4 Types of Inventory Management
Are you a new business owner?
Opening a business comes with a ton of responsibility on the owner’s part. On top of all that, inventory management can be overwhelming. There are many types of inventory management software to choose from.
Knowing which one works for your business can save you time and help you become more efficient. Did you know that 60% of retail businesses have inaccurate inventory? This results in a messy operation, a waste of money and time, and more.
Deciding on your inventory management system can be tough. So, start by understanding the different types of inventory management. Read on to learn more about the different types of inventory management systems.
1. Periodic Inventory Management
Periodic inventory management is where you take a physical count of your inventory. You do this once a month, once a week, or even once a day. This gives you an accurate snapshot of what you have on hand.
There are a few reasons why you might want to use periodic inventory management. You might be trying to reduce the amount of inventory you have on hand. It also helps you get a better sense of your stock levels so you can plan your orders better.
No matter what your reasons are, periodic inventory management can be a valuable tool. It can help you keep track of your stock levels and make informed decisions about what to order and when to order it.
The problem with this system is that it’s very time-consuming. It can also be easy to miss items if they’re not counted on a regular basis.
2. Barcode Inventory System
Imagine this: you’re a small business owner, and you’ve got a whole lot of inventory to track. How are you going to keep track of it all? This is where the barcode inventory system comes in.
With this system, each item gets a barcode, which you will scan whenever you receive or sell that item. This helps you keep track of how much inventory you have on hand, and it also makes it easy to find specific items.
Barcode inventory systems are a great choice for businesses that deal with a lot of products. It is also great for businesses that need to track inventory in real-time. Thinking about using a barcode inventory system for your small business?
Choose the right inventory management software. There are plenty of different apps with unique features, so choose one that fits your needs best.
Another thing to keep in mind is if the hardware is compatible. Your barcode scanner needs to be able to read the barcodes on your products. Finally, train your staff and make sure everyone who needs to use the system understands how it works.
3. Perpetual Inventory Management
The third type of inventory management is perpetual inventory management. This is where you track your inventory using electronics. So as soon as an item sells, it’s removed from the list.
This means that as soon as you receive or sell an item, you will see it reflected in the inventory database. This is a little different from the periodic inventory system, which only updates every month or so.
The main benefit of this is that it gives you a live picture of your stock levels. It also eliminates the need for manual counting and reconciliation. The downside to this system is that it can be expensive to set up and maintain.
4. Radio Frequency Identification Systems or RFID Systems
One of the least known inventory management systems is the RFID system. RFID stands for Radio Frequency Identification Systems. most people think RFIDs are only useful for keeping track of people or cars, but you can also use them for stock.
RFID systems use radio waves to identify and track objects. You can use this to track everything from inventory to people. The RFID system has a lot of advantages over traditional barcode scanning.
For one, RFID systems are much faster than barcodes. In addition, since RFID tags are tiny, you can hide them inside your products. This makes them perfect for tracking high-value items.
They’re also more accurate than barcodes, and they can get used in a variety of environments. This includes items that go from warehouses to hospitals, retail stores, and more. So if you’re looking for a way to improve your inventory management, RFID systems are a great option.
How to Choose the Right Inventory Management System for Your Business
So which system is best for your small business? That depends on your specific needs and what you’re comfortable with. When it comes to inventory management, there are a few different systems you can choose from.
Each system has its own benefits and drawbacks. That’s why it’s essential to understand the different types and what will work. Here’s a quick breakdown of the most common systems:
1. Manual System
This is the most basic type of inventory management. It involves tracking inventory using pen and paper or a spreadsheet. This system is best for businesses that have few items and don’t need to track inventory as often as other businesses.
2. Point-of-Sale (POS) System
A POS system is a computerized system that tracks inventory and sales. This system is best if you sell physical items and need to track inventory levels in real-time.
3. Warehouse Management System (WMS)
This is a computerized system tracking inventory in a warehouse or distribution center. This system is best for businesses that have a large stock of various products.
4. Enterprise Resource Planning (ERP) System
This is a comprehensive software system that tracks all aspects of your business. It also gives you a single view of all your business data.
Learn More About the Types of Inventory Management Today
Inventory management should make your life easier, not harder. Now that you know the different types of inventory management, you can identify the best one for your business.
Do you want to learn more about a specific system? Then we have got you covered! Contact us to consult with an inventory management specialist today.