What is a UoM in Inventory?
Imagine you’re running a bakery. When purchasing flour you would buy it in bulk (i.e. in kilograms, pounds, or sacks). But the products you’d use it in you would sell in lots of different measures – you would sell cookies by the dozen, cakes by the slice, and icing by the gram.
That’s why a unit of measure (UoM) inventory matters. UoM inventories allow your business to maintain standard methods to track, store, and sell inventory. Thus, units of measure make the entire inventory management process simpler for manufacturers, wholesalers, retailers, or quite frankly anyone selling products in different quantities.
Below, we’re looking at UoM inventory, common types, and how to reliably use UoM every day with some real-life examples.
What is UoM inventory?
UoM inventory refers to the units various industries use for the measurement and tracking of inventories across their warehouses or supply chains. These units were created to assure consistent measurement, facilitating better and more accurate inventory tracking.
Let's explore a couple of examples of UoMs.
Types of UoM inventory
1. Each (EA) – The standard count most businesses rely on
Selling single items? The unit of measure in this case is "each." This is the most straightforward and popular type of UoM and it’s commonly used for products that are sold as individual pieces.
Examples include:
- A bookshop that sells individual copies of a book
- A furniture shop that sells one sofa at a time
- A tech store selling single laptops
2. Pack (PK) – Grouping for convenience
A six-pack soda box is a classic example of “pack" as a UoM and groups single items sold as part of a group, package, or collection. This is a good option for businesses selling items in bulk or a mix of individual and bulk items.
Examples include:
- A box of 12 doughnuts from a bakery
- A 4-pack of light bulbs at a hardware store
- A 10-pack of socks sold by a clothing retailer
3. Case (CS) – For saving more on bulk orders
Going one notch higher, cases work well for wholesalers and distribution businesses as they tend to solve common concerns if you operate on volume purchases.
Examples include:
- A restaurant ordering 24 bottles of olive oil in a case
- A liquor store buying a case of wine
- A grocery store stocking cases of canned soup
5. Pallet (PLT) – Essential for any warehouse
Considerably larger than cases, pallets are preferred by dealers who trade in volume as they make bulk shipping and storage so much more efficient.
Examples include:
- A warehouse receiving a pallet of 500 cereal boxes.
- A hardware store getting a pallet of cement bags.
- A grocery chain packing up on pallets of bottled water.
6. Roll (RL) – For continuous length products
Otherwise difficult to quantify, rolls are actually quite common.
Examples include:
- A carpet retailer selling floor coverings as rolls.
- Electronics stores offering wires in rolls.
- Art supply stores selling rolls of canvas.
7. Meter (M) / Yard (YD) / Foot (FT) – To measure exact lengths
This is a standard measure unit that works well in industries that sell their stock not according to weight or count but by length.
Examples include:
- Textile shops that sell cloth by the meter/yard.
- Hardware shops that sell chains by the foot.
- Lumberyards that sell wooden planks by the meter.
Why is it important to track UoM in inventory?
Using the appropriate unit of measure avoids inventory disasters by bringing more clarity into your inventory management process. Picture this:
- You’ve just opened a coffee shop and you accidentally ordered 5000 kilograms of coffee beans instead of 5000 grams. You clearly won’t need the extra kilograms for a small business just yet but you’ll end up having to negotiate sending back the surplus.
- You manage a factory that miscounted its cases and ordered only 5 bottles of lubricant instead of 5 cases. Your manufacturing process will be delayed unless you pay the extra fees for fast delivery for the remaining cases.
- You did inventory in a rush for your clothes boutique and accidentally stocked up on yards of denim instead of pairs of jeans. This is yet another case of “we’ll try to send these back” or maybe make the most of it and create your own line of jeans!
Keeping track of units of measure helps provide clarity and reduces the chances for human error.
How to track UoM inventory
You should opt for one of the two main approaches that can help you keep better track of your UoM inventory:
Tracking UoM inventory with spreadsheets
This is the manual method that works well for small businesses with small stock volumes. If you’re just getting started, you can reliably use a spreadsheet.
The biggest problem with this manual method is how prone it is to human error. The more inventory increases, the chance of human error increases. This is perfectly normal and there’s a solution for this.
Tracking UoM inventory using inventory management software
By automatically converting UoM when needed (like a case into single item units), you can ensure your stock levels are correct, deal with fewer errors, and create a more efficient order fulfilment process.
The mere process of eliminating manual counting and order errors is a good enough reason to look into automatic UoM inventory tracking. In fact, the extra real-time tracking capabilities will also prompt you to make quicker business decisions.
As an organisation juggling multiple UoMs, opt for inventory management software such as Unleashed to give you an extra layer of control. The tool will ensure inventory accuracy regardless of how you receive, store, or sell these products. So you’ll count the right units at the right time, every time.