Some of the more popular inventory control systems available include the barcode system, the radio frequency identification system (RFID), and the manual entry system. This article will discuss these three systems and hopefully help you in deciding which is best for your company.
Manual entry systems are usually done on computer these days, although there may be a few really old people who are still using paper and pencil. The idea is when you purchase inventory you enter the information into the computer via a person. The person manually enters the product number, the quantity, the price, etc.
Advantages of manual entry: Sweet and simple. It makes sense and you don’t have to purchase an expensive system and understand technology to get it working.
Disadvantages of manual entry: People are human and tend to make errors. Data entry errors can cause a lot of problems to inventory. For example if something goes missing, does that mean someone stole it? Or did the accounting clerk simply enter in the wrong quantity?
Another disadvantage of a manual entry system is that it is time consuming. Even if your accounting clerk can punch in number really quickly, he/she can’t do it as fast as a machine.
Barcode Inventory Control Systems – The barcode revolutionized inventory management. Suddenly, all you needed was to point a scanner and click and all of the information was uploaded. Essential parts to any barcode system include the reader, the labels, a label printer, and some form of software to manage it all.
Disadvantages of a Barcode System: Startup costs can be a bear depending on the amount and complexity of the inventory you have. If you only need one reader/scanner, then it isn’t that expensive. However, if you need hundreds of them, then the price can really add up. In addition to the equipment, you’ll need to train everyone on how to use the new system. You’ll also need to enter the information for and print the labels.
Advantages of Barcode System: Very few errors. As long as the label has been printed correctly and the initial information was entered correctly, then you’ll never have any data entry error with a barcode system.
Another advantage of a barcode system is that it is a lot quicker then manual entry. Just one click and all of the information is uploaded in to the system.
RFID Inventory Control Systems – By now you have probably heard rumors about how these little RFID tags can be inserted in your skin and pinpoint your location anywhere in the world. Unfortunately, the technology isn’t quite that good. In fact, RFID works from about a foot away in most cases. For an inventory control system that uses RFID to work you’ll need a RFID reader, RFID tags, and some RFID software to keep track of things.
How it works: basically a lot like barcode system except for a little more sophisticated. Once the RFID tags are within the reader’s range the information is automatically entered or read. This is cool because it means you can scan more than one item at a time. For example at a public library you can check out multiple books without having to scan each one.
Disadvantages: Startup costs are even more than the barcode system. Initial implementation may require expert help.
Another disadvantage of an RFID system is the fact that you have to squelch people’s expectations. A lot of inventory managers believe that RFID is going to allow them to see exactly where every item in the huge warehouse is. This may be true with the most high tech and expensive RFID systems available, but currently most readers don’t reach out more than a foot.
Advantages: RFID is even faster than barcode because you can scan multiple items at once. Just wait for the day when you’re at the grocery store and all you have to do is push your shopping cart loaded with items underneath the RFID reader.
Long range RFID systems will enable inventory managers to reduce shrinkage. They will be able to visually see the inventory leaving the warehouse through the RFID system.
Another potential advantage of RFID is the year-end inventory check should be really fast. Just go to the computer and see if the entire inventory is on hand and you’re done.
That sums up our discussion on inventory control systems. For now, most companies are probably still better off with the old barcode system. As soon as some of the bugs are worked out of RFID systems, the capabilities are increased, and the prices reduced RFID will be the best thing to inventory management since, well, the barcode.