8 Easy Steps to Plan and Manage Consumable Inventory

Efficient inventory management is a key contributor to business efficiency and growth. This includes tracking consumable inventory like tools, nuts, and bolts to ensure stock never falls short. As consumables are tricky to manage, businesses will likely face unexpected outages, leading to interrupted workflows and delays. A simple way to avoid unnecessary roadblocks is to implement a dedicated inventory management system to help track consumable items. 

This blog will explain what consumable inventory is, the advantages of monitoring consumables, and methods for tracking them. 

What is consumable inventory? 

Consumable inventory refers to the items that are used up, worn out, or depleted during the course of daily business operations. Given the nature of these items, they require robust procurement strategies to ensure a business never runs out of critical stock. Here are some characteristics of consumables:

Short Lifespan: Consumable items like perishable goods or time-sensitive medication have a short expiry date. 

Low-value items: Since consumable items are used within processes, they are typically low-value items and not expensive to purchase. 

Recurrent procurement: To cater to the demand for consumable items, businesses need to set up a procurement cycle with automated reordering. 

Examples of consumable inventory 

Every industry relies on consumable inventory to complete daily tasks. Let’s take a look at some examples of consumables from three main industries:

Clinics (Healthcare)

Consumables are mainly used in patient care and surgeries, including:

Medical supplies: Bandages, gauze, syringes, IV drips, and wound dressings. 

Diagnostic inventory: Blood collection tubes and reagent kits. 

Protective equipment: Gloves, masks, and shoe covers. 

Colleges (educational institutions) 

Consumables are used to teach, maintain, and upkeep the campus. They include: 

Tech inventory: Printer cartridges, batteries, and HDMI cables. 

Teaching stationery: Whiteboard markers, papers, and notebooks. 

Cleaning supplies: Screen protectors, sprays, and other items. 

AV and media (Entertainment) 

Media consumables aid the process of broadcasting and event scheduling.

Recording supplies: Blank DVDs and memory cards. 

Lighting accessories: Gels, diffusers, and gaffer tapes. 

Batteries and cables: Power banks, rechargeable batteries, and power cords. 

For instance, extra concrete in stock by construction companies is classified as safety stock, and packing material is classified as WIP.  While companies regularly invest in consumable items, not all of them ensure that they maximize the return on this investment. 

Benefits of tracking consumable inventory 

Businesses can make data-driven procurement decisions by tracking how consumable inventory is used. Here are some ways your business will benefit by implementing a cloud-based system to manage consumables: 

1. Improved stock visibility

First and foremost, you need to know whether the consumable inventory you require is available and in what quantity.  Having an accurate account is essential to plan and implement uninterrupted production processes. Automated stock management can give you an instant snapshot of which consumable inventory items are currently available and ready for use in the warehouse. 

2. Better cost control 

Research shows 20-30% of inventory is obsolete or dead stock. Holding extra inventory can add to costs and take up warehouse storage space. Keeping track of consumables in stock to regularly reduce dead stock can save organizations resources and money. 

3. Data-driven forecasting

The best way to prevent inventory distortion is to maintain optimal stock levels at all times. Doing so is best possible when you have the right tools for the job. Frequent reports on stock utilization can help businesses forecast future trends for procurement. 

4. Monitor inventory across locations.

For companies housing inventory at various warehouses, keeping an accurate record of quantity becomes challenging. However, a cloud-based management system lets you run stock count reports for every location to improve visibility. 

5. Ensure compliance

To gain compliance with Generally Acceptable Accounting Principles (GAAP), organizations need to audit their stock levels regularly. This can be quickly done by scheduling audits throughout the year to ensure all requirements have been met. 

How to track consumable inventory 

Setting up a management strategy for consumables is quite different from tracking fixed assets. Certain factors, such as stock thresholds and reordering cycles, must be accounted for while tracking consumable inventory. Let’s take a look at the steps involved in setting up a consumable management strategy:

1. Define all inventory 

Start by creating a list of the different types of inventory your business owns. Include important information such as identification numbers, purchase cost, SKU, and barcodes. Next, classify the main categories for your inventory. Some main categories include office supplies, IT equipment, and medical consumables. Once done, list all essential metrics you want to track for the inventory, such as quantity, location, or suppliers. 

2. Select an inventory management system

As consumables are challenging to track, investing in a reliable inventory platform is a good idea. Depending on your budget and business needs, there are a couple of options available:

Spreadsheets: The fundamental system where information has to be manually entered. Suitable for small companies with slow workflows. Due to their non-dynamic nature, spreadsheets can result in siloed data. 

Inventory management software: Hosted in the cloud, inventory management software offers a variety of features to help organizations track consumables. It reduces manual workload with efficient workarounds to keep data updated at all times. 

Barcoding systems: A level up from spreadsheets, barcoding systems enable businesses to tag all inventory items and scan them in a system to keep track of consumption.  

3. Label and record baseline inventory 

After selecting the inventory management system, the next step is to record stock levels. Input the initial and reorder quantities for all your consumables. Automating such workflows will help reduce the chances of unexpected outages. Also, note down item descriptions, SKUs, purchase costs, and expiration dates. Add locations for all inventory items if placed in different warehouses. 

4. Record usage patterns

To optimize consumable inventory, it is important to analyze how items are being used. By keeping track of inventory consumption, businesses can predict future trends to avoid over/under-stocking. Successful implementation of this practice can help save costs, improve productivity, and smooth workflows. Effective inventory control enables organizations to predict accurate reorder levels as a part of a reliable procurement process. 

5. Get suppliers on board

Choosing the right suppliers for your inventory management plays a critical role in maintaining optimal stock levels at all times. With the right vendors, you can clearly communicate your requirements, receive high-quality items, and even practice damage control in emergencies. There are certain things to consider when choosing the right inventory suppliers:

• Delivers quality products and services
• Can meet deadlines
• Provides excellent customer service 
• Helps meet regulatory requirements 

6. Set reorder levels 

To set up accurate consumable inventory tracking, businesses need to ensure that the reorder cycle is set up appropriately. This can be done by using an inventory management system to define minimum threshold levels for each item. An alert will be sent to the admins whenever that lower limit is reached, telling them to generate a purchase order for new stock. Such practices ensure a constant supply of consumables for efficient operations. 

7. Carry out regular audits

One of the best practices for inventory management includes carrying out frequent audits to study consumption patterns. Doing so is important as it helps to reconcile physical stock with the quantities recorded in the software. Audits also help to trace down inventory that’s not being consumed to eliminate extra costs that tie up funds unnecessarily. This way, any discrepancies can be eliminated to make accurate demand forecasts.   

8. Train staff 

It is important to train staff members to use the inventory management system to ensure the complete success of the process. Define clear roles and responsibilities on the types of consumables a business owns so that they are allocated for the right purpose. Prepare guides on how to set up threshold levels so that the correct stock quantities can be ordered on time. 

Optimize consumable inventory usage for your business 

The value derived from consumable inventory depends on the tools used to track and manage items. A cloud-based centralized asset tracking system enables businesses to automate stock management by setting a reorder cycle. Doing so automatically sends out alerts for low stock, notifying admins to procure new inventory. 

Optimal inventory stock leads to smoother workflows and higher productivity by reducing unnecessary delays. Organizations can use a reliable management system to maintain, reorder, and consume inventory for efficient operations.