Why is having an inventory tracking system so important? A good system will let you know when it’s time to reorder, what goods are popular sellers, what goods are not, and what shipments are en route. Essentially, a company uses its inventory management tracking system to take the pulse of its business.  After all, what is inventory worth if you don’t know how to manage it?

A huge corporation like Walmart must have a good communication system in place in order to monitor merchandise sales and stock levels. A break in this system translates to serious loss to the company. So, how does Wal-Mart track their huge variety of goods?

In the 1980s, Walmart invested in a sophisticated inventory tracking system that uses their own satellite communication system. This sophisticated IT and communications system not only tracks inventory, it allows technicians and Wal-Mart executives to easily communicate with individual stores, access sales records, and troubleshoot and manage problems. In short, the system provides a comprehensive picture of how the entire organization is performing.

Wal-Mart has also built a structure that allows individual stores to customize their delivery systems. For example, certain stores (those within a certain distance of a geographical center) have the option of having inventory replenished within a day. This means that stores are managing their own stocks from within and are therefore better able to make good decisions about keeping inventory on hand and about what inventory might be ready for markdowns. By using this inventory tracking system, Walmart was able to reduce overall inventory supply while still insuring that their stores across the country still have an adequate supply.

Wal-Mart’s inventory tracking system is huge because Wal-Mart is huge. There is probably no need for your small business to get to work on a network of satellites. A simple perpetual inventory system to help you track products is likely all you need.