracking provides, stakeholders can make informed decisions about the best time and ways to dispose of an asset.
These might include resale, donation, or recycling.
Read more about lifecycle management here: Asset Life Cycle: Definition and Key Stages.
How Inventory Tracking Is Evolving
It’s safe to say that inventory tracking isn’t nearly done evolving. While spreadsheets were once the last word in inventory management, the future of the industry is exciting and changing ever more rapidly.
The ability to search and connect instantaneously to compare prices and advantages are now consumer expectations, not merely an appreciated benefit of digital technology. Keeping pace is a must.
Some technologies that are bound to play a part include: :
- Predictive technology
- Embedded intelligence
- Advanced 3D printing capabilities
Perhaps future inventory tracking will allow companies to pivot with restocking in real time, focus more closely on niches, and provide more support for hyper-local retail opportunities such as pop-up stores and integration with GPS technology.
Inventory Tracking and Your Organization
Advances in inventory tracking technology mean that moving to an automated system has become more cost-effective and flexible than ever before.
Leveraging the information that such a system provides not only gives businesses more inventory control, it also helps with employee data, geographical shifts, seasonal updates, and fast customer response.
All of these can quickly contribute to increased sales, a larger market footprint, and increased connectivity. Moreover, tracking inventory automatically provides the basis for growth in a number of ways.
Therefore, choosing a tracking system that suits your needs represents an investment that quickly pays off.
GoCodes Can Help
We use QR code tags with a unique visual code that you can scan with your smartphone. When scanned, GoCodes tags provide GPS information about equipment location and more, making asset tracking easy. Sign up for a free trial here.