Inventory Management Systems – Reviewing the 3 main methodologies
There are three easy methods to inventory management – We review each
It is easy to manage your stock if you use inventory management systems. The three most common methods involve old-fashioned log books, Excel spreadsheets, and inventory management software.
All of these ways can help you track and manage your stock efficiently. But as your business expands and becomes more sophisticated, your company needs change as well. Here are the pros and cons of each type of inventory control method to help you decide which suits your business model.
Manual log book
The pen-and-paper method is the most basic approach to stock recording and monitoring. Before there were inventory apps and systems, this was the only way to do it. It doesn’t require complicated training to implement. Employees can just count the goods and record it on the books. Additionally, this approach is safe from tech risks like bugs or viruses and even power outages.
However, there are many downsides to this method. Paper logbooks can get destroyed by various elements like fire, moisture, flood, theft, and tampering. Corrections and adjustments can be difficult to reconcile since you’ll have to backtrack through pages and pages of data.
You may have to invest in a systematic filing system to store historical records of your inventory. Moreover, it is time-consuming to produce duplicates for other stakeholders. This system can be useful for a small business but is very impractical if you have tons of products on your inventory.
Excel spreadsheets are electronic versions of logbooks. You can organize and store inventory information in rows and columns. Record supplier names, client names and contact details, order and invoice numbers, etc. without a hitch.
This inventory management system allows you to compute and tabulate faster and more accurately than using manual log books. However, you have to hire someone familiar with Excel or train new users to make it work. Unlike manual log books, you don’t need plenty of space to keep old records.
This system takes a little more time to learn than manual inventory. It also requires users to know basic Excel operations. It is also prone to typographical errors and computer crashes. Files are also at risk for viruses, accidental deletion, unauthorized access, data theft, and tampering.
Inventory Management Software
Using an inventory management software is another method for stock control. It shows how much inventory you have now and it offers a way for you to communicate with your suppliers if you’re almost out of stock. You can update and monitor it with one click.
You can modify your system to show your inventory flow like FIFO (First-in, First-out) or according to manufacturing date, etc. You can get detailed reports of your chosen parameters almost real-time. You can also assign who has access to the program for added security.
Some of the shortcomings of an inventory software are the cost and the big learning curve. Not all companies would find it practical to set-up and use. However, the ones that do would find it a great investment. It streamlines stock management procedures and allows you to focus on other important aspects of the business.
To make a great investment and streamline management procedures, chat to our guru for advice.