It’s never a bad time to revisit the “Inventory Management 101” terms that are sometimes overlooked for being too basic; or worse, are misunderstood because of varying terminology used in different industries. Alternatively, if you are researching inventory management software or asset tracking system with minimal experience in the subject matter, it’s helpful to start by learning the essential terminology. After reading these definitions you should be able to identify what types of items you have without a doubt, and get a sense of how you want to track them.
Stock Inventory (for Inventory Management Software)
Stock inventory includes the raw materials and work-in-process goods that are consumed in production of finished goods, as well as the finished goods that are sold to customers. Some companies monitor stock inventory quantities daily, because these items need to be replenished and made readily available for use or sale.
Typically, stock inventory is stored in a warehouse or storage area and tracked by quantity, as well as a common stock keeping unit (SKU), which identifies each product by distinct attributes (e.g. color, size, brand). Batch or lot numbers are used to control various stock inventory items, such as food or medications, so they can be tracked in groups based on expiration dates. In addition, stock inventory items such as parts and components can be tracked by serial number.
Assets (for Asset Tracking Systems)
Assets can also be known as fixed or capital assets, and typically refer to an organization’s equipment, computer hardware, networking devices, tools and the like. These items have long-term business use and enable their owner to produce goods or perform services; they are not consumed in production. Because the word “asset” has a different meaning in the world of finance and accounting, the phrase “asset tracking,” is used to indicate the monitoring of physical asset movement, not the change in monetary value of an intangible financial asset.
Systematically tracking assets is necessary across every industry in order to maintain accurate accounting records, as well as real-time visibility of operations. For tracking purposes, each asset is tagged with a unique barcode identifier (e.g. make, model, serial number, etc.).