Inventory encompasses the systematic listing of goods a company stores, presented in either physical or digital formats in an organized, detailed manner. To effectively manage inventory, verifying that the stock of stored products—including their quantities and attributes—aligns with the data recorded in the business's systems is essential.
While various types of inventory exist, they all share a common goal: to maximize profits while minimizing storage costs, maintaining operational levels, and enhancing customer service. But how can you efficiently conduct inventory checks? In this article, we present three examples to illustrate the process: inventory management using Excel, another example with specialized inventory software, and a final case in a fully automated smart warehouse.
Example of Inventory with Paper or Excel
Each month, the warehouse manager takes advantage of quieter hours to manually conduct inventory and ensure that the received and dispatched pallets match the total stock quantities. The manager circulates the warehouse with a paper list, counting the pallets for each SKU and manually entering the data into an Excel spreadsheet.
If executed properly, the number of pallets for each SKU should equal the difference between shipments in and out since the last Excel inventory was conducted.
Taking inventory on paper is a fundamental approach suitable for companies with very low stock levels and limited inbound and outbound activities. As business volume increases, transitioning to digital methods is advisable to minimize errors and enhance efficiency.
Example of Inventory with Specialized Software
To streamline inventory management, the company employs specialized inventory software, such as WMS, designed to facilitate product management. Integrated with the business's ERP, this program automates the shipping and receiving processes within the facility.
Before commencing inventory, all product details—including descriptions, units of measure, attributes, images, and weights—must be entered into the WMS. Once the data is in the system, labels for each item are generated and affixed to the stock.
To optimize the process, warehouse operators utilize RF scanners to read barcodes, recording each item entering and exiting the facility. This ensures that every receipt and shipment of goods is documented in the system. Additionally, conducting a physical inventory at least once a year is advisable to compare the actual SKUs with those recorded in the system.
Example of Inventory in a Fully Automated Warehouse
Taking inventory in this automated setup is quite similar to the previous non-automated system, but operators no longer need to manually scan barcodes. This efficiency is achieved through a pallet checkpoint that checks pallet conditions, reads product barcodes, and transmits data to the WMS, which in turn updates the ERP database.
Each time an item enters or leaves the facility via pallet conveyors, the system automatically adjusts the stock levels, maintaining accurate records of incoming and outgoing quantities. This comprehensive tracking enhances product safety, risk management, and quality assurance. The high level of automation provides real-time perpetual inventory updates.
WMS: Your Perfect Ally for Inventory Management
Effective inventory management is a cornerstone of the supply chain. Accurately calculating the items a company should have in stock ensures smooth operations and prevents delays.