A small difference exists when talking about asset management and inventory management. Some form of inventory control management usually comes to mind first when we discuss this subject. The difference between the two is what you are managing. While inventory is usually considered an asset, all assets are not considered inventory.
Inventory management consists of all the things you do to make sure that your company’s inventory is tracked correctly. Some common reasons for inventory management include avoiding shrinkage, preventing stock outs, and determining the optimal time to reorder.
Asset management is a little bit different. For one, you’re not nearly as concerned about reorder points and carrying costs. In general, assets don’t turn over as quickly as inventory. This leads to some intriguing options for asset management software.
A good example of asset management is a large firm who is trying to keep track of all of the computers and laptops it has purchased for employees. A company can lose a lot of money if it is not careful in keeping track of its assets.
Radio frequency identification (RFID) is a really neat tool that allows companies to track information quickly. Basic RFID tags only hold basic information like product number. However, the more complex tags can hold information like how much the asset has been depreciated, how long since the last time the asset was serviced, when the asset is scheduled for repair, and so on and so forth.
One of the criticisms of RFID tags is that they are expensive when compared to barcodes. This is a valid point when talking about inventory management, because the barcodes leave with the products. However, assets do not leave the company nearly as frequently meaning that placing RFID tags on them isn’t nearly as expensive.
A clear example of asset inventory management is a public library. The books aren’t necessarily inventory because ideally they will stay with the library for a long time. You may notice that more and more public libraries are starting to use RFID tags instead of barcodes. This is because RFID tags are cost effective for libraries.
Until RFID technology improves and prices come down, most companies will continue using barcodes for inventory. However, we predict that RFID tags will soon dominate the asset management industry because assets aren’t turned over as frequently.
Inventory Asset Management Software
The truth be told inventory management software will work just fine for asset management. Asset management software will work just fine for inventory management. There is a difference between the two categories of management, but the software performs the same.
Some popular options for inventory and asset management are listed below:
- Quick Books Enterprise
- Intellitrack
- Traker
- Altiris
- IBM’s Enterprise software asset management
- Fishbowl Inventory
One interesting service that we’ve stumbled upon in our journey to find out more about asset management is offered by Inventory Management Solutions (IMS). They specialize in fixed asset tracking. They will actually come to your company barcode, inventory, and reconcile all of your fixed assets. It might be an eye opener for some of the businesses out there to realize how much shrinkage has occurred.
In summary asset management is different than inventory management. That being said, the software and systems in place to manage the two are basically the same. As always feel free to leave comments, additions, and opinions below.
