Product and Inventory Tracking: How Is It Helpful to Businesses?
Whether in the retail, physical warehousing or production sectors, being able to track individual barcodes, batches or lots of goods is an essential ability. When dealing with sufficient volume, it’s impossible to keep current with what goods came from where and how much is available if it’s not probably inventoried and tracked.
There are different benefits to the use of product coding even before they hit a retailer’s store. Let’s look at a few of the ways that product and inventory tracking are helpful to businesses across the country.
Product Type Categorization
Stock inventory comes in several different types when it arrives in the warehouse. Using effective labeling and coding including barcodes, warehouse employees dealing with deliveries can scan the box and determine what’s inside.
The types of product include:
- The item. The product is shippable as it is. It’s pre-packaged without any assembly required.
- Needs assembly. This requires putting together using multiple parts to create the final product. The reason for this may include that the assembled item is too oversized for international goods shipping and so flat-packed to the warehouse and assembled from there.
- Related items. These are grouped as items that relate to a parent or are grouped together due to similarity, e.g. an article of clothing that’s available in multiple sizes.
- Bundle or Case. This is a box full of usually single products that are opened in the warehouse and repackaged to be sold individually. Doing it this way saved on packaging and shipping costs from the manufacturer.
How Inventory Systems Work
Effective inventory systems store product information which is identifiable by its barcode, SKU, batch numbers and lot numbers. A UPC number is often included too; it’s a newer version of SKU that has a barcode for scanning.
When intaking goods, the identifiable details such as the batch number of a product can be coded in during receipt to verify production information. This makes it faster to identify where problematic goods are within one store or hundreds of stores of a big-box chain.
Using Lot Numbers to Track Product Issues
Products are produced in batches. Usually, a manufacturer will produce a run of that product. Perhaps 200 units or 1,000 units. Each product run will receive a unique batch number. Each batched run may be set up to produce an identical product, has different batch number identifiers. When producing the product in two areas in the warehouse, it’s possible that while it might be considered all the same batch, each production area has a different lot number assigned. This way, if there’s a problem later, they know which production area to review for contaminants.
The job of tracking lot numbers is best performed by software that’s specially configured to get the job done. This is most helpful especially in consumable products and ones where there’s a topical use, i.e. a skin cream. Should a specific lot be found to be defective or contaminated, the company will need to issue a recall notice on the lot affected.
When receiving a recall notice, retailers can check their records and regional warehouses that stock items before dispatching them to retail store chains. They can also verify any goods currently on a truck being transported too. All products from that lot can be tracked and returned to the manufacturer, or destroyed, depending on what’s required.
Without products using batch and lot numbers, it would be impossible to isolate the affected products at all. The entire batch identified by its matching barcode would need to be canceled.
Buying and Managing Outsourced Goods
Many goods are now produced in China and shipped or flown in. Sometimes, more than one manufacturer is utilized to speed up production or to increase the total order size when it proves too substantial for one manufacturer to handle alone.
While it might not be possible to identify the manufacturer for identical goods once they’ve been unpacked from the shipping crate, that’s not always necessary. When each manufacturer has been given unique batch and lot numbers, retailers are clear on where the product was made and can refer back to the manufacturer if several products in a lot or batch are getting returned by their customers as faulty.
The retailer can then make a claim against the foreign manufacturer for compensation on faulty goods, as their end customer likely has already done by swapping the product out in the store for something else.
Better Inventory Management
Through the use of job management software to track current inventory, its location, and where it’s sourced from, companies are better able to manage goods on the shelf and in the storage areas. Tracking all sales allows for reporting and alerts to managers to remind them about changing stock levels.
With lead times that can be days or weeks, it’s necessary for retailers to keep inventory management under control constantly. It’s important to place orders when necessary to avoid running out of best-selling brands which would upset loyal customers. In the more sophisticated systems, orders are automatically placed when setup to do so for popular product lines. Other product lines can have manual orders placed, depending on demand.
Staying Organized is the Key to Success
The larger a business becomes, the more management of inventory, tracking of goods ordered, and general collection of data is required. In this age of big data, this is where it’s critical for companies to stay meticulously organized. This applies whether placing a new manufacturing order with an overseas manufacturer or using a manufacturer within the same state.
It’s when the organizational structure isn’t in place and businesses run “by the seat of their pants” that they run into difficulties. A lot or batch from a branded product gets a recall notice or a notification to stop selling it in stores and the disorganized company is left scrambling to track all stocked items of that product.
Investing in effective stock management software is necessary for any product-based operation to run efficiently and well. Don’t leave it too late to start or upgrade your software capabilities.