Inventory Control Systems

May 042010

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.

Inventory Control System Guide

May 012010

Inventory is an important part of any business. Companies need to ensure that the inventory is safe from shrinkage and that it’s not out of date. This article will list and review a few of the inventory control systems available.

Barcode scanners: These babies have been around for quite a while and your company isn’t going to outpace the competition by using them. However, they are a relatively inexpensive option and having a barcode sure beats having nothing.

The basic equipment you’ll need if you want your inventory control management system to be barcode oriented consists of a barcode reader or scanner, the barcodes themselves, a barcode printer, and the software that keeps track of all the information.

The Best Places to Find Barcode Equipment

WaspBarCode.com: They have a professional looking website that actually tells you the prices of everything you need without having to call them for a consultation. Think of these guys as the Wal-Mart of bar code sellers; they aren’t going to hard sell you, they’re just going to give you the facts and let you make your own purchases. They have trial versions and training as well. The only beef we have with Wasp is the fact that they charge $300 for their online training. Seems like if you spend all that money buying items from them, the least they should do is train you how to use it.

Fishbowl Inventory: The website isn’t as intuitive or aesthetically pleasing as Wasp’s is, but they do have one feature that helped them make this list: they have inventory control system software that integrates with QuickBooks. This makes it extremely nice for a lot of companies who are already using QuickBooks, but want to upgrade their inventory control management. If you rummage around their site long enough, you’ll find that they sell the readers and printers as well.

BarCodeHQ.com: If you thought Fishbowl’s website was a little off, then you’ll be shaken by BarcodeHQ’s site. These guys have been in the barcode inventory control business since 1985 and it looks like their website hasn’t been upgraded since then. Still, being in the business for a while means they have likely worked out some of the kinks that comes with technology; and that has landed them on this list.

Another control inventory system worth checking out is the RFID tag. RFID stands for radio-frequency identification, but it might as well stand for magic. Depending on how much money a company is willing to spend, these things can do just about everything an inventory manager could ever want.

The simple RFID systems are similar to barcodes. You run them through a reader and the information is uploaded to the system. However, one basic difference is that you don’t have to align the reader to label. You simply need the reader to be within a certain distance of the labeled inventory and it will pick up all the programmed information. Even better it can read multiple objects at once.

The really powerful RFID systems can track packages from hundreds of yards away. This means that an inventory manager can see on his computer screen exactly where the entire inventory is; these labels can even tell you how long the inventory has been there.

Best Places to Find an RFID Inventory Control System

Assetpulse.com: These guys specialize in asset control instead of inventory control. Due to the newness of RFID technology, it is still not economically feasible for most companies to be slapping RFID tags on inventory that is turned over frequently. Assetpulse has a clean looking website and some good information on RFID systems.

3M: A name you’ve heard of also sells RFID systems. The interesting thing is that 3m is using it more as a file tracker, then an inventory tracker. Again this is because a company’s files stay around for a long time while the hope is that inventory will be turned quickly.

Activewave: This Company actually focuses on using RFID for inventory. As with most companies in the business, they want to consult with you before they will talk pricing.

That sums up our discussion on the inventory control system. For now, if your company has a high turnover of inventory the safe bet is probably the barcode. In five to ten years RFID systems will be the standard.


Guide to Inventory Control Software

Apr 232010

Whether big or small, your company’s inventory is crucial to meeting your business objectives. This article describes risks to your inventory. It also provides a guide on what to look for when purchasing inventory control software. Finally the article concludes by reviewing some of the available options in the inventory software market.

Risks to Your Inventory

  • Sadly, the greatest risks to your inventory come from within your organization. Most thieves are opportunists, not cold-hearted stealers. Chances are against Brad Pitt, George Clooney, and Julia Roberts teaming up to devise some crazy way to steal your company’s inventory. However, there is a much higher chance that the teenager who boxes your widgets might decide to pocket a few of them. Control your inventory against internal theft.
  • Nature might damage your inventory. Think about what controls you have in place for fires, floods, lightning, snow storms, hurricanes, tornadoes, etc.
  • Natural decay might be an issue depending on the type of inventory you have.
  • High or low temperatures may be another risk.
  • What to Look for in Inventory Control Software

Before purchasing control inventory software you will want to go through the following decision making model (these come from the COSO framework). Look at your organization’s internal environment. Meaning you should ask yourself do most of the people who work with the inventory seem honest. Does upper management seem honest?

Next you’ll want to identify how your inventory plays into the overall objectives of the organization. If it is a small part of the organization’s objectives then you won’t want to spend as much money on inventory control system software. However for most businesses inventory will be a large component of the objectives.

At this point you will want to identify events that could happen to inventory that will affect whether or not your business reaches its objectives. Identify as many as you can, I’ve given you a few ideas above.

Next assess the likelihood of these risks happening as well as their potential impact on the organization’s objectives. After following through these steps you will be in a much better position to decide what type of software for inventory control your organization needs.

Reviews of Available Options

Barcodes are one of the most cost-effective available. These little barcodes will help control against theft and data entry mistakes. Here’s what you’ll need:

  • Barcode Scanner: These are the little babies that scan the products and work with your warehouse inventory control software to update the amounts of inventory you have on hand (very cool). They don’t come cheap, starting at round $300 each.
  • Barcode Printer: These print out the barcodes with the numbers on them and the straight lines. They cost around $1,500 depending on what you want.
  • Labels: These cost around $10 for a roll of them. This is just the special paper that the printer prints the labels onto. One roll usually has about 2000 labels on it, depending on the size of the labels.
  • Inventory Control Software: This is where you initially enter all of the information from the barcodes. This can be a hassle up front, but after you have everything up and running you will love this software. Depending on the size and needs of your business this software costs anywhere from a couple hundred bucks to a couple million dollars. Most companies will end up paying around $2,000.

Radio-Frequency Identification (RFID) systems are a more expensive, but a very cool option for inventory control. Basically you don’t need one of those annoying little scanners. RFID works with little tags that send a signal back to the reader which is placed somewhere in the warehouse. Using control software and a computer you can see exactly where your inventory is at. If an employee steals something, you will know immediately. Some of these systems are so advanced you could probably follow the red-dot and tackle the thief. Very cool I know. Here is what you will need for this inventory control system.

  • The Reader: This is the object that receives the signals from the tags. It is a very intelligent watch dog. These are expensive and most companies won’t release any standard pricing. The average is probably around $2,000 per reader. How many you need will depend on the size of your warehouse.
  • The Tags: The tags have a tiny chip in them that sends information to the reader. Some tags will let you store a lot of information like when it arrived at the warehouse, how long it has been sitting there, etc. These tags cost anywhere from five cents a tag to 25 cents a tag.
  • The Software: Unfortunately you need some sort of software to keep track of everything. This control software usually starts at around $1,000

Whether you need restaurant inventory control software or you work for large chip manufacturer, it is a good idea to think about control software for your inventory.

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