There are many ways to track shipments and inventory, so we will help guide you.
When looking into your options, it's important to keep these items in mind: 1) ease of use across multiple people 2) total cost of ownership 3) integrations into existing systems.
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About Inventory Tracking
Most large companies have entire departments designated to monitor and track inventory. Additionally, smaller companies typically devote a lot of time to the process of tracking inventory. The reason inventory tracking receives so much attention from companies of all sizes can be summed up in one word: money. Companies spend an enormous amount of money on inventory and most want to know exactly where that inventory resides at any given time.
Manual vs. Automated Tracking
Inventory tracking consists of the systems and policies designed to monitor the movement of inventory. Many years ago, companies tracked inventory manually with a system known as the card system or cardex. Every time inventory was purchased or sold, the quantity was manually written on that item’s card and a new on-hand amount totaled.
Today, some companies still use a type of manual entry system to record inventory transactions, except the entries get recorded in a spreadsheet program rather than on a paper card. Technology has made vast improvements in the way inventory gets tracked. Many companies have a completely automated inventory tracking workflow. Whenever a movement of inventory occurs, the inventory management system receives an automatic update of the transaction. This eliminates a lot of the human error caused by manually tracking inventory.
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Companies that own inventory typically have invested a large amount of cash to purchase the inventory. Inventory tracking monitors where a company’s inventory resides in the supply chain.
Inventory tracking also provides a company with data on how much inventory it owns, where its inventories exist, the status of its inventories (damaged, returned, rejected, on hold) and it helps deter theft and loss. Inventory tracking also becomes part of a company’s complete inventory management program. Inventory management forms the guidelines under which inventory gets purchased, used, moved, sold and destroyed.
Tracking Methods
Various tracking methods exist to track inventory. The barcode, also known as the universal product code (UPC), remains one of the most common inventory tracking methods. The majority of grocery stores and retailers use the barcode found on products to scan the items at the point of sale terminal.
Barcodes track the movement of inventory throughout the supply chain. The barcode contains data on the item’s description, the item’s price and the item’s unit of measure.
Radio frequency identification (RFID) is another method used to track inventory. RFID technology comes in two forms: active RFID and passive RFID. Active RFID works best in environments where security issues exist and ones that require real-time tracking information. Passive RFID works best when used with handheld scanners and where security issues do not exist.
Tracking inventory from your supplier
Not all of your products will be at your warehouse (or in your home or office). A good amount may be stored with your supplier or even en route to you or your fulfillment warehouse or distribution center.
With such a large investment required for each purchase order and often long transit times once it leaves the supplier, it’s critical to know how much inventory is with your supplier and when exactly it will arrive in your ecommerce warehouse.
Failing to differentiate between products stored with you and those in the supplier’s hands could lead to late deliveries, missed sales, and poor inventory accounting.
Tracking returns from customers
Just because a product leaves the warehouse, there’s no guarantee that it’s gone for good. Ecommerce returns are unavoidable in the world of online shopping. As such, it’s crucial that you account for any returned products, whether they’re immediately put back into your warehouse or sent elsewhere for examination.
Tracking damaged goods
Damaged goods are another category that your inventory tracking method should account for. Any products that are damaged and unable to be sold should be reflected in your inventory levels data. If you don’t deduct damaged goods, you may end up thinking that you’re fully stocked, when in reality those items are not fit for sale.
Stop Using Spreadsheets
- Inability to efficiently track large quantities of inventory: When using a spreadsheet, workers can spend hours to track down a single item or to manually key in inventory data. When using an inventory management system, these things are just a scan away.
- Lack of real-time data: Bryan Harej, Inventory Analyst at TopGolf, previously used manual spreadsheets to manage a large inventory at multiple sites. He said they never truly had a handle on inventory, and trying to run at full capacity was nothing less than stressful. After adding dedicated Inventory Control software, Harej shared, “I was immediately able to see reports to determine the usage at each site. From there I can see what we have in stock and what we need to order. I no longer have to guess inventory usage and spend hours a day updating spreadsheets.”
- Limited historical data analysis: Forecasting inventory is an integral part of business, preventing you from purchasing too much or too little during a given season. Restricted accessibility to this information can tie up money with excess inventory or lose sales when items aren’t available. Customer demand is always met when you have this valuable data at your fingertips.
sources: shipbob.com, smallbusiness.com