Easy Inventory Tracking Methods for MSMEs

29/7/2024, 4:30:05 pm , Written by Tasmiya Naaz

AICAN

Inventory tracking is a critical process for any business, especially for MSME manufacturers. It involves keeping a precise record of raw materials, unfinished goods, and ready-to-sell items. Accurate inventory tracking ensures that businesses always know their exact inventory levels, the location of each item or SKU, updated delivery statuses, and other inventory-related information. Let's explore how AICAN Optiwise can simplify inventory tracking for MSMEs.

What is Inventory Tracking?

Inventory tracking is the process of monitoring and managing stock levels within a business. This includes raw materials used in manufacturing, unfinished goods in production, and finished products ready for sale.

Importance of Inventory Tracking:

  • Manufacturing and Production: Ensures that there are sufficient raw materials to manufacture new items.
  • Warehouses and Retail Stores: Helps in fulfilling customer orders and maintaining updated stock levels.
  • Stock Locations: Identifies the exact location of each item, reducing the risk of slow-moving or dead stock.

"Effective inventory tracking is crucial for maintaining inventory accuracy and optimizing warehouse operations."

Key Benefits of Inventory Tracking

Improved Inventory Accuracy

Tracking inventory accurately helps in reducing discrepancies such as theft, damage, miscalculations, and shortages from suppliers. This enhances overall inventory accuracy and ensures that stock levels are always up-to-date.

Reduced Carrying Costs

Carrying costs include expenses related to storing, holding, and owning inventory, such as rent, labor, storage, and security. Effective inventory tracking helps in minimizing these costs by identifying and reducing excess inventory.

Enhanced Inventory Valuation

Accurate inventory tracking helps in assigning a financial value to unsold inventory, which is essential for financial statements. It also improves inventory turnover by ensuring that stock is replenished or refilled at the right time, avoiding stockouts.

Better Inventory Forecasting

With accurate data, businesses can predict or forecast inventory needs more effectively, ensuring that the right stock is available in the right quantities. This helps in avoiding over- or under-stocking.

Multiple Location Tracking

Inventory tracking enables businesses to monitor stock levels across multiple locations, ensuring better stock visibility and avoiding shortages.

"34% of businesses have delivered orders late due to poor inventory management. Effective tracking can prevent this."

Methods of Inventory Tracking

Manual vs. Automated Tracking

For small businesses, manual methods such as pen and paper, Excel spreadsheets, and Google Sheets inventory tracking can be low-cost practices. However, as businesses grow, these methods become time-consuming and prone to errors.

Automated Inventory Tracking

Automated tracking using inventory tracking software or mobile apps provides several benefits:

  • Faster Error Detection: Quickly identify and correct errors in inventory records.
  • Increased Accuracy: Achieve inventory accuracy of up to 95%.
  • Efficiency: Save time and reduce manual effort.

Inventory Tracking Solutions for MSMEs

Pen and Paper

A traditional method suitable for very small businesses with minimal inventory. It requires meticulous organization and can be time-consuming.

Excel Spreadsheets

A step up from pen and paper, Excel spreadsheets offer more structure and the ability to perform basic calculations. However, it can still be cumbersome for larger inventories.

Google Sheets Inventory Tracking

Similar to Excel, Google Sheets provides real-time collaboration and cloud storage, making it easier to share and update inventory records.

Third-Party Logistics

Outsourcing inventory management to third-party logistics providers can be an effective solution for businesses looking to streamline their operations.

Mobile Apps

Mobile apps offer on-the-go inventory tracking, allowing businesses to update stock levels and track items from anywhere.

Inventory Tracking Software

Dedicated inventory tracking software, such as AICAN Optiwise , offers comprehensive solutions for managing inventory. It integrates with supply chain management systems, providing real-time updates and detailed insights.

"At AICAN OptiWise, we offer affordable, customizable solutions to help MSME manufacturers manage costs and optimize production processes."

Effective Inventory Tracking Strategies

Implementing Best Practices

  1. Set Reorder Levels: Determine the minimum stock level at which new orders should be placed to avoid stockouts.
  2. Regular Audits: Conduct regular inventory audits to verify physical stock against records.
  3. Use Barcodes: Implement barcode scanning to improve accuracy and speed of inventory updates.
  4. Automate Processes: Use software solutions to automate inventory tracking and reduce manual errors.
  5. Monitor KPIs: Track key performance indicators (KPIs) such as inventory turnover, carrying costs, and order accuracy.

Leveraging Technology

Using technology to automate inventory tracking can significantly improve efficiency and accuracy. AICAN Optiwise offers features like real-time stock updates, multiple location tracking, and integration with other business processes, making it an ideal choice for MSMEs.

Case Study: Manual vs. Automated Inventory Tracking

Manual Tracking Example

Imagine a small retail store using pen and paper to track inventory. Every time a sale is made or new stock arrives, the staff manually records the changes. While this method is low-cost, it is highly time-consuming and prone to errors, leading to frequent discrepancies in stock levels.

Automated Tracking Example

Consider a medium-sized manufacturing business using AICAN Optiwise for inventory management. The software automatically updates stock levels in real-time, tracks the location of each item, and provides detailed reports. This reduces manual labor, increases accuracy, and provides valuable insights for better decision-making.

Inventory Tracking and Supply Chain Management

Effective inventory tracking is a vital component of supply chain management. By maintaining accurate stock levels, businesses can:

  • Optimize Order Fulfillment: Ensure that customer orders are fulfilled promptly.
  • Reduce Lead Times: Minimize the time taken to restock inventory.
  • Improve Supplier Relationships: Maintain accurate records to negotiate better terms with suppliers.
  • Enhance Customer Satisfaction: Deliver products on time, leading to higher customer satisfaction.

"Effective inventory tracking can transform supply chain management, leading to increased efficiency and profitability."

Conclusion

Effective inventory tracking is essential for maintaining inventory accuracy, reducing costs, and optimizing operations. By implementing the right strategies and leveraging technology, businesses can ensure they have the right stock in the right quantities at the right time.

Explore more about how AICAN Optiwise can help streamline your inventory tracking and boost profitability.

By understanding and implementing these strategies, MSMEs can overcome the challenges of inventory tracking and enhance their operational efficiency. If you’re ready to take your inventory management to the next level, consider integrating AICAN Optiwise into your business processes.

In the Manufacturing World, Accurately Tracking Costs is Crucial for Profitability and Efficiency Understanding the differences between job costing and process costing can help businesses determine the best method to track expenses and ensure they are on the path to success. At AICAN Optiwise , we simplify end-to-end operations for MSME manufacturers, making it easier to manage costs and optimize production processes.

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