Why Manual Inventory Tracking Must Be Replaced with Automated Inventory Tracking?

Manual Vs. Automated Inventory Tracking

Inventory tracking is important for organizations, but several organizations ignore inventory tracking and as a result, they suffer from huge losses. That is why it is important to replace inventory tracking with automated inventory tracking. In this blog we will discuss what are the losses that occur due to manual inventory tracking and what are the benefits organizations can get with automated inventory tracking! So, let us get started!

What Is Inventory Tracking?

Inventory tracking is essential for all organizations. Inventory can be raw material, ready product, or some MRO (maintenance repair operation) part. So, every industry has one of these 3 names which means every organization has inventories.

What Is Manual Inventory Tracking & What Are the Advantages & Disadvantages of It?

In manual inventory tracking, inventory records are inaccurate because of human error, and inventories are tracked via a spreadsheet. Since they are accessed by multiple people chances of data corruption are increased.

The advantages of manual inventory tracking are discussed below:

1. No Cost Involved

When you do inventory tracking manually then you do not invest in any automated software & it can be cost-effective when you only have limited inventory to take care of! So cost is minimized as a result!

2. Small Size Organizations

When your business is small you can do manual inventory tracking on your own especially when there is not much inventory is involved. As soon as inventory starts increasing then manual inventory management becomes hectic.

Disadvantages of manual inventory tracking are discussed below:

1. Manual Inventory Tracking Is Inaccurate

When you do inventory tracking manually chances of collecting inaccurate data is more because organizations store data in a spreadsheet & multiple employee access it. So, data redundancy can occur, or data by mistake can be deleted or altered inventory tracking is not reliable.

2. Inventory Management Issues

When you manage inventory manually facing inventory management issues is very common. For instance, you think that your inventory is available in stock but when you check physical inventory it is not available. This type of event decreases productivity and operation hindrance also occurs.

What Is Automated Inventory Tracking & What Are the Advantages & Disadvantages of It?

In automated inventory tracking, the process is organized as software is utilized & since inventory tracking is automated and that is why accuracy is increased. Human errors are minimized!

The advantages of automated inventory tracking are discussed below:

1. Inventory Tracking

You have precise inventory numbers that are helpful in gathering information such as how much inventory you require in a month. Inventory tracking saves organizations from several problems such as overspending on inventory expenses (Overstocking).

As we know inventory tracking is a continuous and never-ending process. Therefore, maintaining accuracy is a very critical part of business and automated software can help you in achieving that objective.

2. Better Inventory Control

When inventory is not available in stock, it results in decreased productivity, business loss & delivery is not done on time.

If a machine fails and spare parts are not available in stock, then it can affect your organization's productivity. The lacking part is the centralization of information, it often leads to passing wrong information & mismanagement of work.

3. Avoid Inventory Shortage

Organizations can analyze product requirements with automated software to avoid a shortage of inventory.

Effective inventory management is crucial in producing products and if it's not managed properly, it can result in delayed production, a decrease in productivity and the customer will be disappointed as well.

Lots of organizations suffer from business losses due to the inventory shortage.

Disadvantages of automated inventory tracking are discussed below:

1. An Application Can Be Diverted

Sometimes numbers mentioned in the application can be changed as per the software and actual numbers.

It can occur due to manipulation of software or some technical issue, that is why conducting audits regularly is important so that software and actual numbers are matched.

2. Too Much Dependency

Lots of organizations are too dependent on software once the system is installed as a result when the system crashes work suffers so one should not depend on software too much so that work does not hamper. Data is also crucial as data is stored in the database.

3. Reduced Audits

When an organization is equipped with automated software then inventory management is simplified. That is why the audit is avoided but it shall be done otherwise numbers can be mismatched and that can impact the productivity of the organizations. It is believed when computers are doing their work efficiently then there is no need to perform audits.


Manual inventory tracking is one of the traditional and initial methods used for inventory tracking. However, as a business is evolving organizations need to change their business tactics and technology as well.

That is why investing in automated software is essential. There is no doubt that inventory management software can be very helpful in optimizing business and increasing the productivity of the business.

Frequently Asked Questions (FAQs)

Does automated inventory tracking help in forecasting demand?

Yes, automated inventory tracking helps in forecasting demand as it provides data through which you can find patterns that will help in business growth. It can give your business an extra edge that will boost your business.  

Can this automated inventory tracking software be integrated with other software?

Yes, this automated inventory tracking software can be integrated with other software as lots of business uses many applications and one software can be helpful to other software this is where the integration feature can be helpful as they can fetch data from one application to another.  

Can inventory tracking be beneficial for which type of organization?

Inventory is one of the most important for all organizations as all the organizations use inventory one way or another so companies of all sectors can use inventory tracking software. However, it is mostly used by the retail industry, logistics, manufacturing, automotive, healthcare, travel, and so on!

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