FAQs
Lack of proper management is the term used when a business organization is unable to effectively manage its inventory. This can cause issues such as stock out, excess stock, lost product or wrong records being kept. Tasks like such lead to increased expenses, lost sales, and customer complaints. Some of the reasons include old outdated methods, inadequate system, or lack of proper training.
To help in tracking of inventory, the businesses should incorporate the use of inventory tracking software and hardware, undertake periodic physical stock count and adopt new tracking technologies like use of barcodes or RFID. Pertaining to inventory management, proper classification of inventory and ensuring that specific points are drawn on when reordering can also go a long way in ensuring that stock issues, gaps and discrepancies are well controlled.
There are the periodic systems of tracking inventory; these are methods that track inventory at set intervals; and the perpetual systems where inventory is updated as soon as they are bought or sold. Other methods include; bar code or RFID for auto tracking, batch tracking for expiry date management, and JIT systems which concern themselves with acquisition of stock only when required to cut on holding costs.
Some important characteristics of selecting the right inventory management software include the business requirements, ease of use and the inventory management software’s compatibility for expansion. It is, therefore, necessary that it interface with other systems such as accounting or ERP as well as be real-time. Other important factors that go into the integration decision include cost and competitiveness, customer support, and simplicity in training to realize the most from the software.