Inventory control systems: "The right inventory tools"
Your organisation may be a start up business, an organisation embarking on further growth, or an organisation that is established now starting to consider expanding into new markets. As each organisation evolves through different phases of the business life cycle, one of the common pitfalls tend to be that the inventory control systems and inventory management processes cannot keep pace with the level of growth and typically results in disconnects in the form of:
- Low level quality of information for management decision making
- Increased operational costs to maintain outdated systems.
- Poor data response time due to lack of hardware investment.
- Wrong stock mix ordered drives higher inventory levels.
- Physical stock not matching systems stock levels.
Organisations need to make the right choice and select the inventory control system that not only supports their current needs, but more importantly, is able to support additional functionality to narrow the business growth and technology gap at the right cost. The following are examples of inventory control systems that may suit your organisation.
Inventory control software
There is a range of inventory control software that will meet the needs of any size organisation each with a cost of entry that suits the type and scale of business. These systems all provide a standard level of functionality in terms of inventory control transaction flow and an integrated financial backbone that supports all core functions ie: Suppliers, customers, inventory management, fixed assets, costing, distribution, manufacturing etc. Depending on the type of business, some products focus on retail business solution, while others offer manufacturing business solutions and service based software packages. The common aspect for all of these baseline products is that businesses load and export data electronically or adopt a combination. As errors can also occur, the main advantage is that the systems provide an integrated solution compared with spreadsheet inventory control.
Excel spreadsheets for inventory control
Start-up FMCG SME's generally with a fairly low sku range will use this method of inventory control as it's low cost and very easy to use. As your business grows and requires additional reporting and control, the spreadsheet models can become quite complex and may lead to data errors, missing links, incorrect formulas etc. Sharing information with a number of users is challenging and can contribute to poor data integrity as several users will access the file. Item maintenance, inventory posting, accounts payable, BOM maintenance, item transfers etc are processes that are reliant on data process timing and accuracy.
Barcode inventory control systems
Bar code systems were specifically designed to improve an organisations speed and accuracy for processing transactions. A typical barcode system consists of label printer(s), access point(s), radio frequency scanner(s), label software and adhesive labels. In a retail environment, the point of sale (POS) system relies on the integrity of the barcode label to achieve the objectives of speed and accuracy. The accuracy is a function of content integrity at the time the label was produced as content is typically manually keyed by an operator. Bar code systems can deliver organisations real savings by reducing cycle time processing, providing realtime data for decisions and inventory reduction. As barcode inventory systems can fail, resulting in software or hardware replacement, the main draw-back of this system is the effort and cost of de-stickering or over stickering all your stock.
RFID inventory control systems
Radio Frequency Identification (RFID) is a form of communication technology that uses radio waves to identify or track objects. It is typically a small chip (RF Tag) that stores data which can be scanned by a reader in any direction, compared to a barcode label which is scanned by an operator or a fixed scanner under a line of sight. The RF tag can be reused as the content is refreshed (read/write) whereas the label is read only. The RFID tag is still a higher cost compared to the conventional barcode label