Blog - Answers to 5 Big Inventory Management Questions - Fishbowl Inventory (2023)

Let’s answer five complex questions related to inventorymanagement. Those questions are:

  • How do I manage a warehouse?
  • How do I track inventory in multiplelocations?
  • How do I get the best value for my money with inventorycontrol software?
  • What is the best way to manage inventory?
  • What results can I expect from using inventorymanagement software?


This is a big question with several parts that need to beaddressed in order to answer it properly. You need to keep a close eye on leadtimes, optimize your warehouse layout to make picking more efficient, trainyour workforce on the correct procedures and software, and have the right toolsfor the job.

Order Management

Set automatic reorder points on your parts, products, andall other materials in your warehouse, with their lead times in mind. That way,you’ll constantly get new items coming in to replace outgoing ones and keepyour inventory levels in equilibrium.

Keep track of your vendors’ performance. Make sure they’regiving you competitive prices and consistently getting the right items to youat the right times.

Use wireless barcode scanners to quickly receive items intoyour warehouse and keep your inventory records accurate and up to date.

Warehouse Setup

Group products that are often purchased together next toeach other, like suntan lotion and beach towels. Put the most popular itemsclosest to the receiving entrance so they’re the quickest to move into and outof your warehouse.

Track inventory by row, shelf, and bin so you always knowwhere to find items when it comes time to pick them.


You don’t need to hire dozens of warehouse workers to managea warehouse. If you use barcode scanners and warehouse management software, youcan keep your warehouse running smoothly with as few as a handful of workers.As long as they’re properly trained on the software and inventory procedures, asmall group can get just as much done as a large one, if not more.

The Right Tools

Having the right tools is the key to success in each of theabove areas of warehouse management. By automating as many processes aspossible, you can do more with less and keep costs down in terms of how muchyou spend on inventory and how much you spend on your workforce.


The answer to this question is actually quite simple: Use inventory tracking software. That might seem oversimplified, but the fact is that pretty much everything you need to handle the complexity of multiple locations is found in advanced inventory tracking system.

This software allows you to:

  • Check inventory levels at each location.
  • Integrate with UPS, FedEx, USPS, and other majorcouriers to get shipments out the door fast.
  • Transfer items from one place to another if onewarehouse has a shortage and the other has an excess.
  • Monitor long-term trends to see which locationssell more of a certain product and, thus, where more of that product should bestored.
  • Ensure shipments arrive at their destinations ontime. If a supply chain gets disrupted, you’ll hear about it quickly so you canresolve the problem.
  • Use wireless barcode scanners to order, receive,and cycle count inventory in each location.
  • Quickly update your inventory data on aper-location basis so you always know where it stands at any given moment.
  • Automatically update your accounting records inQuickBooks after transactions are made.

In summary, to track your inventory in multiple locations,all you need is a good inventory tracking solution, some training on how to useit, and some elbow grease to put it into practice.


Focus not just on what the software costs right now, but howmuch it will cost to switch to something else in a few years if you outgrow acheap solution. Make sure it works with your accounting solution and it caneven extend the life of QuickBooks and other business software you’re alreadyusing.

There are four main ways to answer this question: cost,features, scaling, and integration.

Long-term Cost

It’s not just the initial price of the software you need totake into account when deciding if it’s the best deal. You also need to add inthe cost of software training, support, renewal fees, additional users, andhardware. In the long run, what will the cost-benefit ratio look like? It’simpossible to know the ultimate answer to that question, but try to look out asfar as you can.


Inventory control software should give you a variety offeatures, including the ability to:

  • Check inventory levels in real time.
  • Cycle count your inventory.
  • Track inventory in more than one location.
  • Create multilevel bills of materials and workorders.
  • Print and scan barcodes.
  • Track inventory by serial number, revisionnumber, lot number, expiration date, and more.

Make sure it does everything you need it to do.


You should purchase software that is scalable so it willmeet your needs for many years. It’s expensive and a waste of time to have toswitch software platforms every few years when you outgrow one’s functionality.All of that extra money and time spent on new software and training would bebetter put to use if you make the best possible choice the first time and staywith the same software for many years.

Good inventory control software should be able to addmultiple-location tracking, advanced manufacturing, and numerous other featuresto its core functionality. That way, you don’t have to pay for features youdon’t need at the start, but they’re easily accessible when you need to make thejump to something more complex.


If you use QuickBooks for your accounting, it’s a good ideato get an inventory control solution that integrates well with it. This willkeep your inventory and accounting records accurate so you won’t have to go inat the end of every month and fix discrepancies, like most companies with amanual inventory system do.

You should also be sure the inventory software works withyour online shopping cart, if you run an ecommerce website. There’s plenty of othersoftware that companies use, and it works best when each one is connected.

The Best Value

If you keep these four points in mind when searching throughinventory control software options, you should be able to make a wise choiceand get the most bang for your buck.


It all depends. What works for an electronics store wouldn’texactly work for a grocery store, for example. Decide what you value most, whatyour budget will allow, what your customers expect, how big or small yourbusiness is, and other factors, and that should give you a good idea of thebest way to manage your inventory.

There are a number of criteria you can use to answer thisquestion for your particular needs and situation. Let’s answer the followingquestions as stepping stones to answering the big question:

What Do You ValueMost?

In other words, what do you want to get out of yourinventory? Some companies want more than anything to keep their inventoryprocesses as simple as possible, others want to make them as fast as possible,and still others want to keep the costs low. Your overall goal has a big effecton how you manage inventory.

If you’re interested in simplicity, you may want to stickwith Excel or some system that is easy to learn. If you want speed, you shouldlook into an automated system. If you want inexpensive, you need to weigh thecosts and benefits of buying a software solution that could increase efficiencybut also cost a bit at the start.

What Is Your Budget?

Companies have to work within their budget. Make sure theinventory solution you come up with works with what you have right now. Thereare plenty of tools to make your inventory management goals come true, but youcan’t use them all, nor should you take a trial-and-error approach to findingwhat will work.

You’ve got to carefully analyze your needs and do an ROIanalysis on any potential solution, whether it’s purchasing inventorymanagement software, staying on Excel, or doing something else.

What Do YourCustomers Expect?

Inventory management is simply the means of getting productsto your customers. When you look at it that way, your customers’ expectationsare what determine your method of inventory management.

Do your customers place huge orders for highly technicalproducts and they don’t expect to get them for weeks? Then you can afford tohave long lead times on products, store very little in your warehouse, and savemoney on the space you don’t need. But if your customers expect products to beon the shelf when they’re looking for them, you need to be quicker and moreresponsive. Your supply chains need to be quick, you must have a safety stockto avoid shortages, and you need to be mindful of seasonal demand trends.

How Large Is YourCompany?

Big companies require more complex inventory managementtools than small ones. A small business can make do with an Excel inventorymanagement system or even a paper-based system for a number of years. But whenthey reach a point where they are unable to track all of their products on aspreadsheet and they need more detailed information on sales, orders, and otherparts of their inventory, it’s time to move up to a more sophisticated tool:inventory management software.

If your company is growing rapidly, it’s a good idea to getscalable inventory management software, so it can grow with your business andlet you purchase and add new tools when you need them, such as ecommerce,shopping carts, advanced manufacturing, barcode scanning, etc.

Which InventorySystem Should You Use?

There are four main ways to approach inventory management. We’veanalyzed them in depth before, so we’ll just mention them briefly againhere:

Mix-Max System –When an inventory level falls to a minimum level you reorder so it goes back upto the maximum level.

Two-Bin System –You have a main bin of products that you normally sell from and when it runsout you switch to a backup bin until the main bin is replenished.

ABC Analysis –Organize your products in three buckets: expensive, large ones, moderatelyexpensive medium-sized ones, and inexpensive, small ones.

Order-Cycling System– Periodically do an inventory check (such as once a week) and reorderproducts that are low.

It All Depends

The best way to manage your inventory depends on the abovefactors. It’s not a decision that should be made lightly, nor does the oneyou’ve made have to be permanent. If you’ve tried one system for years, butyou’ve either outgrown it or you’ve noticed that it hasn’t produced the resultsyou’ve been looking for, it may be time to try something else.


Empowered employees, lower costs, faster response times tocustomers’ orders, improved planning, and optimized warehouse layouts are justa few of the results you can expect to receive when you use inventorymanagement software in your business.

More EmpoweredWorkforce

With barcode scanners and an in-depth knowledge of inventorysoftware, your employees will be able to get a lot more done during theirworkdays. Instead of having to wait for a dedicated warehouse worker pick itemsoff a shelf or put new products away, they can do those things themselves.Processes that used to take hours can be done in fraction of that time.

Lower Expenses

With employees getting jobs done quicker and inventorylevels getting balanced, your business can expect to cut expensessignificantly. Inventory management software saves money by reducing yourstorage needs, carrying costs, overstocks, and other unnecessary expenses.

Quicker ResponseTimes

When multiple purchase orders come in, you can pick all ofthem at the same time, find the right containers to package them in, and thenalert UPS, FedEx, or another carrier that you have a package waiting for themto pick up. All of this leads to quicker response times. Your customers willget their orders delivered faster and you’ll have a more productive andefficient workplace.

Better Planning

Good inventory management software has the ability togenerate reports based on the data it records. For example, if you want to seewhich products are your top sellers at each of your locations, you can accessthat information in graphs, charts, and spreadsheets. These reports can helpyou figure out where you can make the best use of your resources. Seasonalplanning, location planning, and many other strategies can be formulatedthrough this data.

Optimized Warehouse

You won’t have to hunt through your warehouse to findproducts. You can access detailed maps showing where everything is by bin andshelf number. Not only that, but you’ll be able to move things around tooptimize their placement in the warehouse. If two or more products are usuallysold together in the same order, you can move them next to each other in thewarehouse to speed up the picking process. You can also put low-selling itemsfarther away from, and high-selling items closer to, the receiving door todecrease the amount of time it takes to put them away and get them ready forshipping.

Expect Big Results

These are some of the biggest results you can expect from using warehouse management system in your business. You don’t have to think about these purely in the abstract, either. Check out real-life examples of companies that have seen dramatic turnarounds in their operations by implementing Fishbowl Manufacturing or Fishbowl Warehouse: Fishbowl Case Studies.


What are the questions that an inventory manager should answer? ›

Role-specific questions
  • How good are you in math on a scale from 1 to 10?
  • Are you familiar with cycle counting? ...
  • How is EOQ important and how do you use it?
  • How do you calculate the value of inventory?
  • Have you used ABC analysis of inventory control? ...
  • What do you know of Material Requirements Planning (MRP) systems?

What is the objective of fishbowl inventory? ›

The purpose of Fishbowl is to give small and midsize companies the power to control complex business functions, such as inventory management and manufacturing, with ease and for an affordable price.

What are 5 best practice procedures you should follow to ensure appropriate establishment inventory management? ›

Best practices for inventory management
  • Keep your warehouse organized.
  • Label inventory appropriately.
  • Develop, document, and follow efficient storage processes.
  • Keep a modicum of overstock handy.
  • Maintain good relationships with your suppliers.
Aug 18, 2022

What are the 5S principles in inventory? ›

5S is a cyclical methodology: sort, set in order, shine, standardize, sustain the cycle. This results in continuous improvement.

What are the top three to five principles of inventory management? ›

There five key principles of inventory management:
  • demand forecasting,
  • warehouse flow,
  • inventory turns/stock rotation,
  • cycle counting and.
  • process auditing.

What are three basic questions of inventory control? ›

When it comes to the supply chain, there are three questions to which knowing the answer is imperative: when, where, and how much? Luckily, there are inventory control solutions available to help businesses answer these important questions.

What are the two most basic inventory questions answered? ›

The two most important inventory-based questions answered by the typical inventory model are. when to place an order and what is the cost of the order.

What is the fishbowl strategy to model? ›

Fishbowl is a strategy for organizing medium- to large-group discussions. Students are separated into an inner and outer circle. In the inner circle or fishbowl, students have a discussion; students in the outer circle listen to the discussion and take notes.

What is the summary of fishbowl? ›

Book details

A goldfish named Ian is falling from the 27th-floor balcony on which his fishbowl sits. He's longed for adventure, so when the opportunity arises, he escapes from his bowl, clears the balcony railing and finds himself airborne.

What is an example of fishbowl approach? ›

Example. In a fishbowl discussion, people seated inside the circle actively participate by asking questions and sharing their opinions, while those standing outside listen carefully to the ideas presented.

What are the 4 acceptable inventory methods? ›

The four main inventory valuation methods are FIFO or First-In, First-Out; LIFO or Last-In, First-Out; Specific Identification; and Weighted Average Cost.

What are the 4 main steps in inventory management? ›

To manage your inventory effectively, you can follow a 4 step process:
  • Assess what you have now.
  • Review what you had.
  • Analyse sales.
  • Identify items to repurchase or retire.
Mar 7, 2023

What are 4 typical ways to control inventory? ›

Four popular inventory control methods include ABC analysis; Last In, First Out (LIFO) and First In, First Out (FIFO); batch tracking; and safety stock.

What are the five key 5S of Kaizen? ›

5S is the principles of work environment improvement derived from the Japanese words seiri, seiton, seiso, seiketsu, and shitsuke. In English the five Ss are respectively described Sort, Set Shine, Standardize, and Sustain.

How do you overcome poor inventory management? ›

20 Solutions to Overcome Inventory Management Challenges
  1. Centralized Tracking: Consider upgrading to tracking software that provides automated features for re-ordering and procurement. ...
  2. Transparent Performance: ...
  3. Stock Auditing: ...
  4. Demand Forecasting: ...
  5. Add Imagery: ...
  6. Go Paperless: ...
  7. Preventive Control: ...
  8. Measure Service Levels:
Feb 3, 2022

What is ABC inventory analysis? ›

ABC analysis is a method of inventory management that involves grouping inventory items into three categories, "A" items being the most important and "C" items being the least important.

What is the ABC rule of inventory management? ›

ABC analysis is an inventory classification strategy that categorizes the goods into three categories, A, B, and C, based on their revenue. 'A' in ABC analysis signifies the most important goods, 'B' indicates moderately necessary goods, and 'C' indicates the least essential inventory.

What is the first rule of inventory management? ›

Rules of Inventory #1: Have Enough Inventory to Service Demand. In the past, when inventory ran out, companies would simply issue a backorder while they purchased or manufactured more items. Customers would simply wait for the item to be in stock again.

What is the 80 20 rule in inventory management? ›

What Is the 80/20 Inventory Management Rule? The 80/20 rule states that 80% of results come from 20% of efforts, customers or another unit of measurement. When applied to inventory, the rule suggests that companies earn roughly 80% of their profits from 20% of their products.

What are the three 3 tools used to improve inventory management? ›

Inventory management tools and techniques
  • Barcode data collection. The perpetual inventory system is highly dependent on timely and accurate reporting. ...
  • Cycle counting to improve accuracy. ...
  • ABC analysis for prioritisation. ...
  • Integrated planning and execution. ...
  • Lot tracking and traceability.
Apr 19, 2021

What questions should I ask about inventory? ›

Ask These 10 Inventory Management Questions
  • Who owns the inventory until it's sold?
  • What WMS (warehouse management system) and OMS (order management system) does the provider use?
  • What type of reporting is available to you about your inventory? ...
  • Who manages vendor/manufacturer relationships?
Jun 14, 2022

What are the key points of inventory controller? ›

Inventory Controller Duties:
  • Identify, implement, and maintain inventory control procedures for all company property.
  • Maintain accurate inventory records and data.
  • Maintain detailed records of inventory transactions.
  • Maintain accurate inventory reports.
  • Assist in preparing for audits.
Oct 7, 2022

What are the three 3 categories of inventory items? ›

The three types of inventory include raw materials, work-in-progress, and finished goods.

What are the three inventory techniques? ›

The three most popular inventory management techniques are the push technique, the pull technique, and the just-in-time technique. These strategies offer businesses different pathways to meeting customer demand.

What are the 3 important types of inventories? ›

Raw materials, semi-finished goods, and finished goods are the three main categories of inventory that are accounted for in a company's financial accounts.

What are the two questions the inventory decision may be summarized by? ›

The inventory decision may be summarized by two questions:

How much to pay and when to order.

What four questions can be asked when assessing hazards? ›

4 Questions to Ask When Working in Hazardous Conditions
  • What are the hazards?
  • What are the worst possible things that could go wrong?
  • How will I deal with them?
  • What are the prudent practices, protective facilities, and equipment necessary to minimize the risk of exposure to the hazards?

What are fishbowl questions? ›

These discussion starters can facilitate the conversations:
  • What did you observe during the discussion of the text?
  • What is one thing you heard that you agree with?
  • What is one thing you heard that you disagree with?
  • How did you feel while on the outside of the fishbowl?

What are the three rounds of fishbowl? ›

There are three rounds in Fishbowl: 1) Taboo 2) Password 3) Charades.

What is the fishbowl paradox? ›

In simple terms, it is defined as one's inertia to change, leading us to stick to a decision made previously (even if changing it would imply higher benefits for that individual). The power of a default option comes right from status quo bias in choice architecture.

What is the facilitation technique of the fishbowl? ›

The fishbowl technique

The fishbowl works with two concentric circles of chairs in the room. One small inner circle (4-6 chairs) where the speakers sit and drive the conversation and an outer circle (many people) where the audience sits, listens and thinks about new ideas .

What do keys in a fishbowl mean? ›

One version of a fishbowl party is a gathering of people who like to swap sexual partners. The concept is simple, attendees put their keys in to a bowl when they arrive and then people take a key out of the bowl and the person who's keys they pick is the person they go home with.

What is an example sentence for fishbowl? ›

Example Sentences

Being a politician these days means living in a fishbowl—every part of your life is open to public view.

What type of business is fishbowl inventory? ›

Fishbowl (formerly ExpressTech Holdings) is an Orem, Utah-based software company that develops and publishes inventory management software and related software.
Fishbowl Inventory.
HeadquartersOrem, Utah, United States
ProductsInventory Management Software
3 more rows

Where is fishbowl inventory used? ›

Fishbowl is a software that provides inventory-control for companies that use spreadsheets or QuickBooks to track inventory. In particular, it's designed to manage inventory and automate business for small to midsize companies. It automates the ordering and purchasing processes and quoting as well.

What are the four 04 major challenges in inventory management? ›

Challenges in Inventory Management
  • Inability to locate the inventory stocks. ...
  • Choosing a manual inventory process. ...
  • Outdated products. ...
  • Analyzing the market demand. ...
  • Overstocking problems. ...
  • Inability to manage inventory waste and defects. ...
  • Lack of a centralized inventory hub. ...
  • Expanding product range.
May 6, 2022

What is the ideal rule in managing inventory? ›

The 80/20 rule, also known as the Pareto Principle, states that 80% of results come from 20% of causes. Therefore, you need to identify and prioritize the 20% of factors that produce the highest outcomes. In inventory, the rule suggests that 20% of your inventory accounts for 80% of your profit.

What are the 6 types of inventory? ›

The 6 Main classifications of inventory
  • transit inventory.
  • buffer inventory.
  • anticipation inventory.
  • decoupling inventory.
  • cycle inventory.
  • MRO goods inventory.
Sep 29, 2020

Which method is most important in inventory management? ›

Demand planning is an important part of successful inventory management. It is the process of determining how much of each item you anticipate selling, and when. Once demand is determined, inventory management follows the flow of goods from the supplier through production and ultimately fulfilling customer orders.

What are the 6 steps in conducting an inventory? ›

  • Understand and characterize your demand. Inventory shortages or excess is the result of supply being out of sync with demand. ...
  • Characterize your supply and inventory costs. ...
  • Stratify your inventory. ...
  • Establish goals for each category and measure.
  • Develop a process to track and.
  • Refine goals and adjust processes.

What is the simplest way to manage an inventory? ›

Here are some of the techniques that many small businesses use to manage inventory:
  1. Fine-tune your forecasting. ...
  2. Use the FIFO approach (first in, first out). ...
  3. Identify low-turn stock. ...
  4. Audit your stock. ...
  5. Use cloud-based inventory management software. ...
  6. Track your stock levels at all times. ...
  7. Reduce equipment repair times.

How do you manage inventory easily? ›

Tips for managing your inventory
  1. Prioritize your inventory. ...
  2. Track all product information. ...
  3. Audit your inventory. ...
  4. Analyze supplier performance. ...
  5. Practice the 80/20 inventory rule. ...
  6. Be consistent in how you receive stock. ...
  7. Track sales. ...
  8. Order restocks yourself.
Jan 23, 2023

What are the 3 main objectives of inventory control? ›

To keep inactive, waste, surplus, scrap and obsolete items at the minimum level. To minimize holding, replacement and shortage costs of inventories and maximize the efficiency in production and distribution. To treat inventory as investment which is risky.

What are the 4 types of inventory management? ›

The four types of inventory management are just-in-time management (JIT), materials requirement planning (MRP), economic order quantity (EOQ) , and days sales of inventory (DSI). Each inventory management style works better for different businesses, and there are pros and cons to each type.

What are the 3 techniques to control inventory? ›

The three most popular inventory management techniques are the push technique, the pull technique, and the just-in-time technique. These strategies offer businesses different pathways to meeting customer demand.

What is an inventory checklist? ›

Inventory Checklist is a record of the items stored in a specific area or department of a company. It helps in tracking and controlling the goods in an organized way. This document can be also be used for inspection because all items in the inventory are recorded here.

What is the inventory formula? ›

The basic formula for calculating ending inventory is: Beginning inventory + net purchases – COGS = ending inventory. Your beginning inventory is the last period's ending inventory. The net purchases are the items you've bought and added to your inventory count.

What is the best way to manage inventory? ›

Inventory management techniques and best practices for small business
  1. Fine-tune your forecasting. ...
  2. Use the FIFO approach (first in, first out). ...
  3. Identify low-turn stock. ...
  4. Audit your stock. ...
  5. Use cloud-based inventory management software. ...
  6. Track your stock levels at all times. ...
  7. Reduce equipment repair times.

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