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Distribution: Inventory Tracking in the Warehouse

The operations at a company warehouse directly impact productivity and profitability, dictating the company’s success.  Asset and Inventory tracking provides warehouses with constant knowledge of stock and location of goods, allowing for the most efficient path down the supply chain possible.

In accordance with a survey of warehouse managers, the demands for warehouse efficiency are on the rise. Consumers, amid the down economy, are demanding better prices, while the warehouses must learn to become more efficient with less, while becoming more flexible. The majority are leaning on technology to help make these bounds.

Asset Management and the Supply Chain

The tracking and management services needed by a company vary based on what stage in the supply chain they are in. Basically, a company has a choice between two systems for asset management: barcodes or RFID tags. The type of tracking chosen should be directly related to the cost of the asset being tracked.

Generally, RFID tags are used on more expensive items (typically $500 or greater) and barcodes are used on inventory. Asset Management occurs in manufacturing or in the office, and inventory tracking occurs in the warehouse.

The top of the supply chain is typically Manufacturing, which requires some of the most expensive assets in a company layout. An optimal system for manufacturing, thus, would be RFID. All the expensive equipment for manufacturing a good can be constantly tracked, providing location and real time data. Intersil, a PC board manufacturer for multiple industries, would use RFID tags for their testing, office, and manufacturing equipment that is highly valued by the company. This eradicates doubt of where assets may be, providing financial and mental security.

Tracking Warehouse Assets in Real Time

Throughout the supply chain, asset management becomes less easily applicable and inventory tracking is utilized more. Inventory tracking is like asset management, but on a larger scale. Whereas an RFID system(asset management) would need an infrastructure of readers and RFID tags on every item of inventory to track the goods in real time, a barcode system(inventory tracking) would simply put barcodes on all inventory. This is more effective than paying for live tracking on low value goods.

In the case that a company’s goods, even the wholesale level, are highly valued and profitable enough to put RFID tags on them, RFID is a great solution. If a computer company received a pallet of laptops, RFID tags would show that they have arrived at designated locations immediately upon their entrance to the reader infrastructure in place at that location. This allows for a short transition between the warehouse and distribution to the consumer, ultimately yielding a more efficient business model.

Most businesses at the distribution levels of the supply chain, however, sell goods, which given their value, would make RFID tags a cost ineffective system. They implement a barcode system, and when a pallet of goods arrives at the warehouse, rather than automatic location and data collection occurring, the pallet needs a manual scan to register the location of the goods. With the use of a master tag – one barcode placed on a pallet that accounts for every item on the pallet – the time spent manually inputting inventory is minimized drastically.

Managing Multiple Facilities

In a massive company like Costco, who has 454 warehouses just in the United States, the innumerable stores of inventory across the nation must be tracked closely to be successful. In the case that a warehouse in Phoenix needs technology goods from a southern California warehouse,  a master tag is scanned in, and Costco can immediately find a pallet of goods and have it relocated to any warehouse of their choosing.

The ability to track all assets and inventory at once in each separate facility allows for communication and transportation as necessary between warehouses. The daunting task of managing hundreds of thousands of inventory is suddenly made manageable, with every asset visible, located, and tracked.

Throughout all stages in the supply chain, asset management is an important tool for any business. It eliminates losses, aids communication, and catalyzes efficiency boosters amid transitions from one stage of the supply chain to the other. Asset management is the far-seeing eye of the business, allowing the company to look ahead, dodge problems, and optimize the business model.

For a look at our inventory management solutions, go to https://www.abr.com/Solution/New-Inventory-Management.

Image cc Flickr via Nick Saltmarsh

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