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Inventory Control System

Understanding the advantages of a good inventory control system

An inventory control system is used in many warehouses to track the location, quantity, and status of goods that are to be sold. Shipping and receiving of products is scheduled by an inventory control system. Inventory control uses barcodes and RFID tags to track specific items.

An audit, or a physical count of inventory, is used to find out how many items are in an inventory. Inventory taking is often required in order to get an accurate count for accounting valuation purposes. Some inventory items have barcodes attached to them or imprinted on them. These barcodes can be read during an audit by barcode reading devices.

Some inventory items have radio frequency identification tags, or RFID tags. RFID tags are small microchips. These tags are easier to read than conventional barcodes. An RFID tag can be placed on an entire pallet of products and can be read by a tag reader device from several meters away. RFID tags can be linked to a burglar alarm system and can help protect inventory from theft.

A computerized inventory control system uses specialized inventory control software to tie together inventory and accounting systems. Orders to replenish inventory can be placed when inventories run low. This can reduce the amount of warehouse space that is needed. Perishable inventory items can be ordered at proper time intervals to ensure that they do not go to waste.

Inventory control systems help schedule purchases and ensure that a company's purchasing system places new orders at the proper times. By calculating the amount of time that it will take to receive items from different vendors, an inventory system can use vendors that not only offer lower prices but also offer better shipping times.

An effective inventory control system allows a company to make efficient use of its workforce. Workers can be assigned to perform tasks that can only be done when product inventories are available to be used in performing those tasks. Companies can train their workers to perform multiple tasks that are required at different stages of a product delivery process.

Seasonal items can be tracked by a good inventory control system. If a product only sells in the summer, then this product's inventory level can be managed so that the inventory is reduced when demand for the product is reduced. It would not make sense to continue stocking summer season items after the summer season has passed.

Damaged goods can be tracked with an effective inventory control system. Goods that are damaged in shipping can be tracked when incoming orders are received. These goods can be returned to a vendor for a refund or replacement. An inventory system can help management make decisions about retaining vendors or seeking new vendors.

Inventory control systems can be used to track the effectiveness of shipping procedures that are used to ship goods from a company warehouse to company stores. If demand for a product increases at one store, then levels of inventory can be increased at a warehouse that supplies that store. More trucks can be assigned to transport products from the warehouse to the store.

An effective inventory control system is essential for every company that wants to save money on its operations. Efficiency in ordering and transporting products needs to be an ongoing pursuit, not just a one time goal. Product demand changes, vendors change, and many other inventory control factors change over time. Every step in the inventory control process needs to be tracked continuously.