Inventory segmentation can help increase efficiency. Although getting started may be challenging, automated inventory management software can make it easier. But, how does segmentation help with efficient inventory tracking?

Why is Inventory Tracking Important?

For any business, inventory tracking is vital. Small businesses need efficient inventory management software to ensure they are spending their funds correctly. It helps you maintain sales, reduces the chances of theft, and makes re-ordering a breeze. 

Unfortunately, keeping track of inventory for businesses is an arduous task. No matter how big or small the business may be, it is challenging to keep track of the various products coming in and out of the warehouse, making manual inventory tracking prone to errors. Hence, there is a need to make the process more efficient and less time-consuming.

What is Inventory Segmentation?

It doesn’t matter whether you have a large catalog or a small one; inventory segmentation can be an efficient management framework for your business. Those who understand that specific items require specific management techniques opt for inventory segmentation. It involves:

• Segmenting the inventory based on the frequency of movement, holding value, or product usage
• Applying specific policies for each segment, such as reviewing obsolete inventory or handling special items

What Are Some Segmentation Techniques?

Unlike manual segmentation, with automated inventory management software, segmenting is easy. Automated programs can leverage supplier data to sort products, saving your time and energy.

Segmentation by Brands 

Segmenting by the brand is helpful when you’re trying to understand which brands are widely used by your business. You can easily understand whether your company is dependent on a few brands or whether you have a diverse inventory. Not only does this help you compare the performance of different brands, but it also aids in maintaining optimal stock for important brands.

Custom Segmentation 

An automated inventory management system makes custom segmentation a breeze. For many businesses, custom segmentation is vital to manage and track products according to company-specific categories. It is also helpful for products related to contests, giveaways, and more. 

General Segmentation 

To get a better overview of your stock, general segmentation may be beneficial. You can sort your inventory by brand, product type, or parent products. It helps you identify whether you have excess stock in some areas and which areas need to be fixed. Overall, it helps you identify your strengths and weaknesses.

Does Segmentation Help?

When used effectively, product segmentation can be highly beneficial. It provides a comprehensive inventory analysis, which helps you keep track of your annual, quarterly, monthly, and weekly inventory. Leveraging insights from automated inventory management software, you can plan your inventory efficiently, whether for the next month or the next year.

Segmenting your products helps you gain valuable insights rather than generic information about your inventory. You can keep track of the usage and availability of various products with ease. However, it is essential to note that tracking product segmentation manually can present multiple challenges and is prone to errors.

With efficient inventory management, it is easier to ensure that other business processes are running smoothly. With manual inventory being prone to errors and inefficiency, businesses should consider automated inventory management software.