Inventory Tracking
In this artical you will know about Inventory Tracking like Its importance, Method, and Benefits.
What is Inventory?
Inventory represents the material or goods that are a current asset on a balance sheet. Which converts into revenue with sales transactions. There are many methods for managing one's inventory. The supply chain approaches this by keeping inventory low, lean, or until demand drives supply, they do not view this as a liability.
What is Inventory Tracking?
Inventory tracking is used by a company to monitor how raw materials or finished goods move through the supply chain. Fundamental to generating revenue, the goal is to hold the right amount of stock to meet customer demand.
Why having an Inventory Tracking System is Important?
If the company is clear on its stock level and inventory account, only then it survives for a long time. The requirement for an Inventory Tracking System is critical because:
Store Inventory-Related Data Under One Interface - If you have a huge amount of inventory then you are bound to make mistakes. Hence, it is wise to incorporate technology. With data from one platform, viewing inventory levels across all your SKUs and locations becomes easy and hassle-free.
Keep accurate stock records - The inventory tracking system captures data accurately. For this reason, many companies are dependent on it. It has been reported that 46% of companies do not track their inventory or have no inventory tracking system, which inadvertently affects supply chain management. Close to 18% of SMBs make full use of the inventory management system. The stock count and stock accuracy are always maintained thanks to the Inventory Tracking System.
Provides real-time inventory level account - Inventory tracking systems keep track of all products until the last one is sold, as well as the inflow and outflow of inventory. The inventory system keeps you up to date with real-time information and inventory levels in this manner. It also keeps track of orders, sales, returns, and the minimum or lesser stock of any SKU.
Notifies when stock levels are low - If the user or shopkeeper is running low on stock, then the system informs them in advance. You can set your desired minimum threshold value (for example, Get notified when the stock reaches 15 pcs.)
Tracks stock levels across multiple warehouses and locations - Keeping track of stock in large companies is a very difficult task. With many warehouses and multiple locations, manual calculation of stock is certainly difficult, and keeping track is impossible. Inventory Tracking systems make this task easier by recording every stock of each SKU across multiple warehouses and locations.
Protects you from discrepancies in stock levels - When you count stock manually, there are bound to be some discrepancies. You may also get repetitive counts or incorrect calculations. Even though the chances of discrepancies may be low or zero in case of low inventory, for large inventory, it is wise to use a proper inventory tracking system. This avoids wrong guesses.
Inventory Tracking Methods
Methods for tracking inventory vary depending on what type of business you have, what type of products you sell and how much stock you keep. Here are some supply chain management concepts, technologies, and tools to consider.
Manual tracking - Shoppers who often track their inventory using pen and paper are not ready to invest in an inventory tracking system. With this method, you need to update a master sheet that categorizes all the inventory at regular intervals or whenever there is a transaction.
Spreadsheets - Spreadsheet organizes and categorizes large amounts of data. But entering and managing data manually is prone to mistakes and is not efficient or scalable.
Accounting Systems - Inventory Tracking Systems provide you a powerful tool for Inventory Tracking. It not only has a detailed view of your Inventory and Stocks but also of various Inventory decisions that affect your company's finances.
In-House Solution - You can plan, design and develop your on-premises Inventory Management System in this and also decide to build an organization custom Inventory Tracking Application with sufficient internal resources to develop and deploy. The advantage is that a system is designed to match specific business needs, with custom features and in-house technical support to help troubleshoot system problems.
Card system - It is a just-in-time system also known as kanban and visual sign or card method, designed to limit excess stock. Instead of trying to predict demand, Kanban is a bridge system, where cards are used to track stock, production, inventory, and signal when more is needed. This system was developed by vehicle manufacturers in Japan.
Inventory Management System - Inventory Management System tracks both stock and inventory, generates reports and forecasts demand. They also have customer support and offer training options. They are most useful when integrated with accounting and payment processing.
Software-as-a-Service (SaaS) - SaaS is an inventory system that allows easy tracking. This is especially useful for startups that aren't ready for a comprehensive enterprise inventory management solution.
Open-source software - Many people who have small businesses turn to open source software for inventory management. These platforms usually provide interfaces, basic dashboards, and some tracking features. But it often lacks many advanced features, such as integration with the rest of your system, creating what is known as a data silo. Another drawback is the lack of customer service and training.
Cloud-Based Software - Most SaaS solutions are cloud-based and mobile-friendly. They also integrate with other software. Businesses that need to scale inventory management to multiple users tracking stock in different locations benefit from the flexibility and cost-savings that cloud solutions provide.
Third-Party Providers - Outsourcing inventory management to a third-party logistics (3PL) provider frees up space, time, and resources for logistics retailers and e-commerce businesses that are 100% online. These 3PL companies receive, store, move and track inventory for their customers. With this strategy, you avoid the expense of physical warehouses and use drop shipping to manage inventory, but add to the potential problems of additional costs, loss of control, systems that don't sync, and communication issues.
Inventory Tracking Benefits
Enhanced Clarity - Inventory reports remove all error-prone guesswork in your supply chain. They provide a clear picture of important uses like Stock on Hand, Order Fulfillment Fear, and Inventory Turnover.
Cost-Efficiency Inventory tracking has an automatic feature that tells you whether you can fulfill customer orders and avoids overstock. Relying on data and demand-based replenishment—which takes into account historical sales, seasonality, and promotions—drives inventory decisions that help you manage space and reduce your costs.
Customer Satisfaction Improving fast delivery also gives you customer satisfaction, which helps in increasing more sales revenue. Inventory tracking systems give you real-time inventory status, and some systems may send automated tracking updates directly to customers.
Space Saving - You can accurately forecast inventory demand at specific points in the supply chain with the demand forecasting and planning tools in inventory tracking software, ensuring that inventory arrives on time for production but not too early. This insight into inventory cycles translates into optimized warehouse space.
Supplier Satisfaction - Companies and suppliers can share tracking data specific to their industry and use it to quickly spot trends. Depending on the setup, both organizations can also integrate the system for greater transparency and insight.
You can track your inventory with OneGST software.
Disclaimer: This article is intended for general consumption only. The information in the article was accurate at the time of publication, but it is subject to change due to changes in government rules and regulations. The contents of the blog may not be copied unless prior permission is obtained.
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