The goal of inventory control is to reduce the cost of warehousing surplus products without negatively impacting a company’s sales by not having adequate inventory to fulfill orders. With proper supervision of product supply, warehouse storage, and easily accessible items, the company can maintain enough supply without raising the overhead costs.
Processes for managing products and locating materials throughout the warehouse facility can be developed and managed with computer based systems. RFID and bar coding technology allows a company to monitor inventory levels to meet current customer demands. Data collected in these processes can be used to identify trends and predict future demands. The company can use this information to manage manufacturing processes, raw materials acquisition, and control shipping costs.
Current systems using bar codes and RFID tags send data automatically to the management software. Well performing systems can reduce inventory Out of Stocks. Automatic tracking can include a wide collection of physical assets. Bar codes and RFID tags can be attached to merchandise, raw products, components used in manufacturing, or anything over which the company wishes to maintain physical control.
All transactions or movement of inventory feeds into the inventory management system. Movement can be identified according to the physical plant, work stations, or handheld and mobile computers. Remote viewing and counting technology allows the company to visually monitor asset movement and maintain quality standards. These systems also allow visual verification of data sent via the wireless control system.
Good inventory control must also include loss prevention procedures. Since inventory loss in warehouse facilities can come from employees, a good control system will include loss prevention as part of the system. Employee theft is on the rise and can eat into a company’s profits as easily as lost sales due to not having enough products to ship. SOPs should include having different employees handling receiving, inventory, disbursements, and adjustments.
The combination of modern technology and well trained employees is essential for creating effective inventory control system. Physical inventory counting can be a thing of the past. Companies can reduce the cost of labor, monitor and control inventory loss, and maintain a steady flow of products through the warehouse system and on to the customer. The more data compiled, the more effectively the company can control costs and profits. The control of inventory should be made part of the design of the entire warehouse management system. The capabilities of the management software should be evaluated in its ability to handle incoming data and the required reporting. The IT department should work closely with the directors of warehousing and manufacturing as well as vendors being evaluated for supplying the system.
Real time systems combine a wide array of components including asset tracking software, Radio Frequency ID tags, bar code tags and readers, and cameras, all with a wireless link together on the company’s network or on an internet based system. Companies with multiple locations can combine data and control capabilities to apply efficiencies across the entire organization.