Balancing the right amount of inventory is a tricky endeavor that good companies excel at and disorganized companies fail. Inventory tracking requires a certain amount of visibility of the product, both what is coming in and when it is expected to go out. Problems can arise at both ends of the spectrum. Too little inventory and the company is unable to meet demands. Too much, and there is a very good chance that the business will lose money when there is not enough demand for the product.

So how does one negotiate the line between too little and too much inventory? By keeping accurate account of the flow of inventory and planning accordingly. Inventory tracking software may be the right choice for your warehouse if you carry a lot of items. Government software solutions may be a better choice if you work for that sector.

In one study by iBenchmarking Warehouse Performance, fewer than 30% of warehouses had an efficient system for inflow and outflow. In a privately owned business, this means you are losing money everyday, and worst still, the problem may be completely off your radar. It is said that for every $1 of product sold, U.S. retailers have about $1.43 remaining in the form of inventory. Too much inventory is created by not accurately anticipating demand.

For government inventory management, the problem is still a matter of losing money, but there is also a bigger problem that presents itself. The product may become obsolete. It is not the same as with a private company in which they can try to sell off extra inventory by deeply cutting prices. The product is fairly useless, whether by being replaced by a new model or by improper storage. Neither is an optimal condition to be in, but the good news is that this scenario can be avoided through efficient government software inventory tracking.

Many studies have indicated that when a warehouse begins to keep track of inventory by using government software that the cost of keeping inventory is reduced by about 27%. This comes about by balancing the flow of inventory. The problem of too little inventory and rushed ordering is minimized, as is the problem of too much sitting in a warehouse not being used and growing dusty.

When it comes to warehouses keeping accurate records, the potential for problems comes about through a lack of visibility and analyzation. Visibility is knowing how much product is sitting around, and what condition it is kept. Analyzation requires the warehouse personnel to interpret the rise and fall of demand, and anticipate trends accordingly. The right inventory tracking system is one way to accomplish this delicate balancing act.