Retail inventory moves across a wide range of channels before reaching the consumer. To run a business without spending much beyond your budget, you must first thoroughly acquaint yourself with the four most common types of inventory along with the stages they usually have to pass through.
Raw materials, WIP or Work In Progress, Finished Goods, and MRO or Maintenance Repair & Overhaul are what every retail business has. When you the type of inventory you own, you can arrive at much better financial decisions for the supply chain. That includes selecting excellent inventory management software as well.
- Raw Materials
The experts offering quality yet affordable inventory RFID system said raw materials turn into finished goods after they manage to endure a series of procedures. For example, leather to make belts, bags, sports equipment, footwear, furniture, etc. is a raw material. Or if you deliver artificial flowers to the interior design industry, the cotton used to make those flowers will be considered as a raw material.
- WIP or Work In Progress
The inventory that is still being worked on is called WIP. When perceived in terms of money, WIP includes labor, raw materials, and overhead costs. Think of the items under this particular category as a part of the bigger picture or end product. If you sell medications, the packaging is seen as WIP. This is because medications cannot be delivered to a consumer until it is stored in the correct packaging. It is work in progress.
- Finished Goods
Finished goods are inventory that you have listed for sale on the website. Anything that is ready to be sold to the consumers fall under this category.
- MRO or Maintenance Repair & Overhaul
The MRO inventory is about the smaller details. The items are used for assembling and selling the finished product but not for building the product itself. For example, gloves that you wear when you are handling the manufacture of a product are MRO. Office supplies such as paper, highlighters, pencils, pens, etc. are also worth-mentioning.
Depending on the specifics of the business, the aforementioned types of inventory may be in storage, with a supplier, or out for delivery.
How Inventory Management Software is Beneficial?
Tracking huge amounts of inventory can be difficult, especially if all your products are kept in the same place. Using outdated methods like spreadsheet does not help. You have to invest in right software.
RFID warehouse management system acquired extensive popularity. It reveals exactly how much product is left in the stock, and alerts you in case you need to place orders. It also simplifies the way you monitor which stage the inventories are currently in. Customizable features make it all the more intuitive.
When purchasing RFID (radio frequency identification), please make sure to rely on a genuine provider in your locality – someone who assures quality along with affordability. Carry out a comprehensive background check. Other not so beneficial items still used by retail owners are QR codes and barcode system.