Inventory Management: What do I have?

The first question that an inventory management system (sometimes known as a warehouse management system or WMS) has to answer is:

What inventory do I have?

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Answering what inventory do I have is made up of a few pieces of information:

1. What is the list of parts that I am tracking
2. Where are the physical locations of these parts
3. How much of each part do I have

​What is the list of parts that I am tracking

When listing out the parts that you are tracking, most companies need to maintain 2 lists of part numbers: the part numbers they purchase from vendors and their own internal part number. For example, if we’re running a coffee shop we may purchase mugs from several different places. However, for our internal tracking, we may consider all mugs the same.

Vendor Part Numbers:

Amazon 8oz Mug

Amazon 12oz Mug

Walmart 8oz Mug

Walmart 12oz Mug

Internal Part Numbers

8oz Mug

12oz Mug

When we receive inventory we need to automatically add in inventory that matches our internal part numbers.

Where are the physical locations of these parts

This is where we want to track physical locations. Most companies will only need to track their internal locations, i.e. where in the warehouse their parts are located. Rule of thumb is to start simple, usually with a single location for your warehouse. As it expands, and you keep more parts in house, you’ll want to expand sub locations - such as Shelf A, Shelf B, etc…

If you are tracking information from 3PLs (3rd party logistic platforms) it is recommended you combine their daily reports into your inventory system. This will give you the ability to see where all of your parts are in a single glance.

How much of each part do I have

The two important pieces of tracking your quantity of parts are unit of measure and lot/serial number tracking. Units of measure are extremely important to maintain a clean record of, as you will need to convert different units of measure as your company scales. You may buy lbs of coffee beans, but only use ounces to measure the beans you use. You’ll want to keep these measures separate to keep an accurate history and tracking of what your usage is.

Secondly, if you track lot or serial numbers you’ll need to maintain an accurate record of these. Lot and serial numbers help you track information about a certain instance of an inventory quantity you received. Let's say you received 2lbs of Kirkland coffee beans on Monday and 1lb of Kirkland coffee beans on Friday. Your inventory warehouse may show 3lbs of Kirkland coffee beans, but that wouldn’t tell you the age of each lb. Since coffee beans have a shelf life, we need to track the oldest beans we’ve received, so we can use them first.

Enter lots - when we receive coffee beans we can assign a number, lets say B0001, to the receipt. This lot number stores additional information, in this case the day it was received. In this example our store room wouldn’t showcase 3lbs of Kirkland coffee beans, it would show:

2lb - Kirkland Coffee - B0001

1lb - Kirkland Coffee - B0002

We can now run an analysis of how many total lbs of coffee we have (3lbs) while determining which coffee bean lot we should use first.

In one of our future pieces we will discuss the next steps of inventory management: forecasting. Specifically answering the questions:

What inventory do I need in the next few weeks

What inventory do I need to buy

We completed a webinar covering these topics which you can view here.

Want to learn more about how Thruline can help with your inventory management? Reach out for a private consultation! We’re launching our self sign up environment in July where you can try out our offerings. Sign up ​for the waitlist and join our Discord Server where you can meet Thruline users and ask questions about the platform.

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