Inventory management keeps track of the movement of stock that a company stores and warehouses. Asset inventory management is the process of tracking the equipment and supplies that a company uses to run its operations. It covers fixed assets such as equipment and property as well as intangible assets like intellectual property.

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Simply put, inventory and asset management both keep track of a company’s assets. Inventory management, however, involves monitoring the flow of items for sale or needed for the manufacturing of goods.

One of the objectives of inventory management is to identify the proper stock balance to meet consumer demand or, in the case of manufacturing, to supply production lines. In contrast, asset management keeps track of the inventory that is used internally and is not for sale. Asset management also involves assuring the value and availability of assets.

What this article covers:

• Where Do Assets and Inventory Management Overlap?
• Asset Inventory Management vs. Inventory Management
  • Similarities
  • Differences
• Benefits
  • Inventory Management
  • Asset Inventory Management
• Technologies Used
  • Inventory Management
  • Asset Inventory Management
• Key Features
  • Inventory Management System
  • Asset Inventory Management System
• Conclusion

Where do Assets and Inventory Management Overlap?

Asset inventory management solutions help businesses save money while improving production and service. Inventory management systems are used by manufacturing divisions to aid in the manufacture of goods. Inventory is considered an asset since an organization invests money in it, which it then sells for profit.

Asset management and inventory management are often used interchangeably. While there are some minute similarities between them, there are certain stark differences between them as well.

Let’s take a look at some commonalities and differences between them in the next sections.

Asset Inventory Management vs. Inventory Management

Similarities

Albeit inventory and assets serve different objectives, their goals and techniques are comparable. Inventory and asset management both:

• Assess and assure accurate stock needs to meet customer demands.
• Ensure proper availability of equipment and resources for smooth operations.
• Prevent human counting errors.
• Reduce asset spoilage or loss due to misplacement.
• Monitor maintenance and performance of assets to determine repair and replacement needs.
• Lower costs.
• Use serial numbers to track inventory or asset life cycles.

Differences

Inventory management keeps track of when a corporation buys, sells or consumes parts, products and supplies. Asset inventory management examines how a corporation makes use of items it owns and doesn’t plan to sell.

Asset management necessitates the maintenance of equipment, whereas inventory management does not require maintaining stock.

Computers, furniture and equipment are among the items tracked in asset management. Inventory management tracks items such as products, spare parts, supplies, etc.

Assets in asset management require inspection, cleaning or filling activities before they may be used again. In inventory management, there is little work per item, so it is ready for sale right away.

Primary Benefits

Inventory Management

Some of the primary benefits of inventory management are:

Decreasing Costs and Increasing Profits

Inventory and stock management can help you save money and improve your profit margin. Data analytics crunch expenses and purchase information to avoid unnecessary expenses. You can monitor essential inventory management KPIs that keep inventory at optimum levels and enable smooth business operations. You can forecast the demand and supply of products according to seasons or sales volume.

Save Expenses

With the help of an inventory management system, you can avoid deadstock and overstock issues. It offers accurate insights into the best-selling and low-selling products. In addition, inventory management also provides real-time stock updates and replenishment alerts so you can purchase more stock only when you need it. Inefficient inventory management can result in revenue loss and overspending.

Better Relationship With Vendors and Suppliers

Inventory management indicates which products sell and in what quantities. It also requires businesses to keep updated records of orders and purchases from vendors and suppliers. You can use this knowledge to bargain with suppliers for better rates and terms. Accurate vendor management also leads to streamlined communication between vendors and suppliers, resulting in better business relationships.

Better Management of Product Recall Situations

Inventory management allows a company to identify which products are affected quickly, offer tracking information, communicate with consumers and suppliers and provide transparency to regulatory organizations for compliance verification.

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Asset Inventory Management

The main advantages of asset management are:

Save Maintenance Costs

Bad asset management not only results in excessive maintenance costs but also reduces the asset’s life span. A business may face many maintenance challenges during the operating stage of an asset’s life cycle. Maintenance issues can reduce the organization’s benefits. Asset management also entails scheduling timely maintenance tasks and setting up alerts for you.

Reports and Analytics

An inventory asset management system provides in-depth analytics and reports that give you a better understanding of all of your company’s assets. It enables an organization to improve performance by swiftly detecting and resolving problems.

Operational Efficiency and Real-Time Asset Tracking

Asset inventory management notifies you when an asset has been lost or stolen, when it needs repairs or when it’s time for an audit. It generates thorough and accurate audit reports.

Assets are like the living organisms in the business; they come and go and multiply. Assets are always moving around. An asset management solution tracks assets in real time, making it easier to locate and manage them.

Increase Customer Value

A report by Media Bain states that a 5% increase in customer retention results in a 25%–95% increase in business. When customers are happy with your organization, they are more likely to continue buying from you.

Customer loyalty has less to do with the product or service and more to do with the experience that comes with using that product or service. A spike in customer value benefits the business, while asset management contributes to a better customer experience.

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Technologies Used

Inventory Management

Inventory management systems offer accurate stock levels and track the movement of inventory from the warehouse to the distribution center and finally to the customer’s hands. Several types of tracking are available for businesses that profit only from inventory sales.

Warehouse Management System

A warehouse management system might be very different. It merely means that a business has established some type of inventory tracking, however rudimentary it may be.

Employees use warehouse management systems to keep track of receiving, shipping and picking. Smaller organizations may deploy in-house warehouse management software. They are primarily concerned with monitoring supply chain activity.

Light Fidelity (LiFi)

LiFi is designed to connect wirelessly within a single indoor space.

It involves the use of light, mainly LED bulbs, to transmit data over short distances. It’s particularly beneficial in areas with a lot of drones, robotic equipment and automated systems.

Barcodes

Barcodes, which are read with a handheld scanner, have been around for decades and are one of the oldest, cheapest and most reliable inventory management tools available.

Barcodes are particularly effective when a company has a large amount of stock and inventory on hand. They assist in tracking which items are moving when and offer stock level information regularly.

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Asset Inventory Management

Technologies for asset management are generally more advanced than technologies for inventory management. Some of them rely on Bluetooth or satellite systems since they require instant connectivity and real-time tracking.

QR Codes

QR codes, unlike barcode scanners, can be scanned with any smartphone or tablet and store far more information. Operators can access manuals, schematics and asset maintenance history instead of just tracking inventory data.

GPS

Global positioning satellites allow products to be tracked from one location to another over long distances. This is important for cars, commodities in a long-distance supply chain or fieldwork assets.

Cloud Data Storage

The ability to store and archive data on the cloud decreases storage costs while also providing real-time information across time zones and geographical locations.
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Key Features

Inventory Management System

An inventory management system has different features, depending on the nature and size of your business. This is a list of some standard features that you should look for when opting for an inventory management solution.

1. Inventory Tracking

Inventory management systems can integrate with barcode scanners and RFID tags to track inventory movement in real time. Barcodes improve inventory control and keep product details and quantities updated. RFID offers precise updates about the products’ locations while in transit.

2. Reporting Tools

A good inventory management solution should integrate with various reporting and analytics tools to crunch real-time updates about stock, product status, order status and shipment.

Optimized reporting facilitates smooth communication between buyers, suppliers and businesses. It enhances productivity and reduces the possibility of human error.

3. Demand Forecasting

Inventory forecasting identifies which products are low in stock and those that are abundant. They help uncover the fastest- and slowest-selling items across product categories. These insights allow businesses to improve customer experience by keeping “favorite” items easily available and offering less popular items in bundles or at discounts.

Forecasting also optimizes stock replenishment since you know what, when and how much to purchase.

4. Returns Management

Returns occur when a product is purchased, delivered and then returned by the customer for various reasons. An efficient inventory management system helps in creating, confirming or canceling returns. It can assign the return to the nearest warehouse. Moreover, it decides whether the item should be returned or replaced based on certain pre-defined criteria.

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Asset Inventory Management System

Selecting the right asset management system is critical for your organization. However, not all asset inventory systems are the same. Here are some essential features that are a must-have in an asset management platform.

1. Maintenance Planning

Asset management software tracks and manages assets efficiently by maintaining them. They help operators schedule timely maintenance activities to keep company assets in top shape at all times.

Asset management systems should have functionalities to include maintenance planning, assigning jobs to workers and tracking field workers to help them update the status of jobs in real time.

2. Life Cycle Management

Full life cycle management provides a comprehensive picture of your assets at all times, allowing you to make proactive decisions about their maintenance. An asset management software should have features to track company assets throughout their entire life cycle, from acquisition to disposal.

3. Workload Distribution

Field personnel or volunteers are frequently assigned asset maintenance tasks by facility managers. Manual job distribution can be difficult and time-consuming.

A good asset maintenance program allows employees to distribute jobs seamlessly across field personnel or volunteers, saving plenty of time and effort.

4. Asset Tracking

Asset management is incomplete without asset tracking. Asset tracking allows businesses to make timely choices and save excessive repair and replacement costs. The best asset management software allows you to track assets in real time so you stay updated about their location and condition.

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Conclusion

Asset inventory management vs. inventory management has been a debatable issue for many years in the industry.

Assets and inventory have marked distinctions; thus, asset and inventory management are also very different. While some of their characteristics and requirements are similar to one another, understanding the differences allows for better control over both.

We hope this article was able to make the distinctions clear for you. Do you think we missed any? If we did, do let us know in the comments!