Skip to content
inventory-management-technology

The Many Types of Inventory Management Technology

There are diverse types of inventory management technology and systems, designed to properly sort, control and act upon information with a company’s inventory. As explained by Kenneth Hamlett of the Houston Chronicle, the two dominant types of inventory management technologies include manual and automated systems. But, there are additional levels of inventory management in between.

Manual Systems.

The basic and most limited type of inventory management system is a manual system. Think of manual systems as Excel documents and endless spreadsheets. Since the relative volume of inventory and supplies stays low, these systems are well-suited for small, new businesses.

Automated Inventory Management Technology.

Automated systems are designed for deployment when a company moves thousands, if not hundreds of thousands, of products and raw materials during operation. As a result, automated systems rely on computer-based tracking and tracing technologies, like barcodes, to provide information and manage the flow of goods. In addition, inventory management systems may include the use of automated identification and data capture (AIDC) technologies, including radio-frequency identification (RFID) chips.

Active Versus Passive RFID Inventory Management Systems.

These added layers of automation lead to better control and management over a system. In fact, RFID comes in two other forms, passive and active AIDC.

Passive requires someone to activate the receiver, but active systems automatically detect and register the RFID tags regardless of other activities. As a result, active systems are a superior choice, but they may come at a higher price tag.

Small-Business Accounting Tools and Systems.

In recent years, the development of smart phone apps has led to the creation of additional inventory management systems. In a sense, these are still warehouse management systems (WMS), explains Acctivate, but they rely on manual data entry and processing, making them susceptible to errors and problems. Furthermore, these solutions lack scalability needed when expanding a company.

Continuous Versus Periodic Review Systems.

The two remaining types of inventory control and management systems reflect how the system updates and tracks inventory counts, asserts Paul Trujillo of Wasp Buzz. In continuous review systems, orders are typically placed in the same quantities, but the system only places an order when the stock reaches a certain threshold. Meanwhile, periodic review systems order products at the same time, but the number of items changes to reflect individual-level needs of products.

Select an Inventory Management Technology That Meets Your Business Needs.

Broad changes in the marketability and use of warehouse management technologies have led to an immeasurable number of vendors in the market. But, the key to selecting the right system lies in understanding system variances and the features in each system that will help your business grow. Ultimately, you get to decide, but it helps to understand how to select and implement your inventory control system effectively.