An Inventory Control System
An Inventory Control System
- An inventory control system is a technology solution that manages and tracks a company’s goods through the supply chain.
- It integrates and manages purchasing, shipping, receiving, warehousing, and returns into a single system.
- The objective of an inventory control system is to ensure the constant availability of products, by defining:
- When products should be ordered.
- What quantities of products should be ordered?
- How to maintain adequate quantities to meet demand, while avoiding overstocks and stock outs
Types of Inventory Control Systems
- Perpetual inventory system.
- A perpetual inventory control system tracks inventory in real-time. As soon as a product is sold, its barcode is scanned and it is removed from a global inventory database. When one is received, it is scanned and added to the inventory database.
- Each part of the system has access to the same database and information.
- A perpetual inventory provides a highly detailed view of inventory changes and an accurate accounting of inventory levels without the need for manual inventory counts.
- Periodic inventory system.
- A periodic inventory system is kept up to date by a physical count of goods on hand at specific intervals.
- With a periodic inventory system, a business will not know how many products it has until after the physical count is completed.
- Counting stock manually is a process that takes a lot of time and manpower. Each and every item in stock has to be counted.
- A periodic system is only acceptable for smaller warehouses with minimal amounts of inventory.
Barcode Inventory Systems
- Inventory management systems using barcode technology are more accurate and efficient than those using manual processes.
- Barcode systems update inventory levels automatically when workers scan them with a barcode scanner or mobile device.
- The benefits of using barcoding include:
- Accurate records of all inventory transactions
- Eliminating time-consuming data errors that occur frequently with manual or paper systems
- Eliminating manual data entry mistakes
- Ease and speed of scanning.
The benefits of using barcoding include:
- Updates on-hand inventory automatically
- Record transaction histories and easily determine minimum levels and reorder quantities
- Streamline documentation and reporting
- Rapid return on investment (ROI)
- Facilitate the movement of inventory within warehouses and between multiple locations and from receiving to picking, packing, and shipping
Radio Frequency Identification (RFID) Inventory Systems
- Radio frequency identification (RFID) inventory systems use active and passive technology to manage inventory movements.
- Active RFID technology uses fixed tag readers throughout the warehouse; RFID tags pass the reader, and the movement is recorded in the inventory management software.
- Passive RFID technology, requires the use of handheld readers to monitor inventory movement. When a tag is read, the data is recorded by the inventory management software.
- RFID technology has a reading range of approximately 40 feet with passive technology and 300 feet with active technology.