As your once-small business blossoms, so do the logistical challenges: the question of how to keep track of your inventory will hardly ever leave your side.
Imagine running a video equipment rental company. One where cameras, lighting rigs, and sound equipment are your treasures - the tools that bring cinematic masterpieces to life. At the same time, you're dealing with a bunch of small, unmarked things, like cables and bulk gear.
How do you make sure all these vital items do not go missing in the shuffle of your rental business? That’s what we’ll explore!
Quickly read along to find out how to track your inventory and know where your items are at all time.
What is inventory tracking?
Inventory tracking is part of inventory management - it is not the same.
Inventory tracking is the process of monitoring your company’s inventory or stock of goods, materials, or assets.
It enables you to maintain accurate records of the quantity, location, and status of their inventory items and encompasses a range of activities, from item identification to updating records as items move in and out of stock.
As you might understand by now, inventory tracking is a vital component of efficient supply chain management and overall business success. Now, let’s talk about the why.
Why you need to track your inventory
Effective inventory tracking is not just a good practice for businesses; it's a necessity. Here’s why:
- Inventory Demand Forecasting: Customer demand is rarely static. It can fluctuate due to seasonal changes, industry trends, or unexpected events (like a pandemic). Inventory tracking allows you to adjust your stock levels in response to these fluctuations, ensuring you have enough of the right products on hand to meet customer demand without over- or understocking.
- Cost Control: Inventory represents a significant portion of a business's assets. Maintaining excess inventory ties up capital that could be used for other investments, while underestimating your inventory needs can lead to frequent rush orders and higher costs. Inventory tracking helps you strike a balance between having enough stock to meet demand and minimizing carrying costs.
- Operational Efficiency: Inaccurate inventory records can disrupt various aspects of your operations. For example, it can lead to your team accidentally planning broken or non-available items. Efficient inventory tracking ensures smooth operations by providing real-time insights into stock levels and reorder points.
- Prevent Theft and Loss: With equipment tracking, you keep a constant record of where your equipment is at all times. When your equipment does not arrive on time or is flagged as lost by one of your team members, you will be able to trace it back briefly, ensuring the assets' protection and financial integrity.
- Customer Satisfaction: Timely and accurate order fulfillment is crucial for maintaining customer trust and loyalty. Inventory tracking ensures that you have the right products available when customers need them, preventing stockouts and backorders.
Alright, by now you should be convinced to keep a close eye on your equipment. So what is the best way to track inventory?
6 ways to track your inventory
Inventory tracking methods can vary depending on the size and complexity of your business. Here are some general ways to track your items:
1. Barcoding and RFID Technology: Assign a unique barcode or RFID (Radio-Frequency Identification) tag to each piece of bulk equipment. Employees can then use handheld scanners or mobile devices to quickly scan items in and out, reducing the risk of manual errors and streamlining the tracking process.
Initial investment (in money, time and effort): High
Effectiveness: High
2. Regular Physical Audits: Conduct regular physical inventory audits to reconcile the physical count of equipment with the data in your inventory management system. This helps identify discrepancies and theft, ensuring accurate records.
Initial investment: Low
Effectiveness: Low
3. Automated Alerts: Set up automated alerts for equipment maintenance schedules, return dates, and low-stock levels. This ensures that equipment is well-maintained and available for rental when needed.
Initial investment: High
Effectiveness: High
4. Utilize QR Codes: QR codes can be affixed to equipment for easy scanning with a mobile device. These codes can link directly to information in your inventory management system, making it quick and convenient to access details about each piece of equipment.
Initial investment: Medium
Effectiveness: High (but only for serialized products)
5. Categorize and Label: Organize your inventory into categories (e.g., by type, size, or location) and label shelves, bins, or storage areas accordingly. This makes it easier for employees to locate and return equipment.
Initial investment: Medium
Effectiveness: Medium
6. Setting up an inventory ledger: This is an accessible way to track your inventory, especially for small to medium-sized businesses that may not require sophisticated inventory management systems. An inventory ledger is essentially a manual or digital record-keeping system that tracks the quantity and movement of your inventory items.
Initial investment: Low
Effectiveness: Low
Are you a small business owner yourself? Setting up an inventory ledger is not the only thing you need to take into consideration!
Best ways to track inventory for small businesses
For small businesses, efficient inventory tracking is both crucial and manageable. The best approach often involves a combination of practical strategies tailored to the business's unique needs and constraints.
Here’s a step-by-step guide on how to track inventory for small businesses:
Opt for resource management software
So let’s save some money and avoid unpleasant surprises. With resource management software that includes RFID systems, you keep real-time track of your equipment’s movements across locations, people, or teams.
Rentman offers a comprehensive solution to managing and tracking your rental equipment: trace, optimize and control all your items.
