Introductions

Inventory control systems are technology solutions that integrate all aspects of an organization’s inventory tasks, including shipping, purchasing, receiving, warehouse storage, turnover, tracking, and reordering. While there is some debate about the differences between inventory management and inventory control, the truth is that a good inventory control system does it all by taking a holistic approach to inventory and empowering organizations to utilize lean practices to optimize productivity and efficiency along the supply chain while having the right inventory at the right locations to meet customer expectations.

That being said, there are two different types of inventory control systems available today: perpetual inventory systems and periodic inventory systems. Within those systems, two main types of inventory management systems – barcode systems and radio frequency identification (RFID) systems – used to support the overall inventory control process:

• Main Inventory Control System Types:
  • Perpetual Inventory System
  • Periodic Inventory System
• Types of Inventory Management Systems within Inventory Control Systems:
  • Barcode System
  • Radio Frequency Identification (RFID) System

Inventory control systems help you track inventory and provide you with the data you need to control and manage it. No matter which type of inventory control system you choose, make sure that it includes a system for identifying inventory items and their information including barcode labels or asset tags; hardware tools for scanning barcode labels or RFID tags; a central database for all inventory in addition to the ability to analyze data, generate reports, and forecast demand; and processes for labeling, documenting, and reporting inventory along with a proven inventory methodology like just-in-time, ABC analysis, first-in, or first out (FIFO), or last-in-first-out (LIFO). Read on to learn more about the four types of inventory control systems.

Perpetual Inventory System

When you use a perpetual inventory system, it continually updates inventory records and accounts for additions and subtractions when inventory items are received, sold from stock, moved from one location to another, picked from inventory, and scrapped. Some organizations prefer perpetual inventory systems because they deliver up-to-date inventory information and better handle minimal physical inventory counts. Perpetual inventory systems also are preferred for tracking inventory because they deliver accurate results on a continual basis when managed properly. This type of inventory control system works best when used in conjunction with 

a database of inventory quantities and bin locations updated in real time by warehouse workers using barcode scanners.

There are some challenges associated with perpetual inventory systems. First, these systems cannot be maintained manually and require specialized equipment and software that results in a higher cost of implementation, especially for businesses with multiple locations or warehouses. Periodic maintenance and upgrades are necessary for periodic inventory systems, which also can become costly. Another challenge of using a perpetual inventory system is that recorded inventory may not reflect actual inventory as time goes by because they do not use regular physical inventory counts. The result is that errors, stolen items, and improperly scanned items impact the recorded inventory records and cause them not to match actual inventory counts.