We are surrounded by stuff and keeping track of it is a business necessity. After all, if you do not know what you have, how much you have or where it is located, how can you use it, sell it, rent it or consume it? How do you know when you need to replenish your stuff or discard excess stuff? In our three-part blog post series, we’ll demystify how to effectively track your stuff. For our first post, let’s analyze how to define the stuff you’re tracking.
Stuff comes in many shapes, sizes and colors and varies by country, industry and user. Your stuff may include personal items such as cell phones or laptops, it may be raw materials used to make finished goods such as pottery or steel, it may include tools or machinery used to manufacture other stuff like tables and chairs.
Stuff is a non-technical term used to represent anything of value to your organization. While the kinds of stuff are limitless, all stuff has one thing in common, in order to understand its value, you must be able to track and access data about your stuff including knowing that we have it and were it is located. In other words, you need to track it.
The first step to tracking your stuff is defining your stuff. By correctly defining your stuff, you will be able to determine the best method to track it. To properly define what your stuff is and how to track it you need to identify several key categories that your stuff may (or may not) belong to. To begin, you need to determine the list or collection of stuff that you need to track. The result of this exercise will allow you to define an “item”. Then you will determine whether each item is considered inventory or assets, followed by the associated subcategory for each. The hierarchy is as follows:
Stay tuned for our next post, where we’ll dive into the difference between items and inventory.