A manual inventory system is updated, maintained and controlled without using a technical system. This means the business updates the inventory by physically counting the inventory items on a frequent basis. Manual inventory systems are time consuming, as the business owner must keep track of inventory sales on a daily basis, while updating the system manually at the end of the day.
A manual inventory requires employees and managers to write down each time an item is removed from the inventory. If one employee forgets to mention that the last coffee product has been removed from the inventory, a manager expects the item to still be available for a customer during a sale. Compared with a technical inventory system, a manual inventory system does not help the communication in the workplace. A technological inventory system updates automatically once an item has been scanned out of the inventory, so all employees in the business know what is available at all times.
A technological inventory system provides updated numbers for the inventory on a daily basis. However, a manual inventory system does not provide any number, as all numbers from the inventory are gained through physical inventory counts. One of the difficulties of running a manual inventory system is that physical inventory counts must be performed frequently to control the items in the inventory. This is time consuming and can cost the business money, if employees must come in to help out outside of business hours.
Keeping track of daily purchases is another difficult controlling measure with manual inventory systems. While technological inventory systems scan the item and subtracts the item from the inventory, a manual inventory system requires the employees to write down the items sold during a single work day. This can be a difficult task, as one employee may lose the list of items sold or another may forget to write down a sale.
A manual inventory system does not update at the end of the day with updated inventory counts. This means you must go through the inventory items each time you need to place an order for new raw materials, products or supplies for the inventory. This can be a time consuming process, as you will physically have to go through each product box and browse through the items. A technological inventory system can provide you with updates, so you know exactly how many items you have left in your inventory. This means you can check your inventory and order your supplies from your office desk with a technical inventory.
- U Balt: Economic Order Quantity and Economic Production Quantity Models for Inventory Management
- Just Ask Mary: The Importance of Inventory Control; Mary Marriott; Jan. 2010
- Masao Nakamura, Sadao Sakakibara and Roger Schroeder. "Adoption of Just-in-Time Manufacturing Methods at U.S.- and Japanese-Owned Plants: Some Empirical Evidence," pages 230-231. IEEE Transactions on Engineering Management, 1988.
- Electronic Code of Federal Regulations. "Regulation S-X, 17 CFR Part 210: Sec. 210.5-02 Balance sheets." Accessed Aug. 1, 2020.
Based in Toronto, Mary Jane has been writing for online magazines and databases since 2002. Her articles have appeared on the Simon & Schuster website and she received an editor's choice award in 2009. She holds a Master of Arts in psychology of language use from the University of Copenhagen in Denmark.