Inventory tracking

What is inventory tracking?

Inventory tracking is a supply chain process that tracks the quantity of goods or products as they move from one stage of supply chain to another—warehousing, production, logistics, shelves, or customer destination. This could be about tracking the following, either manually with spreadsheets, or automatically with ERP systems powered by RFID systems, sensors, and AI technology.

• The available number of goods under each category, product, and range.
• Storage location of each of the above.
• How much is required right now or in the near future? Is it stocked or does it need to be re-ordered.

Why businesses do inventory tracking?

To reduce waste and capital being locked in one place: Without knowing what and how much you have, there will be less control over what’s produced. Inventory tracking regulates this, connecting multiple units—manufacturing, inventory,

Prevent lost-sales opportunities: With demand changing every minute, it can get difficult to reach the right product to the right place, without tracking inventory. This leads to a lot of missed sales, unhappy customers, and them preferring the competitor brands.

Improve forecasting and its results: With accurate and up-to-date historical data, a business could focus on creating predictive and prescriptive analytics.

Can run multi-channel campaigns with confidence: For modern businesses, it’s all about capitalizing marketing channels and opportunities available, both online & offline. With inventory tracking, they could do this with much more efficiency, prioritizing the right channels for right destinations.

Auditing becomes manageable: It could be a nightmare to manage internal/external audits. With centralized inventory data management, there will records that are consistent, accurate, and without any gaps, making audits more doable.

Enables real-time stock movement tracking: Companies could track moving goods, each in different transits accurately, avoiding any delay, mismatches, and logistics errors, which is especially needed for modern manufacturing, supply chain and logistics units who struggle with changing demands, sudden orders, and keeping up with various SKUs.

How to do inventory tracking?

There are multiple ways to do inventory tracking: manual tracking, barcode tracking, RFID, ERP tools, and inventory management systems.

Start with inventory labelling

This is all about bringing products to your digital inventory tracking system, assigning SKUs to item, defining their characteristics, unique ID and identification systems, and organizing them based on their logical storage patterns. This step also involves selecting your inventory tracking method, based on your warehouse capacity, goods handled, and business size.

Implement inventory management tools

The next step is to set up an ERP or inventory management system like Zoho inventory, NetSuite, Odoo, SAP, or anything. With the help of these tools, the inventory team can track incoming and outgoing goods automatically, set up re-order points, enable alerts, send real-time reports, and integrate with e-Commerce, POS, and ERP systems.

Tracking processes and their KPIs

An inventory management system alone can’t help with effective inventory tracking. It requires automation of steps involved in the process, without which it would be just a data entry process. For example, setting up purpose-driven processes like auto-detect items once they are fulfilled, scan, record, and update items whenever new items arrive to a storage location, goods tracking while they are in transit, and more.

Optimize inventory with regular tracking

With a few custom alerts, a company could optimize inventory better. For instance, when an item reaches its minimum safety stock level. Or, observe trends to identify slow-moving objects, especially while dealing with perishable goods.

You could also take inventory optimization to the next level with targeted reports like ABC analysis, SDE analysis (scarce, difficult, easily available), safety stock analysis, or measuring key stats like days inventory outstanding, inventory turnover ratio, etc.

Inventory tracking best practices

Some best practices that you can follow to receive best results with invertory tracking:

Centralize inventory management data

• Allow everyone to have the same, consistent view. Set up real-time tracking to an extent, that it can automatically pick up goods movement as they move across the supply chain.
• There must be no overstocking or understocking; for that to happen, set up minimum threshold level alerts.
• Make inventory tracking an everyday and every minute activity with the right tool and tech set up.
• Go beyond maintaining regular count. Enable tracking by location for a more accurate tracking.

Training the team so they could be well-adept with how inventory tracking works and what they need to do about it.

Level up your inventory tracking with AI-based demand forecasting 📈

• AI and ML, the game-changing ingredients, could improve the results of your inventory tracking & management.
• Demand forecasting is about analyzing sales data and other involving patterns, predicting future demand changes for any given product.
• By feeding this future demand data into inventory management, a company could align stocking with demand, holding exactly what the customers need from them.
• This can be achieved with the help of demand forecasting tools, custom AI/ML models, sales analysis, and more.