Tracking inventory is an integral part of any manufacturing, wholesale or retail business. Not only is it imperative to know what is in stock and what needs to be replaced but it's also used in determining inventory taxes and portions of the business's value. Tracking inventory means cataloguing all deliveries and receipts of material, where it is located in warehouses, on the floor or in transit between locations and when it is sold or shipped out. There are several different tools for tracking inventory and maintaining accurate records. Some are very high-tech while others are as simple as taking a look and making a notation in a ledger.
Bar-code technology allows a business to instantly track all materials received, stored and shipped. A quick scan with a laser reading device details all the information for a specific item. A product as small as a single pencil to something as large as industrial machinery, locomotives, airplanes or seagoing ships can be bar-coded and tracked with a quick scan.
Bar-code inventory control can be as automated or manually operated as necessary. Grocery stores keep accurate counts of thousands of canned goods, produce and other items as each item is manually scanned at the check-out register. Distributorships and wholesales have bar-code scanners attached to mechanized handling equipment. All items on the conveyers and transport carts are scanned, registered and maintained automatically with digital accuracy.
An SKU or stock-keeping unit is attached to items in stock and any other billable item the business may make available. SKU numbers allow for both tracking the inventory and any attached labor, shipping and associated charges with the product’s sale.
SKUs also allow for quick inventory of units containing multiple products with individual bar codes, such as a crate of 100 cans of soup at a grocery store. Each can has a bar code, but accessing the SKU can determine an inventory of 100 cans without calculating each individual item. SKU numbers are usually used with wholesalers and distributors dealing in large quantities of products.
Although technology aids in maintaining accurate inventory records, a manual inventory is occasionally still required. This involves counting, sorting, identifying and locating materials on the shelf, in the warehouse and in transit.
The reason for manual inventories is determining the amount of theft the business has suffered, accounting for damaged goods and ensuring all bar-code and SKU tracking efforts are accurate. If an item is stolen, it is scanned in but not scanned out. This can lead to an error in the inventory count. Damaged material may be discarded without accurately noting the inventory adjustment. Bar-code scanners may inadvertently fail to pick up a bar code when scanning through human error or hardware problems.