7 Benefits of Using an Inventory Tracking System for Your Business

Inventory tracking is the process of monitoring the movement and storage of raw materials or finished goods in a supply chain. It helps businesses optimize their inventory levels, reduce costs, improve customer service, and increase profits.

Key Takeaways

Inventory tracking is the process of monitoring the movement and storage of raw materials or finished goods in a supply chain.

An inventory tracking system is a software application that automates the inventory tracking process and provides real-time data and insights on inventory performance.

An inventory tracking system can help businesses reduce inventory costs, improve inventory accuracy, enhance customer satisfaction, increase operational efficiency, support business growth, gain competitive advantage, and comply with regulations.

An inventory tracking system is a software application that automates the inventory tracking process and provides real-time data and insights on inventory performance. An inventory tracking system can help businesses achieve the following benefits:

1. Reduce inventory costs:

An inventory tracking system can help businesses avoid overstocking or understocking, which can lead to wasted space, spoilage, obsolescence, or lost sales. By using data-driven forecasting and replenishment methods, an inventory tracking system can help businesses maintain optimal inventory levels and minimize carrying costs.

2. Improve inventory accuracy:

An inventory tracking system can help businesses eliminate human errors and discrepancies in inventory records, which can cause stockouts, misplacements, or shrinkage. By using barcode scanners, RFID tags, or other identification technologies, an inventory tracking system can help businesses track inventory movements and locations with precision and speed.

3. Enhance customer satisfaction:

An inventory tracking system can help businesses deliver faster and more reliable service to their customers, which can increase customer loyalty and retention. By having real-time visibility into inventory availability and status, an inventory tracking system can help businesses fulfill orders on time, avoid backorders, and handle returns and exchanges efficiently.

4. Increase operational efficiency:

An inventory tracking system can help businesses streamline their inventory processes and workflows, which can save time and resources. By automating tasks such as data entry, counting, ordering, receiving, picking, packing, and shipping, an inventory tracking system can help businesses reduce labor costs, errors, and delays.

5. Support business growth:

An inventory tracking system can help businesses scale up their operations and expand their markets without compromising their inventory performance. By integrating with other software systems such as accounting, e-commerce, point of sale, or warehouse management, an inventory tracking system can help businesses manage multiple channels, locations, and currencies seamlessly.

6. Gain competitive advantage:

An inventory tracking system can help businesses gain insights into their inventory performance and trends, which can help them make informed decisions and improve their strategies. By using analytics and reporting features, an inventory tracking system can help businesses identify best-selling products, optimal reorder points, seasonal demand patterns, and potential issues or opportunities.

7. Comply with regulations:

An inventory tracking system can help businesses comply with various industry standards and government regulations regarding inventory management. By providing accurate and traceable inventory records, an inventory tracking system can help businesses meet quality control, safety, environmental, or tax requirements.

Tips

Choose an inventory tracking method that matches your inventory type and turnover rate such as periodic, perpetual, or just-in-time.

Use a cloud-based inventory tracking system that offers more flexibility, security, and scalability than a locally installed one.

Optimize your inventory layout and organization to facilitate faster and easier scanning and picking of inventory items.

Use inventory labels and tags that are durable, visible, and readable by both humans and machines.

Conduct regular inventory audits and reconciliations to verify the accuracy of your inventory records and correct any discrepancies.

Inventory Tracking System: A Growing Global Demand

Inventory tracking system is a software solution that helps businesses monitor and manage their inventory levels, locations, and movements. It can also provide insights into inventory performance, such as turnover rate, stock availability, and demand forecasting. Inventory tracking system is a vital component of supply chain management, as it can improve operational efficiency, customer satisfaction, and profitability.

Market Growth and Drivers

According to a report by Grand View Research, the global supply chain market is set to experience a compound annual growth rate of 11% until 2027, reaching a value of USD 37.41 billion. One of the key drivers of this growth is the increasing demand for inventory tracking system, especially in the e-commerce, retail, and manufacturing sectors. These industries face challenges such as high inventory costs, complex distribution networks, and dynamic customer preferences. Inventory tracking system can help them optimize their inventory levels, reduce waste and shrinkage, and enhance customer service.

The global logistics automation market, which includes inventory tracking system, has the highest CAGR of any supply chain market, at a predicted rate of 12.4%. The market size of the global logistics automation sector is growing rapidly. From 50.9 billion USD in 2020, it is now estimated to reach a staggering 82.3 billion USD in 2026. The adoption of advanced technologies such as RFID, barcode scanning, and cloud computing is boosting the demand for inventory tracking system. These technologies enable real-time inventory visibility, accuracy, and control.

Market Challenges and Opportunities

However, not all businesses are leveraging the benefits of inventory tracking system. According to a survey by Wasp Barcode Technologies, 46% of small-to-medium businesses don’t track inventory or use a manual method instead. Only 18% of SMBs utilize inventory management systems. This indicates a huge potential for growth in the inventory tracking system market, as more SMBs realize the need to automate and streamline their inventory processes.

Inventory tracking system is not only a necessity but also a competitive advantage for businesses in the modern economy. By implementing an effective inventory tracking system, businesses can improve their stock availability, which is a key factor in customer satisfaction and loyalty. According to NetSuite, stock availability is the percentage of orders that can be fulfilled from existing inventory without backorders or lost sales. A good inventory management system provides centralized, real-time information about stock levels and status, plus analytics, to help businesses determine the right amount of inventory based on past and predicted supply chain trends and purchasing behavior.

In conclusion, inventory tracking system is a growing global demand that can help businesses optimize their inventory operations and performance. By using inventory tracking system, businesses can reduce costs, increase efficiency, and enhance customer service. Inventory tracking system is an essential tool for supply chain management in the digital age.

Frequently Asked Questions

Q: What is the difference between inventory tracking and inventory management?
A: Inventory tracking is a part of inventory management that focuses on monitoring the movement and storage of inventory items in a supply chain. Inventory management is a broader term that encompasses all the activities involved in planning, controlling, and optimizing inventory levels.

Q: What are some common features of an inventory tracking system?
A: Some common features of an inventory tracking system are:

Inventory database: A central repository that stores information about all the inventory items in a supply chain.

Inventory identification: A method that assigns unique identifiers to each inventory item such as barcodes or RFID tags.

Inventory scanning: A device that reads the identifiers of the inventory items such as barcode scanners or RFID readers.

Inventory synchronization: A process that updates the inventory database with the latest information from the scanning devices.

Inventory reporting: A function that generates reports on various aspects of the inventory performance such as availability, turnover rate, fill rate, or stockout rate.

Q: How to choose the best inventory tracking system for your business?
A: There is no one-size-fits-all solution for choosing the best inventory tracking system for your business. However, some factors to consider are:

Your business size: The number of products you sell, the volume of transactions you handle, and the number of locations you operate from.

Your business type: The industry you belong to, the nature of your products, and the complexity of your supply chain.

Your business goals: The objectives you want to achieve with your inventory tracking system such as reducing costs, improving service, or increasing sales.

Your budget: The amount of money you are willing to invest in your inventory tracking system and the return on investment you expect to get.

Q: What are some best practices for inventory tracking?
A: Some best practices for inventory tracking are:

Use a reliable and compatible inventory tracking system that suits your business needs and integrates with your other software systems.

Implement a consistent and standardized inventory tracking process that covers all the stages of your supply chain from ordering to delivery.

Train your staff on how to use the inventory tracking system and follow the inventory tracking process correctly and efficiently.

Monitor your inventory performance regularly and use the data and insights from your inventory tracking system to identify and resolve any issues or improve any opportunities.

Q: What are some challenges or risks of inventory tracking?
A: Some challenges or risks of inventory tracking are:

Technical issues: The inventory tracking system may malfunction, crash, or get hacked, resulting in data loss, corruption, or theft.

Human errors: The staff may make mistakes in entering, scanning, or updating the inventory data, resulting in inaccurate or incomplete records.

External factors: The supply chain may face disruptions due to natural disasters, pandemics, strikes, or other unforeseen events, resulting in delays, shortages, or losses.

References:

http://www.almyta.com/Inventory_Management_History_4.asp

http://www.islandnet.com/~kpolsson/comphist/comp1981.htm

http://www.inventoryops.com/economic_order_quantity.htm

https://www.usnews.com/360-reviews/business/best-inventory-management-software

https://www.forbes.com/advisor/business/software/best-inventory-management-software/

https://www.pcmag.com/picks/the-best-inventory-management-software