When running a business that sells goods, especially an e-commerce business, it is essential to have a solid understanding of your inventory. Having a firm grasp of your company’s inventory can lead to lower costs of goods sold and higher customer satisfaction rates.
Most seasoned entrepreneurs can attest to the importance of finding the right inventory management system for your company. Here are four of the most common and efficient types of inventory control systems.
1. Barcode Based Inventory Control
Barcode technology-based inventory management is perhaps the most popular amongst warehouses. With barcodes, inventory is updated automatically as an employee scans each product. Barcode inventory control has numerous advantages.
The most notable advantage is that it eliminates errors commonly found in manual inventory systems. Scanning barcodes also allows real-time updates for inventory control. Barcodes can also assist owners in better understanding what minimum reorder quantities should be.
2. Radio Frequency Identification Inventory Systems
Radio Frequency Identification (RFID) inventory systems are similar to barcode inventory systems. However, instead of scanning a barcode tag readers “read” the RFID tag to track inventory movements throughout the warehouse. This method is especially popular for companies where inventory theft and safety have been an issue in the past.
Of course, as with all inventory control systems RFID too has its own drawbacks. The most significant drawback to this control system is the high cost of RFID tags and readers as opposed to the cost of barcodes and scanners.
3. Periodic Inventory Control Systems
A periodic inventory control system functions just as it sounds, it gives entrepreneurs a periodic update of inventory over a set amount of time. This type of management gives owners a beginning and ending inventory count over a set amount of time. This process is often done manually by workers. While it has a lower cost of implementation than other methods, manual counting can suspend worker productivity and lead to higher amounts of errors.
4. Perpetual Inventory Control Systems
A perpetual inventory system is often considered the fastest and most accident form of inventory control. This type of inventory system updates data in real-time as stock is sold, received, or moved from one location to another. Companies that offer accurate and reliable systems such as Lightspeed’s inventory management system software can allow owners to have a firm grasp over inventory at any given time. However, it is important to note that these types of management systems often have a higher cost of implementation than other systems.
As shown, there are a number of ways to track inventory for your company. Whether you are a small company and opt for manual tracking or have multiple warehouses that necessitate a streamlined inventory control process, understanding your stock is crucial to success.
There are other factors to consider that may include the cost of implementation for your inventory control system. No matter which of the four methods you choose, it is important to use a reliable means of management.