Inventory tracking is the process of monitoring the movement of products as they are purchased, stored, and sold. It allows businesses to know which products are popular and need reordering, and is important for managing spending on inventory. While inventory was once tracked manually, technology now allows for automated tracking using barcodes, RFID tags, or other electronic methods when items move. This electronic tracking reduces errors compared to manual methods.

2. • Tracking inventory is the process of tracking how much of each
individual product a business is buying and storing for resale
purposes, and how much of each of those products are being sold.
• Inventory tracking is important because it lets a business built on the
sale of goods know which products are selling and which are not.
• It also lets the business know when to re-order a particular item
before running out of it.
• The reason inventory tracking receives so much attention from
companies of all sizes can be summed up in one word: money.
• Companies spend an enormous amount of money on inventory and
most want to know exactly where that inventory resides at any given
time.

3. Manual vs. Automated Tracking
• Inventory tracking consists of the systems and policies designed to monitor the movement of
inventory.
• Many years ago, companies tracked inventory manually with a system known as the card
system or cardex. Every time inventory was purchased or sold, the quantity was manually
written on that item’s card and a new on-hand amount totaled.
• Today, some companies still use a type of manual entry system to record inventory
transactions, except the entries get recorded in a spreadsheet program rather than on a
paper card.
• Technology has made vast improvements in the way inventory gets tracked.
• Many companies have a completely automated inventory tracking workflow. Whenever a
movement of inventory occurs, the inventory management system receives an automatic
update of the transaction.
• This eliminates a lot of the human error caused by manually tracking inventory.

4. Universal Product Code (UPC)
• The bar code or Universal Product Code (UPC) serves as the most
common inventory tracking method.
• Designed for use in the retail environment, the standard bar code
allows retailers to track inventory through point-of-sale (POS)
equipment. Often, specific industries use specific types of bar codes.
• For example, the GS1DataMatrix bar code gets used primarily in the
health care industry. Various scanning technologies exist for the
company that uses bar codes to track its inventory.
• A scanning bar code gun is one. But today, companies can use devices
such as Palm Pilots and wireless handheld scanners as well.

5. How to get a UPC Barcode?
• GS1 – the Global Standards Organization (formerly
known as the Uniform Code Council).
• The GS1, a global standards organization,
guarantees the every product, asset, service or
location will be uniquely identified, virtually
worldwide.
• Simply click on “Get a GS1 Barcode” and it will
locate a GS1 office to assist you.

6. Radio Frequency Identification (RFID)
• Companies that use radio frequency identification (RFID) technology to track inventory
choose from passive or active RFID systems.
• Both types of RFID technology can track inventory, but each technology works best when
employed for specific tracking needs.
• Passive RFID technology works best in an environment that uses handheld RFID scanners, or
fixed scanners.
• Active RFID technology works best with fixed readers to monitor real-time asset movement
or where security issues exist.
• A number of differences separate RFID technology from bar code technology, including the
ability to scan more than one unit at a time, it does not require line-of-site between tags and
readers and most fixed RFID readers do not require human intervention to work.

7. Common Problems with RFID
Some common problems with RFID are reader collision and
tag collision.
Reader collision occurs when the signals from two or more
readers overlap. The tag is unable to respond to simultaneous
queries. Systems must be carefully set up to avoid this
problem.
Tag collision occurs when many tags are present in a small
area; but since the read time is very fast, it is easier for
vendors to develop systems that ensure that tags respond
one at a time.

8. Tag System
• Many small retailers use a tag system to track inventory.
Merchandise gets tagged daily, weekly, monthly or at any
other required interval.
• At the point-of-sale, the retailer removes the tag. The
collected tags get crosschecked against the physical
inventory to determine sales quantities.
• This method only tracks movement based on sales. Stores
that do not use bar codes and point-of-sale systems often
use this type of tracking system.