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

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.

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.

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 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.