Chances are your business relies on more than a few consumables to keep daily operations running smoothly. This particular kind of inventory is essential to your company’s productivity and profitability. And, as such, keeping these items in stock couldn’t be more important.
In this article, we’ll dive into the basics of consumable inventory management, and provide simple steps for how to keep track of consumables for your growing business.
What is consumable inventory?
Consumable inventory refers to “everyday” items with short lifespans your business uses to fulfill daily operations. Consumables are the raw materials or items required to develop or create products or help provide services customers pay for. As the name suggests, these items are designed to be “consumed” or used up.
In inventory management, there’s a strong emphasis on tracking product inventory—that is, inventory that will be sold to customers. But tracking the consumables you use along the way to create products or provide services is also key, since it too directly impacts your profitability.
Consumable inventory example
Consumable inventory varies from industry to industry. In an office setting, consumables might be highlighters, printer paper, and sticky notes. In a construction company, consumables could be nails, screws, and lumber. Consumable inventory also includes items like unspoiled food and drink, fuel, and even cleaning supplies.
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How to keep track of consumables
If you want to practice consumable inventory management, you’ll need to learn how to track your consumable inventory in a sustainable, efficient way. These five steps are a great starting-off point, although you’ll want to customize your approach to meet your company’s unique needs.
1. Create a list of consumables your business uses
The first step to tracking your consumables properly is simple but not easy: make a list of every last consumable your company needs. You can do this using a simple sheet of paper or a spreadsheet, or you can get to work right in an inventory management app. Remember, you can always bulk upload data from a spreadsheet into an inventory app like Sortly once you’re ready.
Do keep in mind that not all inventory management systems are created equal. Selecting a system that offers barcode and QR code scanning from the start can help you stay organized and save time from day one.
Still, no matter how you decide to track your consumables, your inventory list should detail everything you need to know about your consumables, including:
- Item name
- Item description
- Item value
- Minimum quantity on hand
- Current quantity on hand
- Purchase price
- Barcode or QR Code, if supported
- High-resolution photos, if supported
2. Develop a perpetual inventory system
Unlike a physical inventory system, a perpetual inventory system is always up to date and accurate. Every single time an item is consumed, moved, or added to your physical inventory, your business will update your inventory management system. This offers you real-time insights into what consumables your business has on hand.
While keeping perpetual inventory might seem like a lot more work than simply counting inventory from time to time, there are tons of benefits to tracking inventory in real time, including:
- Always knowing exactly how much of an item you have
- Understanding precisely when you’ll need to reorder inventory—and how much to purchase
- Making it easy to move items from one location ahead of time
Plus, a perpetual inventory system streamlines communication between employees, especially if you stock consumables across multiple locations or have an accounting team that relies on inventory records to complete important tasks.
While perpetual inventory is important for many businesses, it’s even more crucial for companies that stock a lot of consumables. That’s because consumables tend to be used up quickly, and these everyday items can cause serious slowdowns or work stoppages if they’re not readily available.
3. Give your employees the tools they need to succeed
To practice airtight consumable inventory management, you’ll need to set your team up for success. And that starts with offering them the training, resources, and equipment they’ll need to track inventory properly.
Fortunately, this doesn’t need to be tedious or expensive. If you want to practice perpetual inventory, simply choose a software solution that doesn’t require a ton of training or equipment. For example, with Sortly, all you need to track inventory, scan barcodes and QR codes, and check items in and out is a smartphone or tablet. Plus, the software is intuitive—which helps keep training and onboarding short and sweet.
But even if you decide to stick with pen-and-paper inventory or a consumable tracking spreadsheet, you’ll still need to carve out time to train your employees. Regardless of what inventory management system you select, make time to create a straightforward standard operating procedure. Ensure that your SOP is realistic and sustainable, and that your whole team is clear on how and when to take inventory.
4. Align your tracking system with your reordering system
To practice accurate, useful consumable inventory management, you’ll want to ensure your reordering procedure aligns with your consumable tracking system. To do this, you’ll want to calculate key formulas that determine when you should reorder consumables and exactly how much you need to keep on hand.
You’ll want to solve for:
You can use this information to solidify reordering procedures, carefully select new suppliers, and confidently place complete orders. Plus, if you’re using an inventory app like Sortly, these details can help you customize low stock alerts and reordering reminders.
Accurate, thorough reordering is especially essential in consumable inventory management, as inventory turnover rates for consumables tend to be quite high. You’ll need to keep your key consumables in stock, otherwise you’ll either have to purchase items at a higher price elsewhere—or risk a stockout.
5. Conduct audits annually—if not more frequently
Even if your business is practicing near-perfect perpetual inventory, you’ll still want to schedule a full-scale inventory audit of all consumables each year, if not more frequently. That’s because physical inventory counts are the only way to ensure your actual inventory matches your recorded inventory.
In a perfect world, your audit results will match your inventory list perfectly. But if it doesn’t, you’ll want to search for answers to explain inventory shrinkage—whether that’s theft, spoilage, obsolescence, or an organization system that just isn’t being followed properly.
And remember, your consumable inventory management system should be flexible—adapt it as your business changes.
Experience the simplest inventory management software.
Sortly is a top-rated inventory management solution perfect for businesses that need to track consumables carefully. Whether you’re a small business with one location or an enterprise with locations across the country, Sortly can help your whole team contribute to more efficient, more effective inventory management.
And with features like barcode and QR code scanning, customizable reports, and low stock alerts, Sortly can help you focus less on inventory and more on running your business.
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