What is Automated Inventory?

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  • Written By: Mary Lougee
  • Edited By: Jenn Walker
  • Last Modified Date: 27 September 2019
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Automated inventory is a system of keeping track of inventory on a perpetual basis. This type of inventory control ensures items are accounted for and that inflow and outflow status is updated on a continual basis. Automated inventory may be implemented through things like vending machines or with inventory management companies.

Based on controlling costs, automated inventory systems track each item or product used in production or retail sales through an inventory software system. When the minimum quantity of an item is reached, an order can be placed immediately and automatically to restock that item. This process takes into account the time needed for an order to be placed and for the company to receive and restock the item.

An inventory system of this type can ensure enough product is available for sale so that customers do not go elsewhere to buy it. This inventory management tool can also help prevent an excess or back stock of products that don't sell quickly. Excessive purchase of products leads to a higher cost of inventory, which in turn lowers profits. The costs of overstocking and under stocking items can be virtually deleted, increasing profits.


Vending automated inventory systems can be extremely effective cost control tools for industries that require employees to use tools and then return them at the end of the day or the end of a job. Instead of an employee working in a tool crib and checking tools in and out to employees, a vending machine can do the work, saving salary expense. Tools and other items, such as safety glasses, gloves and tape measures, can be loaded into a vending machine with a clear glass front so that items are visible. Employees can swipe their employee identification card and press the appropriate button to receive the goods. This type of automation can also help keep track of which employee is using which item, thereby assigning responsibility for their return.

A vending automated inventory system can help cut costs associated with theft. Return dates may be assigned for items so they are not misplaced or lost and then restocked. When an item is missing, the replacement cost is generally higher than the original cost, as most items rise in price over time. In some industries, the cost of unreturned or lost tools and other items are charged to the employee for the replacement cost.


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