For retailers, effective inventory management can make all the difference in retaining greater control over your operations and supply chain visibility. Having the ability to know when your products are running low or are failing to pique the interests of customers is vital.
It’s for this reason that the choice between utilizing a serialized or non-serialized inventory can carry significant ramifications on your operational efficiency.
But what are the main differences between the two inventory management approaches? And which would be best for your business? Let’s take a deeper look at the respective pros and cons of serialized and non-serialized inventory to assess which is right for you:
What is a Serialized Inventory?
Serialized inventories are distinguishable by their serial units, each of which will possess a unique identifier or barcode.
These serial numbers will be intrinsically linked to one asset that holds key information such as the type, manufacturer, distributor, usage, and maintenance history of the product.
Additionally, serialized products have a separate inventory movement for the total amount ordered, and this means that each item can be scanned individually, allowing you to ship and pack each item accordingly.
What is a Non-Serialized Inventory?
Non-serialized inventory, on the other hand, is inventory that doesn’t possess serial numbers or individually barcoded units assigned to them. This means that items are more interchangeable based on alternative factors such as type or value.
While serialized orders can be identified by their unique barcodes and other assigned identifiers, non-serialized inventory is more likely to be measured by weight, height, or order number.
Although non-serialized inventory can lack automation integrations, traditional availability checks can be used to acknowledge the delivery of items without having to go to the effort of registering unique identification for each delivered unit.
Pros and Cons of Serialized Inventory
There are many pros and cons of using serialized inventory. One of the biggest advantages this strategy offers is product ownership verification, which can provide comprehensive visibility over a product’s purchase history and ownership. For retailers that offer seamless returns policies, serialized products can help to bring efficiency to complaints procedures by verifying that the item came from your store.
Similarly, serialized items can help with inventory tracking, which allows retailers to know where a product is located and its status. This can help warehouse staff to quickly fulfil orders.
For stores in competitive industries, serialized inventory can also help to bring more functionality to discounting by monitoring how long a product has been left on store shelves and whether a special offer is needed.
Serialized items can also integrate well with point-of-sale (POS) systems to accurately manage barcodes and anticipate periods of high demand based on emerging sales performance trends.
Despite this, there are some major drawbacks to serialized inventory. The most challenging issue related to the use of a serialized inventory is the cost, which can be forced higher by the necessity of coordinating with all other businesses throughout the supply chain.
There could also be an abundance of data to manage which may force more retailers to adopt automated systems to keep track of.
Pros and Cons of Non-Serialized Inventory
On the other hand, non-serialized inventory is far easier to keep on top of, and retailers can enjoy the relative simplicity of manual counting or consulting against a physical spreadsheet.
For small businesses that aren’t likely to draw significant volumes of inventory across a vast number of suppliers, non-serialized inventory can serve as a much cheaper alternative that won’t put you at a disadvantage.
However, if your business has ambitions for growth and expansion into new markets, the simplicity of non-serialized inventory could be a drawback, as warehouse operatives struggle to keep up with stock, and deliveries, and trace quality control issues to source.
Which is Better for My Business?
So, which works best for you? Serialized or non-serialized inventory? The answer usually lies in the product that you’re carrying in your inventory.
If your inventory consists of more expensive items, it makes more sense to invest more in the tracking of your products. The risks associated with issues for expensive products can impact the bottom line of retailers in a significant way, meaning that serialized stock can serve as a form of insurance.
However, if you’re a smaller retailer or predominantly stock products that are relatively low-cost, the added prices associated with serializing may be superfluous. This, and the added time it would take to train staff and align your supply chain may not be worth the effort.
Focus on Your Aspirations
Remember to keep the future in mind when deciding between using serialized and non-serialized inventory. While a non-serialized approach could work today, would it stand up to the test of a more diversified range of products or a more premium pivot in the future?
By keeping in mind your potential for change tomorrow, you can identify the most sustainable solution for your needs today.
Getting your stock right is a key facet of futureproofing your business. With technology continuing to evolve to provide greater inventory control than ever before, it may be the perfect time to embrace serialized inventory management.
