The Nuances of Inventory Management


It seems straightforward: You count the items you have in stock, you write it down, and you know how much stuff you have available to sell. However, inventory management is so much more complicated than that. In fact, inventory management is so much more than the items you sell; it is also your equipment, your raw materials, and even your customers and sales. Much of what inventory systems track you can’t simply count in a spreadsheet with any efficiency.

When your business is small and fragile, it is especially important you have an accurate account of your inventory, assets, and orders. This guide should help you understand the nuances of different types of inventory management, so you can do it right from the start.

Inventory Management

Simply put, inventory management is having the right stock at the right time and place – but there is hardly anything simple about how to accomplish this feat or how your business can benefit from proper execution. In truth, inventory management is one of the most complex responsibilities of supply chain management, an already convoluted field. Still, inventory management is undoubtedly worth the effort; an effective inventory management system keeps customers happy, costs low, and goods in sellable condition.

There are several methods for tracking your inventory, from manual counts and spreadsheets to high-tech tags and automated scanners. Generally, the smaller, cheaper methods are appropriate for startups that don’t have much inventory to manage, but as your business grows, you must be able to scale your system. If you don’t have the wherewithal to grapple with complicated calculations for economic order quantity, reorder points, and safety stock amounts, you should get comfortable with inventory management software.

Asset Management

You probably consider inventory to be those items you intend to sell, but in truth, inventory is an umbrella term covering nearly anything that adds value to your company. Thus, an important and often overlooked aspect of inventory management is asset inventory management. Following the pattern of inventory management’s definition, asset management can be defined as having the right durable goods at the right time and place, and like inventory management, it isn’t usually simple.

The key difference between inventory and asset management is this: Inventory consists of what you sell, and assets consist of what you own. Typically, asset management is focused on IT equipment, such as computers, servers, and software, but they also include machines, vehicles, furniture, and even important documents. The key to effective asset inventory management is asset tracking, which requires each item to have a unique identifier. Typically, this is a serial number or barcode, but more and more businesses are equipping themselves with near-field communication devices and adding radio frequency identification tags to their assets. This higher-tech asset tracking technique makes management nearly automatic, reducing costs in the long-term and improving efficiency dramatically.

There is obvious value in tracking your assets. For one, it reduces additional costs of repurchasing new equipment and tools; for another, it ensures quality of service and goods sold. Undoubtedly, the complexity of your asset tracking will increase over time, but it is vital to have at least some method of managing your assets from the beginning.

Order Management

Order management is having the right balance of incoming and outgoing inventory at the right time and place. Just some of the responsibilities of order management systems include:

  • Managing customer data, including purchase history and payment history
  • Verifying sufficient inventory to fill orders
  • Managing vendors, and comparing vendors for optimal quality and price
  • Making shipments, especially for online businesses

Essentially order management concerns everything to do with taking and filling orders. Before you start investing in order management tools, you should investigate your own order process, which is often called order to cash, or O2C. Likely, you will discover that after your customer makes a payment, the order travels through several departments – including sales, customer service, accounting, warehouse, and shipping, if not more – before it is fulfilled. Effective order management systems must be able to communicate with all these groups, retain important information, and execute the order in a timely manner. As a bonus, your order management software should integrate with your inventory and asset inventory systems to provide a comprehensive look at your inventory whenever you need it.


  1. Hi there! This article couldn’t be written any better! Looking through this post reminds me of my previous roommate! He continually kept preaching about this. I am going to forward this post to him. Pretty sure he’s going to have a very good read. Many thanks for sharing!

  2. Hi, tiffany the article was great and highly descriptive as inventory management has a lot of categories I would like to know the data entry outsourcing service will come in which category?

  3. 217611 782325Youre so cool! I dont suppose Ive read anything in this way before. So nice to uncover somebody with some original tips on this topic. realy appreciate starting this up. this outstanding internet site is something that is needed more than the internet, a person if we do originality. valuable function for bringing something new towards the internet! 812563

  4. 833712 523121I basically couldnt go away your web site before suggesting that I in fact enjoyed the standard info an individual provide on your visitors? Is gonna be back frequently in order to inspect new posts. 48068

  5. 745846 606608hello I was really impressed with the setup you used with this weblog. I use blogs my self so congrats. definatly adding to favorites. 534704

  6. Hello! I could have sworn I’ve visited this website before but after looking at a few of the
    posts I realized it’s new to me. Nonetheless,
    I’m definitely delighted I came across it and I’ll be book-marking
    it and checking back often!

  7. I’m not that much of a online reader to be honest but your blogs really nice,
    keep it up! I’ll go ahead and bookmark your website to come back later.

    Many thanks

  8. 874188 636597The Twitter application page will open. This is good if youve got some thousand followers, but as you get much more and far more the usefulness of this tool is downgraded. 598567

  9. 598297 477171Spot lets start on this write-up, I seriously believe this amazing internet site requirements much more consideration. Ill much more likely once again to read a terrific deal far more, many thanks that information. 474227

  10. Simply want to say your article is as amazing.
    The clarity in your post is simply excellent and i could
    assume you’re an expert on this subject. Fine with your permission let me to grab your feed to keep updated with forthcoming post.
    Thanks a million and please continue the gratifying work.

  11. Hi! I realize this is somewhat off-topic however I needed to ask.
    Does running a well-established website such as yours take a large
    amount of work? I am completely new to writing a blog but I do write in my diary every day.
    I’d like to start a blog so I can share my personal experience and views online.
    Please let me know if you have any kind of recommendations or tips
    for brand new aspiring bloggers. Thankyou!

  12. You could certainly see your enthusiasm within the article you write.
    The sector hopes for more passionate writers such as you who aren’t afraid to say how they believe.
    All the time follow your heart.

  13. Excellent post however I was wondering if you could write a litte more on this subject?
    I’d be very thankful if you could elaborate a little bit
    more. Thank you!

  14. 162557 3175Beneficial information and superb design you got here! I want to thank you for sharing your tips and putting the time into the stuff you publish! Excellent function! 752456

  15. Hello there! This is my 1st comment here so I just wanted to give a quick shout out and tell you I really enjoy reading through your articles. Can you recommend any other blogs/websites/forums that deal with the same subjects? Thanks for your time!

  16. I really wanted to compose a quick remark to thank you for those magnificent guides you are placing on this site. My time intensive internet look up has at the end of the day been paid with reasonable points to exchange with my classmates and friends. I ‘d mention that most of us website visitors are really lucky to be in a notable network with so many awesome individuals with good strategies. I feel really happy to have come across your site and look forward to really more fabulous times reading here. Thanks again for a lot of things.

  17. 254174 683517There will probably be several totally different portions about the LA Weight reduction eating strategy and one is genuinely crucial. Begin stage is your truly truly of these extra load. weight loss 69002

  18. I’m really enjoying the design and layout of your website. It’s a very easy on the eyes which makes it much more enjoyable for me to come here and visit more often. Did you hire out a developer to create your theme? Exceptional work!

  19. 662146 655314I dont think Ive seen all of the angles of this subject the way youve pointed them out. Youre a true star, a rock star man. Youve got so a lot to say and know so a lot about the topic that I believe you should just teach a class about it 476545


Please enter your comment!
Please enter your name here