Effective asset inventory management is crucial for your business no matter what industry you thrive in.
Theft. Shelf Life. Damage. Excess Supply. It all adds up, and negatively impacts your business’s bottom line. If you carry too little inventory, you lose sales and have to deal with unhappy customers. Too much inventory causes storage issues and increases expenses. Effective asset inventory management is crucial for your business no matter what industry you thrive in.
Asset and inventory management can be implemented in your company. When done properly, it will help you forecast future needs, allow you to control how much of a particular asset is stocked, what is selling well, what is selling poorly, and track how your stock and inventory moves in real-time while generating revenue.
What is Asset Inventory Management?
Asset inventory management is how your business tracks all of its assets, from tangible fixed assets, like property, inventory, stock, and equipment. Intangibles such as intellectual property, patents, and more are also considered assets. Managing control allows you to analyze your assets, collect statistics, and auto-schedule maintenance and repairs. It helps you monitor the assets’ entire life cycle.
A robust asset inventory system also integrates with your accounting processes. This gives you a clear look at everything your business owns and how they are being utilized. It gives you a roadmap to follow so that your business and its assets are efficient and cost-effective.
What is the Difference between Asset Inventory Management and Asset Tracking?
While asset inventory management and asset tracking are frequently used interchangeably, there are differences between them. Yes, they both focus on improving how your resources and assets are efficiently used. Yes, they both serve as a catalyst for reducing cost. And yes, they both are involved in tracking assets.
The difference is how your assets are tracked and why you are tracking them. Let’s break it down further:
|Asset Inventory Management||Asset Tracking|
|• Focuses on items that are sold by your business, or items used by your business, i.e. paper products, cleaning supplies, etc.||• Focuses on the assets your business owns, i.e. equipment like scanners, ladders, computers, etc.|
|• Refers to stock that is in your warehouse for a short period of time before it is used or sold||• Refers to assets that are owned, or will be owned, by your business for at least 12 months|
|• Tracks: where the item is located, shelf life, quantity in stock, value before it is sold/used||• Same as above, but includes depreciation, performance and maintenance requirements|
How Do You Manage Your Asset Inventory?
In order to adequately track your inventory, you must establish your asset inventory. Managing your assets and inventory goes beyond counting product. Here are five steps to creating an asset and inventory management system.
Step 1: Identify the goals of your asset inventory project.
Before you start counting your inventory, define the goals of the project. Make sure they are explicit and clear so that everyone understands why the inventory is being taken. Start with your end goal in mind so that you are able to capture your data and get it back in the needed format. Do not forget to also plan out the actual inventory process.
Step 2: Choose an asset inventory management system that is right for your project.
Research your platform choices to make sure your asset and inventory management tool is flexible, configurable, and transfers your data to the right software with the least amount of trouble.
Step 3: Choose where your data will reside on your computer system.
Where your inventory data lives in your organization is purely up to you. Consider who will be using the data, if you need to update any of the systems and where the system needs to be physically located in the office.
Step 4: Document your data collection process before you start.
By putting a process in place, everyone knows what is expected of them in the inventory taking process. It will let the data be captured in a consistent manner in the right format and will use the right method to reduce hiccups along the way.
Step 5: Train your team.
Training your team on how to conduct a proper inventory collection process will help ensure that the data being collected will be useful. Make sure they know how to use the data collecting tools, how to respond to emergencies that may come up, and how to implement the processes and methods you put in place as preparation.
Why is Asset Inventory Management Important?
When you have a comprehensive asset inventory management system in place, you will be able to leverage the data to get better prices on materials and available supplies in addition to accurate customer data. All of these items help you plan and forecast future products and projected sales.
You can also use it to track every aspect of your inventory, such as consumables, when items need to be restocked, and where they are in the warehouse. All of this information helps the personnel with picking, packing, and shipping the items to customers.
Seven Ways to Effectively Manage Your Asset Inventory
How do you become an expert in asset inventory management?
- Know your inventory.
While you may know what you sell, you need to know where your products are, if they need to be ordered, if they are now obsolete, and other pertinent inventory information.
- Check your safety stock levels on a daily basis.
Your safety stock level is the amount of product you can drop to before replenishment becomes critical. This will help keep your inventory data up-to-date when you look refresh it on a daily basis.
- Determine what is your most productive inventory.
While you want to keep some stock in play for items that don’t sell as well, knowing what your best-selling product is and focusing on keeping it above the safety level will ensure that you never run out of stock during critical sales times.
- Track any distressed inventory.
Distressed inventory are the items that are overstocked in your warehouse. Track them in addition to your fast movers. Knowing how long it has been in your warehouse will help you to sell before it can no longer be sold. It also helps you determine items what can be donated once they have been in your warehouse too long.
- Integrate your asset inventory management with your sales and operations.
By combining your asset inventory management system with sales and operations, your entire company can participate in maintaining your business operations and improving inventory control.
- Don’t fall prey to changing trends without testing.
While investing in new trends and fads seems like a good idea, you need to do so wisely. You don’t want to suddenly become overstocked with new products that you can’t sell after a few months. If you want to try something new, purchase product in moderation and test it out.
- Perform root-cause analysis on a regular basis.
Root-cause analysis will help you determine why your performance on excess and obsolete stock is so low. First analyze how your company can reduce the creation of excess and obsolete stock, and then concentrate on selling off the stock effectively.
What Does Asset Inventory Management Software Do?
The right asset inventory management software will help you collect and analyze data on your assets so that you can make informed decisions. By tracking every detail of these assets and inventory in your asset inventory management system, from procurement to disposal, you can review the cost benefits.
You also want to make sure that your asset inventory management system can be utilized across the company in different departments, locations, and facilities. Everyone uses the same program with access to the same, real-time data. This can help reduce your capital and operating expenditures.
Why Use Asset Inventory Management Software?
Why should your company use asset inventory management software? You should use it to:
• See a faster return on your asset inventory investments
• Provide measurable improvement to your operating efficiency to share with stakeholders
• Lower your costs by analyzing what assets are good and what assets are bad
• Reduce the administrative burden of producing complex reports
• Provide a higher level of compliance
• Manage your risk better
At Apptricity, we know asset and inventory management.
Apptricity’s Enterprise Asset Management Software application gives you a single, unified view of your asset and inventory management procedures. It also provides you with a cloud-based system, along with mobile applications, that feature IoT integrations. This means it provides real-time updates from end-to-end in your asset inventory management process. Plus, each application can be used separately or in conjunction with others to scale according to your needs.
Let us help you with your asset management system needs. Contact us today for a free demo.