For hundreds of years, every business in the world had to rely on physical inventory counts to make sure they knew what they had on hand, what they needed to order, and so on. This was the only way to monitor what products were going out and coming in. But with the advent of relatively new technology, that process is a lot easier, and companies have significantly more options for tracking their inventory. Even those that still have to do manual inventory counts from time to time can streamline that process significantly.
There are plenty of emerging technologies in the field which allow for a more precise physical inventory count. Companies can fold that need into a more automated system that helps to improve the practice overall, according to a report from Modern Materials Handling. This may be especially important for companies with inventory in more than one location, or frequently shift inventory from one place to the next, because that can dramatically complicate matters. Having the ability to "scan in" each piece of inventory, whether it has a barcode, uses an RFID chip, or something similar, can significantly increase the accuracy of all physical inventory efforts.
Why is that important?
Data suggests efforts to improve that process can reduce a company's inventory management problems and make them more efficient by appreciable margins, the MMH report said. That kind of technology can also streamline the ways in which inventory is purchased or produced in the first place, potentially reducing a lot of issues typically associated with manual counts.
"Knowing an inventory's location and count – with little or no need for users to manually enter data or stop and scan a bar code – is a powerful capability," Tom O'Boyle, director of RFID for Barcoding, Inc., told the site. "Through this level of instant visibility, organizations can obtain a clear direction of their assets, which allows them to make better business decisions without requests to validate the asset information."
In addition, having this kind of more accurate inventory data on hand can also be beneficial because it will help businesses keep closer tabs on how much inventory goes out and comes in at any given point, according to Cult of Mac. Over time, that can begin to inform other decisions for the company, such as what offerings prove most popular, and how they can better meet the needs of their customers or clients. Online retail companies use other consumer information, such as browsing habits, feedback, and social media, but manufacturers often don't have that luxury.
Consequently, the more that can be done to get a stronger handle on every step of the physical inventory count process, the better off manufacturers – and their bottom lines – will be going forward.
For more information on the importance of improving physical inventory count practices, please take the time to download our data sheet on the Physical Inventory Count Dynamics NAV Module.