Asset tracking solves numerous business challenges, offering a framework allowing companies to become more efficient and boost the bottom line by making the best use of existing resources to achieve results. Among the many articles and resources offering best practices and advice for getting the most from your asset tracking solution are multitudes of valuable tidbits and tips. We’ve compiled a list of 50 asset tracking tips, including informative asset tracking tips and strategies from reputable resources around the web, to create a comprehensive list of asset tracking tips and tactics for the many industries that can benefit from asset tracking solutions.
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Choosing an Asset Tracking Solution
Effective asset tracking starts with getting the foundation in place: the tools, systems and applications that enable asset tracking and software solutions that streamline data collection and analysis. These asset tracking tips will help you select the best asset tracking tools and software to meet your company’s needs.
1. Know what you need to track. “Keep in mind that it is important to know the maintenance schedule, equipment uptime and downtime and the user on each machine. By integrating an asset management system into the warehouse or factory’s daily routine companies can increase the availability of production equipment and reduce the overall costs through better services and maintenance programs.” – Wasp Barcode Technologies, Five Tips To Select The Best Asset Management Solution, Manufacturing Business Technology magazine, Twitter: @MBTwebsite
2. Consider the full project management life cycle. ReliablePlant is an excellent resource for asset tracking tips related for manufacturing plants and similar applications. “If you think of the life cycle of an asset as one long project – a project that might last for as long as 20 or more years – it becomes apparent that what you are really looking at is a project that starts with the engineering and construction processes. The project then comes to include the cost to maintain, operate and refit, and culminates with a well-informed decision to decommission and replace the asset. In the absence of fully functional, flexible and integrated EAM and ALM systems, managing the life cycle of the asset from cradle to grave is a challenge.” – Patrick Zirnhelt, IFS North America, 7 tips for selecting asset management software, ReliablePlant, Twitter: @NoriaCorp
3. Evaluate and prioritize your company’s requirements. “First, define and prioritize the requirements of a fixed asset software package to meet these needs. Second, evaluate how each product measures against your requirements. Third, perform a test drive which allows you to try various features and ensure the software is a good fit. And finally, make your purchasing decision.” – Matthew P. Kennedy, 4 Steps to Select a Fixed Asset Management & Depreciation Solution, Bassetts, Twitter: @BassetseDepre
4. Gain visibility by selecting software with reporting and analytics functionality. “You can’t manage what you can’t measure and you can’t measure what you can’t see. When selecting a tool for your ITAM program, confirm it can collect the metrics you need to measure the performance of your processes. Furthermore, verify you can get the information out of the system easily into dashboards anyone can configure. This is the best way to ensure you have accurate information when making strategic decisions.” – Brian Hollandsworth, product manager, ServiceNow, 10 tips on how to win the IT asset management challenge, NetworkWorld, Twitter: @NetworkWorld
5. Asset management aids in aging infrastructure concerns. WaterWorld magazine provides asset tracking tips for water utilities applications, including valuable insights from studies and research on the benefits of effective asset management in the public works sphere. “A recent study by CH2M HILL in partnership with McGraw Hill Construction found that 75 percent of water utilities employing asset management practices had considered aging infrastructure to be a significant factor in their decision to adopt an asset management program.” – Art Haddaway, Assistant Editor, Best Practices: Study Examines Trends in Asset Management, WaterWorld, Twitter: @WaterWorldMag
6. Visibility is critical prior to asset acquisition. “Ideally before any acquisition takes place, you want to ensure you are fulfilling your fiduciary responsibility to your organization by having visibility on all of the surplus/available assets. This visibility is critical, because if you can simply redeploy an underutilized existing asset to fulfill a need, then you have just saved the organization more than the cost of that asset!” – Brian E. Thompson, CPPS, Los Angeles Chapter, Applying Industry Leading Best Practices to Asset Management Systems, NPMA
Asset Tracking Tips for Implementation
Choosing an asset tracking solution is the first step, but these asset tracking tips delve deeper into the strategies and tactics that enable seamless implementation. From identifying your existing assets to properly categorizing and differentiating asset management from inventory management, these asset tracking tips will help you implement the most robust and comprehensive asset management plans.
7. Track assets as they come into the company. “Identifying everything that requires fixed asset tracking can be the first challenge. Perhaps the easiest way of doing this is to begin tracking all assets as they come into the company, starting with Day 1 of business, if not before. Adding a new fixed asset’s information to a tracking system before the asset leaves the purchaser’s hands is recommended. This ensures that an asset doesn’t disappear before its presence has even been acknowledged.” – Jennifer VanBaren, What Are the Best Tips for Fixed Asset Tracking?, wiseGEEK, Twitter: @wiseGEEK
8. Use unique asset tracking numbers rather than the asset’s serial number. “It’s possible that an asset’s serial number will be identical to that of another asset. If the serial number is used as the tracking number, the duplicate numbers will cause confusion because there is no way to tell the two assets apart. This can compromise data integrity and lead to inaccurate customer balances and inventory, reduce your rental income and impact customer satisfaction. Using a unique tracking number different from the serial number eliminates these problems. In the rare event that a tracking number is lost, the asset still can be looked up using its serial number and re-labeled properly to retain the asset’s history.” – Christine Span, Marketing Specialist, Top Five Asset Tracking Best Practices, TrackAbout, Twitter: @trackabout
9. Know your sustainable level of service. The United States Environmental Protection Agency has put forth substantial research, including asset tracking tips and asset management strategies, that prove useful for many applications. “Knowing your required ‘sustainable’ level of service will help you implement an asset management program and communicate to stakeholders what you are doing. Quality, quantity, reliability, and environmental standards are elements that can define level of service and associated system performance goals, both short- and long-term. You can use information about customer demand, data from utility commissions or boards, and information from other stakeholders to develop your level of service requirements. Your level of service requirements can be updated to account for changes due to growth, regulatory requirements, and technology improvements.” – Asset Management: A Best Practices Guide, EPA, Twitter: @usepagov
10. Know the difference between asset tracking and inventory tracking. “Asset tracking—knowing what items of value a business uses, where they are, and who has them—is different from inventory tracking. According to Wasp’s ‘Asset Tracking 101’ graphic, asset tracking involves managing the location of internal resources needed to continue operating; tracking items being lent out; and monitoring depreciation, maintenance, and warranty contracts. Inventory tracking, by contrast, entails managing products that are sold, distributed, or consumed; tracking the receipt, storage, shipping, and sale of products; and monitoring inventory turns, age, and reorder levels.” – DC Velocity Staff, “Asset Tracking 101” graphic cites reasons to know where your assets are, DC Velocity, Twitter: @DCVelocity
11. Treat inventory management and asset tracking as two separate, yet vitally important, entities. SupplyTimes, a robust resource on supply chain management, often offering asset tracking tips and tactics to improve the flow of the supply chain, recommends treating asset tracking and inventory management as distinct functions. “While being able to see how both inventory tracking and asset management can have an impact on a company is important, understanding that inventory is what you sell versus an asset is what the company owns is essential. Reaching for a better understanding of the inventory management needs of a company means more than asset tracking. It means being able to differentiate between the two, assigning the financial valuation both data types require and being able to see how those values affect the overall corporate structure.” – Asset Tracking, Inventory Management: What’s the Difference?, Supply Times
12. Conduct a critical equipment analysis. “Understanding cost drivers will enlighten you as to the many costs associated with carrying excess inventory of spare parts. One of the ways to reduce inventory levels to only the essentials is to undertake a review of equipment criticality. Most CMMS packages have a coded field for identifying equipment criticality on, say, a scale of one to 10. More sophisticated packages allow users to assign weights and scores to an unlimited number of user-defined variables, in order to build a total criticality for a given asset or component.” – David Berger, P.Eng., contributing editor, 5 tips for managing spare parts, Plant Services, Twitter: @PlantServices
13. Balance costs, opportunities, and risks against the desired performance of assets. “Asset Management involves the balancing of costs, opportunities and risks against the desired performance of assets, to achieve the organizational objectives. This balancing might need to be considered over different time frames. Asset management also enables an organization to examine the need for, and performance of, assets and asset systems at different levels. Additionally, it enables the application of analytical approaches towards managing an asset over the different stages of its life cycle (which can start with the conception of the need for the asset, through to its disposal, and includes the managing of any potential post disposal liabilities).” – What is Asset Management?, The Institute of Asset Management
14. Optimize the asset life cycle. Life Cycle Engineering ran a piece that appeared in RxToday with valuable asset tracking tips and recommendations. The informative article advises optimizing asset operation within design ranges to maximize the life of your assets. “Many organizations suffer first of all from a lack of understanding of the inherent design capabilities of their assets and secondly, how best to operate within their ranges to optimize the asset life cycle. For some assets, either operating below or above the design range adversely affects the life of the asset.” – The Five Biggest Risks to Effective Asset Management, As appeared in the November Edition of RxToday, Life Cycle Engineering
15. Determine your strategic asset gap. “According to the U.S. Department of Transportation, the first step in a physical asset management process is to establish organizational policies, including strategic objectives and budgets. This helps to determine a company’s future requirements. The second step involves collecting and analyzing the current asset inventory and performance. The difference between where the company wants to be and where it is today is the company’s strategic asset gap, which indicates where the company needs to make improvements.” – Chirantan Basu, Demand Media, Organizing Function of Managing Physical Assets, Chron.com, Twitter: @HoustonChron
16. Create a database of your assets. “It’s a good idea to begin by creating a database of your assets. In that way you can check to see if an asset is already in your inventory database instantly after each scan. You can also use the database to insert descriptions of your assets so your employees or clients can view associated data in-app after each scan. And, if you want the person scanning to record the condition or otherwise comment on the asset, you can add data collection questions to your service which are presented after each scan.” – Asset Tracking – Inventory Control Best Practices, codeREADr, Twitter: @codeREADr
17. Eliminate ghost assets. “A ‘ghost’ asset is property that is lost, stolen, or unusable, but is still listed as an active fixed asset in the system. According to Asset Management Resources, a leading provider of asset inventory and reconciliation services, ‘After 14 years of experience, AMR has repeatedly found that 65 percent of fixed asset data is incomplete, inaccurate, or altogether missing, while 10 percent to 30 percent of fixed assets are no longer owned.’” – Best Practices for Fixed Asset Managers, Sage Fixed Assets, Twitter: @SageNAmerica
18. Determine responsibility for assets. “Ideally all assets would be tracked by an organization. However, it is usually too costly to track and assign ownership to every asset. Instead, an organization typically tracks those assets that are of importance to the institution. An asset’s importance can be based on a number of factors, including its sensitivity, criticality, value, or the compliance requirements placed upon it. Important assets should have an assigned owner responsible for establishing and maintaining appropriate safeguards to protect those assets.” – Asset Management, IU.edu, Twitter: @IUSafetyMatters
19. Put portable barcode scanners in the hands of the right people. NPMA.org often offers valuable asset tracking tips and information. This asset tracking tip from Marla Williams, CPPM, suggests the use of portable bar code scanners to aid data collection where it makes the most sense. “Put portable bar code scanners in the hands of the Information Technology and Facilities people actually receiving and/or installing the assets. It is not cost effective and often impossible to have Property chase down your assets in the field when the information could have been gathered by the people doing the job.” – Marla Williams, CPPM, Top Ten Tips for Successful Property Management, NPMA.org
20. Don’t forget about the finer points of planning. “Fixed asset planning is an intricate process, and certainly does not stand alone. Rather, it is informed and driven by accounting, recording and tracking. Some companies fail to look at the finer points of their holdings, leaving them in the dark when it comes time to either purchase more of a given product or unload others.” – Three Tips to Strengthen Your Fixed Asset Management, Sage, Twitter: @SageFixedAssets
21. Set benchmarks for which assets to track. “Depending on the size of your company and the number of assets, it may not be worth putting the same effort into tracking every asset. You need to monitor the condition and depreciation of any buildings you own, for instance, but you don’t need to barcode them to know they’re still there. California State University in Long Beach only tracks fixed assets worth more than $5,000 or important items worth $500 that can easily be stolen without anyone spotting the theft.” – Fraser Sherman, Demand Media, Methods of Tracking Fixed Assets, The Nest, Twitter: @TheNest
22. Incorporate financial forecasting into long-range planning. Government entities are increasingly placing effective asset tracking at the top of their priority lists, and as such, have become a useful resource for asset tracking tips and best practices. NJ.gov describes the value of asset management plans for long-term viability: “An asset management plan incorporates detailed asset inventories, operation and maintenance tasks and long-range financial planning to ensure that annual revenue reserves and reinvestment are sufficient to facilitate long-term viability of the system.” – Asset Management Guidance and Best Practices, NJ.gov, Twitter: @NJGovNews
23. Develop effective processes and documentation. “First, develop effective processes and documentation that answers these questions. What are the best ways to integrate inventory activity with material requirements planning, production scheduling and other functions? How are unit costs for labor and other overhead factored into the inventory value of subassemblies? Are all transfers of inventory to and from the warehouse promptly recorded? How are differences between physical counts and recorded amounts treated? Defining and documenting processes that address such questions provides a framework for effective inventory management.” – Brad K. Jay, Inventory Control: What You Must Know, AutomationWorld, Twitter: @automationworld
24. Embrace mobility. “Keeping track of assets at utilities is more complicated than at other organizations. Assets range from fixed poles and pipelines to moving vehicles, to parts and people. With today’s mobile technology solutions, your field force can easily integrate inventory management and asset tracking into the workday, improving your bottom line and overall operational efficiency.” – Manage Assets, Risks and Costs To Strategically Drive Success, Utilities Inventory Management/Asset Tracking, Motion, Twitter: @MotionComputing
25. Embrace the MRO (Maintenance, Repair, and Operations) approach. “The principle goal of every organization is to manage facilities at the lowest cost in the least possible time. Increasingly, organizations are finding that effective supply-chain management and an efficient storeroom operation to support maintenance, repair and operations (MRO) are critical elements that either make them competitive or contribute to greater inefficiency. A storeroom that supports MRO activities with the right parts in the right place at the right time drives the organization’s operational efficiency.” – Andy Gager of Marshall Institute, Special Report: Timely, Cost-Effective Inventory Management, Marshall Institute, Twitter: @Marshall_Inst
26. Designate a central location for MRO inventory to reduce hidden inventory issues. SupplyChain247 is a great source for asset tracking tips related to supply chain management. In an article offering valuable asset inventory management tips, John M. Donnelly suggests, “It is invariably more efficient to store MRO supplies in one central location per facility rather than keeping them in various unidentified locations. It is crucial to have computer systems to track, manage, and control inventory. Armed with usage data and transaction costs, an organization can “right-size” its MRO inventory in accordance with supply chain performance standards.” – John M. Donnelly, Five Basic Practices That Can Quickly Close the Gap with Best Practices in MRO Inventory Management, SupplyChain247, Twitter: @SupplyChain247
Benefits of Following Asset Management Tips and Best Practices
There are a multitude of benefits to following asset tracking tips and best practices for asset management, from cost savings to increase productivity, improved asset utilization, and much more. The following asset tracking tips outline the many benefits reaped from asset tracking solutions.
27. Predictive analytics capabilities provided by asset tracking help to keep capital and operational budgets tight. “Uncertainty around an economic recovery is keeping capital and operational budgets tight. Companies are now using specific capabilities to predict asset failure in order to avoid costly downtime and reduce maintenance costs.” – IBM United Kingdom Limited, Asset management: the changing landscape of predictive analytics, ITHound.com, Twitter: @IThound
28. Reduce risks by tracking IT hardware. “Whilst hardware is becoming increasingly commoditized at the desk side level; in the datacentre server, storage, network and infrastructure hardware assets still require significant capital investment and extensive maintenance cost for any organization. Additionally, asset loss, business or workflow interruptions and data breaches remain a serious risk. Tracking and managing these assets in the datacentre as efficiently as possible is critical to business operations and maximum return on investment. Asset Tagging, and the corollary activity of associating accurate data to the asset tag, is a practice for managing and reconciling ownership, location and configuration of hardware assets.” – David Foxen and Martin Thompson, Quick guide to Hardware Asset Tagging, The ITAM Review, Twitter: @itamreview
29. Asset tracking enables sustained asset performance, which allows the output of value to customers. Sustainable Infrastructure Management Program Learning Environment (SIMPLE) offers asset tracking tips focused on improving infrastructure management and sustained performance. “The capacity to produce output of value to our customers is directly related to sustained performance of our assets using the process of triple bottom line evaluation of the services provided utilizing environmental, social and economic analysis.” – What is Asset Management?, Sustainable Infrastructure Management Program Learning Environment
30. Asset tracking eliminates cumbersome and unreliable manual methods. “An exhaustive manual task, asset tracking systems monitor the location and usage of the assets. Barcodes and more recently, RFID tags with chips or magnetic stripes are used to identify assets. So called Smart tags can be used to record other attributes besides location like temperature to ensure quality levels of goods are maintained in transport.” – Asset Tracking, Supply Times
31. Asset tracking enables the “Smarter Physical Infrastructure.” “Organizations are faced with persistent challenges to maximize life cycle performance of their assets. More and more businesses are investing in complex infrastructures that are increasingly interconnected and dependent on operational technology. To combat such challenges, organizations are turning towards enabling processes and data integration throughout the lifecycle of their various assets. They’re making a leap towards implementing methods and tools to manage operational technologies that allow the harvesting of important data and insights with ease. IBM Maximo referred to this trend as the rise of Smarter Physical Infrastructure.” – Avigail Shabtai, Top 3 Emerging Global Asset Management Trends of 2014, Field Service Professor Blog, Twitter: @EuchlidesTech
32. Asset tracking streamlines auditing. “Audits can be completed quickly, easily and accurately. The use of a barcode on the asset identification label, and a handheld computer (with integrated barcode reader) to read those labels, means that it takes less than a second to audit each asset.” – An Introduction to Asset Management for Physical Assets, SageData
33. Asset tracking improves forecasting. “Asset tracking streamlines forecasting by maintaining precise inventory counts in a central database, along with historical data, previous orders and other information. Every bit of data is at your fingertips, enabling you to identify trends and make more accurate predictions to meet demands. That means you’re not stuck with unused surplus that’s taking up valuable space, but you’re not short on needed supplies.” – Nate Goodman, 4 Inventory Control Challenges Simplified through Asset Tracking, ThoughtReach, Twitter: @ThoughtReach
34. Prevent fraud with efficient asset tracking methods. “Did you know that asset misappropriation schemes are the most common type of fraud affecting small businesses? The best way to prevent fraud is to have accurate asset tracking and regular physical counts.” – [email protected] Team, Cover Your Assets – Fixed Asset Tracking, [email protected], Twitter: @NetatWork_corp
35. Asset inventory management isn’t just for retail and manufacturing applications. “The benefits of modern inventory management systems aren’t just for the retail and manufacturing sectors. They also offer great advantages for any organization that manages a supply chain for consumable items, such as the military and medical facilities.” – Tim Crosby, How Inventory Management Systems Work, How Stuff Works, Twitter: @HowStuffWorks
36. Increase staff productivity with automated inventory and procurement solutions. “Automated solutions for inventory and procurement deliver big savings over manual systems – from reduced administrative costs to shortened procurement and fulfillment cycles. Eliminating manual processes, for example, increases staff productivity; and tracking data to secure vendor rebates can result in significant monetary savings.” – Tina Stehle, Senior Vice President & General Manager, Agilysys Hospitality Solutions Group, Top Five Reasons to Automate Inventory and Procurement, Hotel Business Review
37. Asset tracking helps to prevent cash flow problems. Many asset tracking tips touch on the fact that asset tracking and effective asset management has far-reaching positive impacts across organizations, such as this asset tracking tip from BusinessBee: “Inventory software can help prevent cash flow problems by identifying which items need the most attention. For example, you might assume your most expensive items in your inventory are the most important. In fact, less expensive items affect your business more because they have higher turnover ratios. An effective inventory system will help you determine an item’s monetary impact on the business so you can keep a higher amount of the vital stock. When you understand how to balance costs with your company’s needs, you’ll know to order fewer unimportant items, which will help promote a steady cash flow.” – How Inventory System Software Can Help Reduce Costs, BusinessBee, Twitter: @BusinessBeeCom
38. Improve workflows and allow your staff to focus their attention on service delivery. In the case of one hospital, implementing a robust supply chain management system enabled clinical staff to place greater emphasis on patient care. “The most immediate gain resulting from the robust supply chain management system implemented at the CHUM is an improvement to the workflows of all OR employees. Relieved of inventory management duties, clinical staff are now able to increase their focus on patient care and support and the training of future nursing personnel. In addition, stock handlers in the materials management department and technicians from sterile processing now have a direct impact on the day-to-day progress of activities in the OR.” – Automating inventory management—an innovative approach to improving operating room supply chain performance: the CHUM case, Intelligent Hospital Today
39. Asset tracking improves quality control. “Certain inventory management best practices link to quality control. Employees should be provided with checklists and/or computing systems that can assist them in following proper procedures when checking the goods they receive. All goods must be examined for signs of damage, including leaks, tears, or broken seals; discrepancies in descriptions – product colors, styles, and sizes must be identical to purchase orders; and prices and terms of sale. If product quality is lower than agreed upon, the merchandise should be returned to suppliers. This measure not only avoids unnecessary increase in stock levels, but also prevents employees from offering customers inappropriate merchandise. If products meet the required quality standards, employees must consider particular factors, such as light, humidity and temperature, in order to avoid damaging the merchandise kept in warehouse.” – Clara Lu, Understanding inventory management best practices, TradeGecko, Twitter: @tradegecko
40. Make effective budgeting, operations, and financial decisions based on accurate and reliable data. A GAO report offers asset management tips and best practices for creating an effective and cost-efficient government. The report notes, “Accurate and reliable data are essential to an efficient and effective operating environment in the private sector as well as in the federal government. Inventory represents a significant portion of assets in the federal government and private sector. Therefore, managers and other decision makers need to know how much inventory there is and where it is located in order to make effective budgeting, operating, and financial decisions and to create a government that works better and costs less.” – Executive Guide: Best Practices in Achieving Consistent, Accurate Physical Counts of Inventory and Related Property, GAO, Twitter: @USGAO
Asset Inventory Management Tips
These asset inventory management tips will help you get the most out of your asset tracking solution. From streamlining inventory management to integrating asset tracking with financial applications and more, follow these asset inventory management tips to gain the most value from your asset tracking solution.
41. Asset tracking streamlines inventory management. Clearly Inventory is focused, clearly, on inventory, offering asset inventory management tips and best practices. An article on inventory basics offers this asset inventory management tip: “Most businesses have a large part of their capital tied up in assets. These assets may be things like buildings, automobiles, machinery, furniture, fixtures, equipment, computers, etc… Often businesses need to know the value of these assets along with other information as to where they are, when they were purchased, for how much, etc.. Your accountant may need this information, banks, insurance companies, partners, people in operations, and management. You can’t get the best use of your assets if you only have a vague idea of what they are, where they are, and what they cost. This is as good a time as any to count your longer term assets.” – Inventory Basics: How to Count Your Inventory Items, Clearly Inventory, Twitter: @ClearInventory
42. Assets play a role in net income calculations. “Assets (tangible or intangible) are anything a corporation possesses or controls that represents monetary value. In order for corporations to calculate the net income that results from its for-profit endeavors, accurate asset values must be ascertained and factored into net income results. Fixed assets are tangible items, like the property and equipment a business uses in its day-to-day activities. These types of assets aren’t typically sold to a company’s customer base; they are equipment, vehicles and other company-owned items that are used to help run the business, but lose value over time due to age and use.” – Brian Knott, Depreciation Basics: How Asset Management Saves Corporate Cash, Apptricity, Twitter: @apptricity
43. Measurement is everything. “Metrics are essential to a well-run supply chain. Metrics for their own sake, however, are worthless. The purpose of a metric is to drive change when the variable you are measuring trends in the wrong direction. A number of different metrics are useful for inventory management. Days supply by product and location based upon forecast is an excellent metric at the SKU level.” – Jane B. Lee, 8 Common-Sense Rules for Inventory Management, Inbound Logistics, Twitter: @ILMagazine
44. Eliminate data entry errors with barcode scanning. “Using electronic data interchange (EDI) and bar code scanning can help eliminate data entry errors. Huppertz suggests implementing a system of so-called ‘cycle counting.’ Choose a few items a day and compare the inventory record to the actual count. Best sellers should get counted more often.” – Lisa Girard, Five Steps to Painless Inventory Management, Entrepreneur.com, Twitter: @Entrepreneur
45. Inventory audits are still essential. Many asset tracking tips point to the importance of manual inventory reconciliation, which should occur periodically but regularly. In an article on Small Biz Resources, Raad Mobrem offers this asset tracking tip: “Even with the greatest technology around, we still need to reconcile the numbers in our books with real numbers. Inventory can get misplaced, stolen, damaged and thrown away. Doing a monthly or at the very least, quarterly audits of your inventory is a great practice. It’s an easy process that, with a well-kept system, will prevent major roadblocks in the future.” – Raad Mobrem, 6 Tips for Inventory Management, Small Biz Resources
46. Bulk-purchase discounts aren’t always as appealing as they seem. “Some business owners may be lured by bulk-purchase discounts into acquiring more inventory than they need. In some cases, however, inventory acquired through bulk purchases ties up cash and takes up retail, warehouse or manufacturing space that could be used for a higher return. Don’t forget to take into account these costs, as well as longer term costs tied to inventory obsolescence, spoilage or shrink when considering bulk-purchase discounts.” – Sageworks, 6 Tips to Improve Inventory Management, Funding Gates, Twitter: @fundinggates
47. Clearly describe the key elements of your inventory management system. “An effective inventory management system consists of a few basic elements. Most importantly, it is vital to be clear and descriptive of storage locations, items and inventory numbers. Ambiguous or unclear descriptions will be extremely difficult to manage later on.” – Andrea Hayden, The Basics of Inventory Management, Intuit QuickBooks, Twitter: @Intuit
48. Avoid downtime by keeping inventory of essential spare parts. “Another way to avoid downtime (or to ensure that you minimize the length of such an event) is through asset tracking. Do not forget this one important fact: Replacement parts are also a part of your inventory and are just as important as the main equipment. Therefore, treat your spare parts the same as you would any other machinery. Tracking spare parts is more than just knowing where they are located (this information is, of course, very important as well). It is also knowing how many parts you have on hand and how often you need them. If you understand your equipment’s maintenance schedule and follow a strict preventative maintenance plan, knowing how many spare parts you need on hand should, for the most part, be fairly predictable.” – Banish Downtime with These Inventory Control Tips, The Maintenance Management Blog, Twitter: @MAPCONtech
49. Integrate automated inventory management systems with accounting systems. “Automation can dramatically impact all phases of inventory management, including counting and monitoring of inventory items; recording and retrieval of item storage location; recording changes to inventory; and anticipating inventory needs, including inventory handling requirements. This is true even of stand-alone systems that are not integrated with other areas of the business, but many analysts indicate that productivity—and hence profitability—gains that are garnered through use of automated systems can be further increased when a business integrates its inventory control systems with other systems such as accounting and sales to better control inventory levels.” – Inventory Control Systems, Inc.com, Twitter: @Inc
50. Categorize your inventory. “Portions of your inventory will move faster than others and, therefore, require a different management approach. Indeed, the 80-20 rule applies to the items you stock, so it’s a good idea to categorize inventory and set priorities accordingly. For example, you might want to make sure you have a bigger stock buffer for your fastest moving items. Slower moving items may call for less security. This best practices inventory management approach is sometimes referred to as ABC analysis. Sales numbers are often associated with ABC analysis, but profitability is another way to prioritize. The NAW Institute for Distribution Excellence, for example, cites inventory stratification based on gross margin return on inventory investment as a best practice.” – The Top 5 Best Practices in Inventory Management, TLC Group, Twitter: @Infor10Syteline
Asset Tracking Solutions from Camcode:
