All types of inventory management system software have their own pros and cons! Read this article and discover more!

 Properly managing your inventory demands a special software system. Regardless of whether the system consists of using a modern radio frequency identification software or writing inventory levels on a piece of paper, an inventory management system is necessary if you want to run an effective business company. The different types of inventory management systems have their own advantages and disadvantages. For startups and small businesses choosing the right one comes down to which type of system offers the most value for the company.

  • Manual – A lot of small business owners keep track of their inventory manually. The best method to keep track of inventory manually is to use a spreadsheet. As a business owner, you can use a spreadsheet to keep track of all inventory usage and purchases, set up the spreadsheet to calculate when new products need to be reordered, and etc. If you decide to use this system of tracking inventory, you should enter the values in the spreadsheet at least once a week. By doing so, you can manage your inventory properly with a very little investment. A major downside of this type of inventory management system is maintaining data integrity.
  • Barcode – Inventory management software that uses this method increases the efficiency and accuracy of managing the inventory. All popular brands and major retailers use barcode technology. When the barcode gets read at the POS system, the inventory sales information are read to a broader system that keeps usage statistics. The purchasing department uses this information to make buying decisions based on existing inventory levels and sales. Most warehouses utilize radio frequency identification or also known as RFID to scan the incoming inventory. The barcode technology assists the progress of the movement of inventory together with the confines of the warehouse.
  • Radio Frequency Identification – Another type of inventory management system. Businesses that use this type of inventory management usually move thousands of products through their doors. Radio Frequency Identification systems use two types of technology to manage and control the inventory movements – active and passive technology. Active technology utilizes fixed tag readers which are assigned directly throughout the warehouse and anytime a product passes the reader, the movement is recorded. Passive technology demands handheld readers to track inventory movement.

So, which type of inventory management system suits your business the most?