Inventory Tracking: Top Tips to Track Inventory

Overall, inventory tracking is crucial for e-commerce businesses to maintain efficient operations, optimize inventory levels, and provide excellent customer service. It empowers businesses to make informed decisions, reduce operational costs, and remain competitive in the rapidly evolving e-commerce landscape. Damaged goods are another category that your inventory tracking method should account for. Any products inventory tracking methods 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. If you effectively manage your inventory, you create a more efficient supply chain that helps you better meet demand, reduce inventory costs and improve overall customer service.

Pick the right tools

Doing so enhances the accuracy of forecasts and offers a more accurate reporting structure. Businesses are equipped with data and can make informed, data-driven decisions. As mentioned earlier, using an Excel spreadsheet may result in flaws and errors. To make this more realistic, you must use automated methods like inventory tracking software.

Inventory management system

Cross-docking is the act of receiving inventory from suppliers and then immediately shipping those products to customers without spending time in a warehouse. This technique can reduce handling and holding costs while improving fulfillment times, and is most commonly used for perishable products. However, it requires a lot of coordination with your suppliers and isn’t a good fit for companies selling non-perishable products or products with low turnover.

Country/region

• Periodically assess and adjust your inventory policies, such as reorder points, safety stock levels, and lead times, based on changing market conditions and business needs.
• As it implies, inventory tracking is tracking and maintaining inventory levels to help businesses handle customer requests while reducing costs.
• And by analyzing this tracking data, you’ll have the ability to schedule sales orders for raw materials, thus eliminating stockout situations and excess inventory.
• Inventory tracking gives you better visibility of your products, helps you forecast your future demand, and can even help you weed out errors before they become potentially bigger issues.
• They have standard solutions that can fit the needs of most eCommerce businesses or can partner to provide customized solutions.

Consistently monitoring inventory location helps businesses wisely use and allocate their current inventory without feeling the need to procure new items. One of the biggest challenges that come with inventory tracking is the amount of inventory you have. As your business https://www.bookstime.com/ grows, so does your warehouse, and your inventory management must become more and more comprehensive to be able to keep track of everything. Knowing how many SKUs you have in your warehouse is essential to avoiding out of stocks and backorders for customers.

By closely observing their inventory, businesses gain real-time visibility into stock levels, sales trends, and customer preferences. An inventory management system automates and streamlines inventory tracking, provides real-time data, reduces errors, offers visibility across multiple locations, and helps in demand forecasting and planning. Accurate inventory tracking provides valuable insights through reports and analytics. These data-driven insights can inform purchasing decisions, identify trends, and optimize inventory management strategies. With historical data and trends, inventory tracking allows you to better anticipate seasonal demand spikes.

Manual Tracking

• The goal of this method is to keep as little inventory on hand as possible and still meet a high production volume level for the product’s demand.
• This can also raise red flags regarding a company’s ability to stay competitive and make products that appeal to consumers going forward.
• If possible, conduct a trial of the selected inventory tracking method on a smaller scale to assess its effectiveness before implementing it across your entire eCommerce business.
• Things move fast in a warehouse, and it’s important that you can move with it and get accurate inventory counts no matter where you are.
• By consolidating inventory data from multiple warehouses, distribution centers, and sales channels into a centralized system, a 3PL provider can offer businesses a comprehensive view of their inventory.
• An RFID reader activates the chip and reads the data without requiring direct contact or line of sight.

While there are several different approaches to inventory tracking, most companies rely on one of three methods. Knack offers a variety of pre-built modules and real-time tracking features designed to simplify your inventory processes. Cloud-based systems ensure that inventory data is up-to-date and accessible anywhere, providing unparalleled flexibility and efficiency. Whether you stock goods yourself, use a fulfillment partner or focus on dropship vendors, keeping close tabs on inventory data is vital to inventory management.

• This approach requires a massive amount of data tracking, so it is only usable for very high-cost, unique items, such as automobiles or works of art.
• Inventory tracking system offers a myriad of methods to streamline inventory tracking by pinpointing areas of potential improvement.
• Accurate inventory records provide for efficient operations and allow accountants to correctly value a company’s inventory property.
• Inventory tracking also helps you to prepare business financial statements, calculate your inventory turnover, and manage customer returns and damaged goods.

The best inventory management system is perpetual rather than periodic—meaning that you always know how much stock you have at any given moment. With these systems, you should still audit your count regularly—monthly if your inventory turnover is high, or quarterly if your sales cycle is slower. Additionally, when you have a high SKU count, or sell a wide variety of items, inventory tracking is much more complex and carrying costs more expensive. The simple reason is you need a designated spot, both physically and virtually, for each unique product. An inventory tracking system is the tool or process a company uses to track inventory items as they move through their lifecycle from purchasing through to production, stock control, and sales.

Evaluating effective software solutions for your business

It assumes that there is a trade-off between inventory holding costs and inventory setup costs, and total inventory costs are minimized when both setup costs and holding costs are minimized. In retail, manufacturing, food services, and other inventory-intensive sectors, a company’s inputs (such as raw materials) and finished products are the core of its business. A shortage of inventory when and where it’s needed can be extremely detrimental. Managing inventory remains challenging in large businesses with multiple stock-keeping units and warehouses. Using a pen-and-paper or Excel spreadsheet to maintain a large business inventory may be impossible. Read up to learn about the ins and outs of inventory tracking and how to optimize it to make your daily operations as smooth and streamlined as possible.