Evaluating Your Inventory System

Whether you are a new business or have been in business for years, it’s never a bad time to take a step back and evaluate your inventory system. Do remember that there is no such thing as a “perfect” inventory system and there are always areas in which you can make improvements or do things differently. However, there are elements that need to be in place for a “good” inventory system.

The elements of a good inventory system include:

• An organized placement for items

• Inventory labels that are easy to read that clearly mark the location of items

• Unique, short item numbers

• Units of measure

• Software for tracking your inventory

• Policies regarding the receiving and rotation of inventory

Regarding the labeling of your shelves, it’s extremely important that every location where something COULD be placed be given a name and a label. Even if you don’t have anything to place there now, your inventory will likely expand down the road and you may find yourself placing something there.

Your inventory labels should be:

• Durable and use a permanent adhesive  (you don’t want to use magnets or removable labels that can be easily moved and could fall off over time)

• Easy to read, preferably from a distance

• Colorful (this will help them to be more easily recognized across the room – consider implementing a color system into your inventory system to help employees quickly recognize where items should be placed, even from a distance)