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If you’re struggling to minimize inventory carrying costs or don’t have full control over your most important assets, you need a new approach to inventory and asset management.
The good news is that in 2023, this no longer involves custom-coded solutions and expensive hardware investments.
Things have changed with the advent of IoT (Internet of Things) and cloud-based inventory and asset management software. An efficient solution is possible and even affordable for companies of every size.
In this article, we’ll cover inventory and asset management benefits, best practices, and how to use modern software to marry the two efforts to keep your business operating at maximum efficiency around the clock.
Is asset management the same as inventory management?
While they’re both crucial business processes and have similar goals, asset management and inventory management are not the same.
Assets are the equipment you need to keep your business running, like manufacturing machines, lawnmowers, or data servers. Asset management is all about maximizing the value of that equipment — making sure it is where it should be, effectively maintained, and replaced when necessary.
Inventory, on the other hand, is the products you sell. So inventory management focuses on managing the stock of products you sell. It makes sure you’re never under or overstocked, maximizing warehouse space, and more.
While both are necessary for your customers to receive a high-quality product on time, they deal with different parts in the process. Inventory management is about getting finished products to the customer, and asset management is about keeping your business processes running smoothly so you can create and market those products effectively.
What is an example of asset inventory?
A physical asset inventory is simply an inventory of all business equipment — like the drills, hammers, and vans of a field service company. Another example is the office computers, scanners, and printers of a marketing agency.
There are also other types of asset inventories, like an intellectual property asset inventory — essentially a log of all your IP — and an IT asset inventory.
It’s a bit confusing, but asset inventory has nothing to do with inventory management. It falls under the asset management umbrella.
How an IT asset inventory is different from a fixed asset inventory
An IT asset inventory is unique in that it considers not just fixed assets — like computers, tablets, and routers — but also the software assets you use to keep your business running.
It’s similar to the concept of a “tech stack,” except the IT asset inventory isn't just about keeping an application running but every piece of hardware and software for your entire business.
Managing software used to mean keeping track of installed programs and software licenses. But SaaS and web apps changed that. They don’t exist as programs on your office computers but as web apps you can find in your web browser.
As a result, modern IT asset inventory management typically involves using both fixed asset inventory management software and a SaaS stack management tool.
If you only use a couple of SaaS apps, your physical assets should be the priority.
Benefits of effective inventory asset management
Setting up an effective system to manage inventory or current assets can seem daunting. But the benefits are significant and can transform how you run your business.
Let’s take a closer look at some of these benefits.
Improve the physical asset inventory review process
Using effective asset management software can speed up the physical asset inventory process by up to 70% — that’s what an internal review of RedBeam users has shown us.
It makes it more effective in many ways. Firstly, with asset location and checkout tracking, you have a real-time overview of where your assets are at any given point. That means there’s no more confusion as to whether an asset is lost, in another office, or currently in use by a team member.
Secondly, the actual inventory process is a lot easier. Your staff can simply go around scanning tagged assets (via bar or QR codes) without having to take physical or digital notes themselves.
Reduce or avoid stockouts and excess stock
Stockouts aren’t great for business. That’s just common sense. They directly lead to lost sales because a customer can’t purchase what they want. But you can also lose that entire transaction (including other items) as well.
Excess stock can cost your company a lot in warehousing fees (especially if it requires refrigeration). Effective inventory management helps you find the right balance based on accurate demand forecasting. It helps you see how much stock you need ahead of time.
Minimize employee theft and other asset loss
Internal theft has been a significant problem for businesses ever since a caveman invented the wheel. But it can be an especially tricky problem to manage as your organization grows. Why? There can be financial systems (accounts payable) in place that staff can exploit without proper asset management practices present.
For example, in 2022, Yale discovered that a single employee had exploited a system to purchase new equipment for students. Over nine years, she stole 40 million dollars in iPads, MacBooks, and other tech, which she resold to fill her own bank account and buy sports cars.
This horror story shows how damaging even a single employee can be without the right checks and balances in place.
Even a basic asset management program that only tracks product purchase dates makes this kind of exploitation impossible. Modern asset tracking software, which also tracks location, the last person to check out the asset, maintenance status, and other things, makes internal theft a non-issue. It also helps you keep critical assets in tip-top shape.
Obtain better visibility of supply chain and maintenance needs
Good inventory and asset management software helps you visualize what’s happening with your equipment and product stock in real time. That helps you improve the utilization of assets in your company and avoid stocking issues.
You can break down real-time data visually and set up automated notifications based on key metrics. So it’s much easier to spot crucial patterns like a stock starting to run out or multiple pieces of equipment running late on their maintenance schedule.
Maintain compliance with regulations
With complete and up-to-date records of your physical assets, it’s a lot easier to follow tax regulations like the IRS’s Tangible Property Regulations.
It helps you log maintenance costs effectively, which will help you deduct your taxes accurately. Essentially, pay less taxes while staying on the IRS’s good side. Sounds like a win-win to us.
Of course, a clear maintenance record also makes it easier to meet maintenance regulations and reduces the risk of unexpected breakdowns of equipment.
Gain more loyal customers
By delivering a more consistent experience to your customers, you'll encourage more of them to return to shop with your company again. A consistently good experience is the key to driving more loyal customers and product evangelists.
Finding the right software for inventory and asset management
But before you can take advantage of the benefits, you need to get the right system in place. In 2023, that means finding the right combination of software to make your life a lot easier.
To help you make a sound decision for your company and use case, we’ll share our must-have features for each type of software.
Asset management software: must-have features
Here are a few key features that any self-respecting asset management software should have:
- Asset tagging and scanning: If you have to manually go through a database when doing an inventory, you’re missing half the benefits. You need the ability to print asset tags and scan them effectively.
- Support for enterprise mobile devices: Preferably with a robust handheld device like the Zebra TC52 with scanning and tagging capabilities.
- Store and forward: This feature gives you the ability to still use the software in locations (like an equipment warehouse) with poor wireless network connections. It'll upload the changes your staff makes as soon as they connect again.
- Checkout tracking: Know exactly where each asset is and which employee last used it (or is still using it).
- Detailed history: This allows you to track maintenance history and pinpoint exactly where something happened to an asset.
- Locations: Categorize physical locations like warehouses and offices to make it easy to find assets.
- REST API: Perfect for integrating with your ERP so relevant managers can get easy access to the data.
This combination of features makes it easy not just for your employees to tag and scan but for your managers to get the insights they need.
There are plenty of asset management tools on the market, but only a few of them offer all of the features listed above (RedBeam being one of them).
Inventory management software: must-have features
In an inventory management platform, you want features that make it easier to match your stock levels to fluctuating demand.
- RFID tags: RFID goes beyond the typical bar tag for your SKUs (stock-keeping units). It also empowers location tracking, making both your warehousing and fulfillment processes more efficient.
- Crystal-clear data visualization: You can’t make important restocking (or product-cutting) decisions without access to the right data.
- AI-powered demand forecasting: Machine learning models use more than just historical data. With them, you can adapt your stock levels based on factors beyond just seasonality.
- Reorder points and low stock alerts: Take some stress out of your managers’ lives by automating this process for products with reliable demand.
- Supplier and purchase management: Helps you maintain good supplier relationships and keep raw materials stocked.
There are other nice-to-haves (and even must-haves for specific use cases). But these five are unnegotiable if you want to deliver a positive customer experience.
How to maximize the impact of your new inventory and asset management process
Whether you’re onboarding new software for asset or inventory management (or both), we’ve outlined some best practices that will help you get the most out of them.
Make it easy for employees to adopt
If your system is hard to use, you risk that employees won’t start using the new system or that they’ll start using it incorrectly or inefficiently.
For example, if you try to use a QR-code-based system with a mobile app, and tell your staff to use their own cell phones, a lot of things can go wrong:
- The app may not be compatible with all models.
- QR codes can be tricky to scan with older smartphones, slowing down the process.
- Network connectivity issues can disrupt workers’ workflows.
If, instead, you use a reliable handheld device with a built-in scanner like the Zebra TC52, you make standardized adoption a lot easier.
For managers using the software, you also want to choose software that is intuitive and easy to use, where you don’t need to hire data scientists to mine data for insights.
Centralize your data
Don’t let individual offices and teams cause silos by working with different software. Unless your whole organization manages company assets with the same software, you can’t get a real-time overview that shows the complete picture.
The same goes for inventory management. By having access to data from all your warehouses, you can quickly adjust to shortages in one region. Let’s say unusually hot weather affects buying habits in California. You can then quickly ship more summer clothes from an Idaho warehouse.
Plan the whole lifecycle
Before you buy a new physical asset, you should have a clear idea of its entire lifecycle.
Here are a few questions you can ask yourself that can help you map out the journey.
- Who is the best vendor in terms of post-purchase support and onboarding?
- How often does it need to be maintained, and when will we schedule it?
- What will our repurchase timing be?
- Does it have resale or scrap value when replaced?
Make sure you cover all your bases through every major stage. Map it all out from pre-purchase selection to maintenance, potential re-selling, and purchasing replacement assets.
Adapt your approach based on relevant data
Whether you're reworking your asset or inventory management, informed decisions are the only path forward.
Routinely check — once a quarter, for example — for ways you can improve your current processes in the data. For example, you might do an analysis and find more asset breakdowns or stockouts than you’d like.
Look at the actions and processes that led to these failures, and adapt your approach going forward.
It sounds simple in theory. But it requires hard work to pull off. Efficiency is won an inch at a time.
Take back control of your assets with RedBeam
Say goodbye to risks like internal theft, asset loss due to misplacement, inefficient usage, or duplicate purchases with RedBeam.
Must-have features like a dedicated app for the Zebra TC52, expanded history, offline mode, and unlimited locations set RedBeam apart. With it, you can easily keep track of your fixed assets and get the absolute most out of them.
Plus, you get all of this with the top-of-the-line data security of Google Cloud and role-based user security.
If you’d like to see just how much easier it could be to manage crucial assets in your company, sign up for a free trial today.
