What is inventory control? Inventory control refers to the process of effectively managing consumable stock items, parts or supplies. Inventory control helps streamline stockroom, supply depot, and small warehouse operations, and it provides item-level visibility so that you know what you have, where it is, and when to order more.
Sound inventory control processes enable stockroom and supply managers to:
- Reduce time spent looking for inventory items.
- Prevent overstock and out-of-stock situations.
- Monitor item consumption.
- Increase accountability and prevent shrinkage.
Failure to properly manage inventory can result in poor visibility, as well as wasted time and money.
The Inventory Control Process
To control inventory effectively, you need item-level visibility. The easiest way to do this is to conduct periodic inventories or cycle counts of all inventory by location. These physical inventories provide an accurate count of inventory levels by part number or SKU and location. But because items are constantly added and removed from stock, the accuracy of this information is limited by the frequency with which you conduct your inventories. To address this, you can also track all transactions as they occur. The most common transactions are: receipts and issues, and moving inventory from one location to another.
Typically, a receipt or issue transaction includes the part number, quantity, date/time and location the transaction took place. For example: you receive 10 units of part 1234 to shelf 12 at 10:00 AM on January 16th. That’s a lot of information to manually record each and every time a transaction occurs. And it doesn’t include additional information commonly captured, such as the purchase order number of the item being received, or the person, customer or job the items you’re issuing them to. This is why, when organizations monitor inventory at the transaction level, they use a barcode-based system to help streamline the process.
Barcode-Based Inventory Control
Tracking item movements manually can be an extremely cumbersome process. So instead of using paper and pencil or spreadsheets, many organizations use inventory control software to leverage barcode technology to make tracking inventory more manageable. Barcode software helps drastically speed up the inventory control process and minimize errors.
Here’s how it works:
- You add parts and locations to an inventory tracking software database and conduct a physical inventory to determine baseline inventory levels. Existing manufacturer barcodes may be used whenever possible to avoid having to print new item labels.
- You scan items to receive them into inventory. Inventory tracking software makes capturing relevant information such as part numbers, locations and purchase order numbers easy, and often automatically tracks information like date/time and user.
- You scan items to issue them out of inventory. Again, information regarding part numbers, locations, order numbers, date/time and user can be tracked automatically.
This information is stored in the system’s database, and can be captured in real time or by batch-syncing data collected during scanning. Managers and operations personnel can then use the software to view inventory levels, easily locate inventory, and run various reports that help them perform their jobs more effectively and better ensure customer satisfaction.
It’s important to remember that an inventory control system is only effective if it’s used consistently. For example, if you receive nine items into stock and forget to scan the tenth item, the system will show that you only have nine in stock. The inventory level would be adjusted to reflect the correct information during your next physical inventory or cycle count, but in the meantime, your reported inventory levels would be inaccurate.
What is inventory control to you and your organization? Are you considering putting a barcode-based inventory system in place at your organization? RedBeam’s inventory tracking software can help you save time and money.