Three Alternatives to Tracking Inventory

Barcode systems are perhaps the most straightforward method of tracking inventory; they are easy to implement and make it possible to track virtually every inventory movement – through the warehouse and right up to the point of sale. However, barcodes are just one way of tracking inventory – let’s compare barcodes with some of the alternatives.

Barcodes

Barcodes are the most common inventory tracking method. Barcodes are cheap and incredibly simple – here’s a quick rundown of how they work. They are also easy to scan, whether you use a portable handheld scanner or an embedded scanning system at checkout. For a small-scale business, the simplicity of barcode tracking is hard to beat.

Radio Frequency Identification Tags

Inventory tracking using radio frequency identification (RFID) tags involves applying an individual tag to each item of inventory. Each tag has the ability to broadcast a weak signal, using a small antenna. RFID systems fall broadly into two categories – passive and active. Passive RFID tags do not have an independent power source. Rather, they are powered by electromagnetic fields created in the presence of an RFID reader. Passive RFID systems are less expensive and typically last longer than active RFID tags, as there is no battery to run down. Active RFID tags, on the other hand, use a battery to continuously broadcast a signal, so they are useful for tracking movement constantly in real-time. They are typically much more powerful and have a longer range, so are useful in the event of theft.

RFID vs Barcodes

Unlike barcodes which are scanned individually, RFID tags (such as an entire inward delivery of tagged goods) can be read passively at any given time. They also store much more information including batch numbers, traceability information, Bills of Materials and more.

Tracking inventory manually

If you are less concerned with real-time visibility, a manual tag-based system may be an inexpensive, low technology alternative to barcodes and RFID tags. Inventory is tagged as it moves from the warehouse to the shop floor. Tags are then removed at the point of sale, providing a rudimentary sales count. Alternatively, sales records in a POS system or stock book could be used in a similar way, albeit without the need for initial tagging. The downside of this approach is that it is difficult to track inventory throughout the business and all but impossible to access accurate inventory information in real-time. While this might be an acceptable inventory tracking method when a small business is starting out, it really pays to invest in inventory success early on.

Kanban

Kanban (literally meaning “sign” in Japanese) is used in the inventory context to refer to a system where a sign at the end of a bin or shelf triggers an action, such as moving to another shelf or reordering from a supplier. This is not an inventory tracking system in the true sense — although it is a simple alternative to automated reordering, it does not allow a business to track an item of stock throughout the warehouse.