So, you manage a warehouse and you need to get better control over your inventory.
Inventory tracking should be easy, right?
If you’re here, it’s probably because you’ve realized that isn’t always the case.
It doesn’t matter if you run a DC, manage spare parts, or need to fulfill e-commerce orders. Knowing what you have, and exactly where it is, is the foundation for the growth of your operation. Yet maintaining that foundation remains a challenge: in a Kardex survey of more than 100 warehouse leaders, 62.3% identified inventory control as a top operational challenge, while 30.2% cited inventory visibility.
The good news? You can retire your banged-up clipboards, tired (and probably broken) spreadsheets, and all of the guesswork. In this guide, we break down how to keep track of inventory in your warehouse, the best systems available, and how technologies like ASRS with integrated software can take all of the complexity out of inventory management.
Ready to dive in? Let’s get started.
How Manual Warehouse Inventory Tracking Falls Short
Many warehouses still rely on spreadsheets or paper-based logs. While these methods can work in very small operations, they quickly become a liability as order volume and SKUs grow.
Manual tracking:
- Is prone to human error
- Lacks the real-time data you need
- Makes audits and forecasting time-consuming and sometimes downright incorrect
- Can’t support high-volume, fast-paced fulfillment
In fact, these limitations are not only inefficient, but can be directly responsible for losing track of inventory over time.
Why Warehouses Lose Track of Inventory
Inventory becomes difficult to track when physical activity moves ahead of the records. A delivery is put away before its quantity is verified, a pallet moves to an overflow location without an update, or a picker borrows stock from another bin to complete an urgent order. Each workaround leaves the next employee working from information that no longer matches what is on the floor.
These gaps can persist even in well-organized warehouses with established software:
“Most customers are already running a WMS or ERP, and those systems work well. What trips them up is the physical side: the way inventory is laid out, and the manual picking and stocking around it, is what creates inaccurate totals.”
Jeffrey Peters
Regional Business Director, Kardex Remstar
When employees record transactions on paper for later entry or keep separate spreadsheets, that delay grows. Stock may appear available after it has been picked, while newly received inventory remains invisible to the team trying to fulfill an order. Effective tracking requires receiving, storage, and picking workflows that make it straightforward to verify inventory and record each movement as it happens.
Explore how tracking fits into the bigger picture of warehouse inventory management here.
Why Real-Time Visibility Matters
When inventory records lag behind warehouse activity, that gap affects decisions across the business. Purchasing may order stock that has already arrived, customer service may promise inventory already committed elsewhere, and supervisors may discover a shortage only when an order reaches picking.
Real-time visibility gives those teams a shared, current picture of inventory as receipts, moves, and picks are confirmed. They can spot shortages while there is still time to replenish or transfer stock, recognize excess before placing another order, and plan workloads around what is actually available
What you need is a warehouse inventory tracking system that works WITH your existing workflow, not against it. But how do you choose the right system?
Let’s take a look at the types of warehouse inventory tracking systems available, and the types of warehouses that they’re best for.
Types of Inventory Tracking Systems
Choosing the right warehouse inventory tracking system depends on your operation’s size, complexity, and level of automation. Here’s a breakdown of the most common types and what they offer:
1. Standalone Inventory Management Software (IMS)
These cloud-based or on-premise platforms are ideal for small to mid-sized operations looking to get organized fast. They track stock levels, movements, and order status, often integrating with barcode scanners and accounting software.
Core capabilities include:
- Item-level tracking with barcodes or RFID
- Basic reporting and analytics
- Manual or semi-automated replenishment
- Easy integration with handheld scanners and label printers
While these systems work well for smaller operations, they can struggle to scale across multiple warehouses or automate complex workflows. Unless they’re built with that flexibility in mind.
2. Warehouse Management Systems (WMS)
A warehouse management system (WMS) is a more comprehensive solution that controls the flow of inventory within the warehouse. It tracks receiving, storage, picking, packing, and shipping in real time.
Features often include:
- Location-level tracking (bin, shelf, zone)
- Support for multiple warehouses
- Labor and task management tools
- Integration with shipping and order systems
This type of software inventory solution is ideal for mid-to-large operations that manage high volume fulfillment or multiple facilities that need to centralize their inventory.
Looking for more information on centralizing your inventory management across multiple warehouses? We’ve got you covered!
3. ERP-Integrated Inventory Modules
Enterprise Resource Planning (ERP) systems often include built-in inventory tracking that ties into other departments like purchasing, finance, and sales.
These are best for enterprise companies seeking a fully unified business management system that goes much farther than simple inventory management.
4. ASRS-Based Inventory Tracking
Automated Storage and Retrieval Systems (ASRS) are the ideal solution for those looking to simplify and scale their warehouse inventory management system. That’s because ASRS comes equipped with inventory software that tracks every stored item, down to its serial number or lot number in real time. These automated systems completely eliminate the need for manual location checks and reduce picking errors dramatically.
Best of all? They’re easy to slot into the software solutions you’re already using. Choosing an ASRS solution with an open API means it can easily integrate into your IMS, WMS, or ERP.
ASRS-based inventory tracking is ideal for any warehouse of any size. In fact, in a recent survey of 100+ Kardex customers, 54% of ASRS users were running their warehouse with just 24 people or less.
If you’re looking to grow, scale, or secure your inventory process, ASRS is the ideal fit for you.
Warehouse Technology to Support Inventory Tracking
Once you’ve decided what kind of system you want to use for inventory tracking, it’s time to make sure it’s synced up with your storage technology.
This is where automated shelving systems can play a huge role.
Automated warehouse storage can . Having the right software is the first step. But if you really want full control over your inventory, you need the right storage technology. But which should you choose?
Here are some tips from our team of warehouse experts:
Vertical Lift Modules (VLMs)
VLMs are the workhorse of warehouse automation and inventory tracking. They consist of two columns of trays with an automated inserter/extractor that delivers trays to an operator access window. As items are stored or retrieved, the system logs every transaction. Yes, that includes item details, tray location, operator ID, and time stamp.
VLMs are ideal for high-throughput picking environments (such as distribution centers and order fulfillment hubs) with a broad SKU mix.
Vertical Carousel Modules (VCMs)
VCMs are another common choice for automated inventory tracking for warehouses. VCMs rotate carriers vertically to deliver items to a fixed access point. You can think of it a bit like a storage Ferris wheel. Your operators retrieve or store items at an ergonomically positioned window, and all movements are logged by your integrated system.
VCMs are ideal for Maintenance, MRO (maintenance, repair, and operations), and smaller inventory profiles where accessibility and visibility are important. You’ll also find VCMs heavily used for file storage, evidence storage, laboratories, hospitals, and anywhere you need to store a dense amount of similarly-sized items.
Inventory Tracking vs Inventory Traceability: What’s the Difference?
The terms "inventory tracking" and "inventory traceability" are often used interchangeably, but they serve different purposes in warehouse operations. Both are essential to building an accountable, efficient, and responsive inventory system—especially in regulated or high-volume environments.
Inventory Tracking: Tracking the Item
Inventory tracking focuses on the movement and location of products. It’s about knowing where each item is, where it’s been, and when it moved.
Examples include:
- Tracking a product from receiving to storage, picking, and shipping
- Monitoring lot or serial numbers for quality control or recall readiness
- Recording stock levels in real time to prevent overstock or stockouts
In industries like pharmaceuticals, aerospace, or food manufacturing, tracking is critical to product safety and compliance. If a recall is needed, tracking systems can quickly identify affected batches and where they were shipped.
Inventory Traceability: Tracking the Person
Inventory traceability is about who interacted with the inventory, when, and how. It links human activity to specific inventory events.
Examples include:
- Logging which operator picked or packed a particular order
- Requiring operator login or badge scans for tool access
- Monitoring usage of shared items like consumables or safety equipment
Traceability is crucial for accountability, loss prevention, and evaluating performance. In high-security or regulated environments, it can also help prevent errors, theft, or non-compliance.
ASRS systems with integrated software, such as Kardex Power Pick, combine both.
They record item movements while logging operator actions through password-protected access or ID scans. This dual capability is especially valuable in industries where compliance, uptime, and accountability are essential.
Signs Your Tracking Process Needs an Upgrade
If these problems keep recurring, your tracking tools and storage workflows may no longer match the demands of your operation:
- Stock is available only on screen: Employees regularly cannot find items listed in inventory.
- Records need constant correction: Counts repeatedly reveal discrepancies that no one can explain.
- Updates lag behind activity: Receipts, moves, and picks wait for later data entry.
- Finding inventory depends on specific people: Employees rely on experienced coworkers to locate stock.
- Teams juggle conflicting records: Spreadsheets, software, and separate locations show different quantities.
- Growth creates more manual work: Each increase in SKUs or orders adds searching, checking, and reconciliation.
These patterns can help identify where connected inventory software, clearer location control, or automated storage could reduce the work required to keep stock accurately tracked.
Practical Tips for Keeping Track of Warehouse Inventory
No matter what size your warehouse is, the foundation of effective inventory tracking lies in consistency, visibility, and control.
But what does that mean in practice? Here are several tips from our team of warehouse experts to help you maintain accurate inventory:
1. Use Barcodes or RFID for Every Item
Barcodes may be a hefty lift to implement, but they are absolutely worth it. To keep better control of your inventory, label all products, bins, and storage locations with scannable codes. Labels ensure fast, accurate updates during receiving, picking, and shipping. Barcodes are really hard to mis-scan. So you can use them to help reduce manual entry errors.
2. Implement Cycle Counting
Cycle counting isn’t just a trend. Rather than shutting down to do a physical inventory once or twice a year, cycle counting encourages smaller, more frequent counts by product category or location. This keeps your data fresh and catches discrepancies early.
You can learn more about cycle counting methodology in our blog here.
3. Standardize Your Storage Locations
One simple tip you can implement this week is to use consistent labeling for shelves, bins, and zones. Then, pair this standardization with your digital location tracking so that every item has a designated "home" in your system. And so that everyone knows where to find it.
4. Restrict and Track Access
Dealing with restricted or expensive inventory? You may want to consider limiting inventory access to authorized personnel and requiring logins or ID scans for picking and putaway. Restrictions not only improve traceability but also significantly reduce shrinkage and misplaced items.
5. Automate What You Can
Automation isn’t just for massive distribution centers. Even small levels of automation, like barcode scanning or automated reorder alerts, can make a massive impact on your operations. And consider investing in ASRS systems if you need faster fulfillment, real-time updates, or space optimization.
That investment can go a LONG way.
Did you know that 33% of Kardex users saw ROI on their Kardex Remstar ASRS in the first three months? And 80% saw ROI in the first year?
6. Keep Your Software Updated
This one is no secret. Outdated inventory software can lead to sync issues, missing features, and security vulnerabilities. Ensure your system stays current to take advantage of improvements and maintain data accuracy.
7. Set Clear Processes and Train Your Team
If your processes live in the heads of your warehouse team, it’s time to document. Turnover is higher than ever, so it’s not a good idea to rely on historical knowledge. Start by documenting your receiving, picking, and inventory adjustment processes. And make sure that you train all warehouse staff to follow the same workflows. This consistency is key to maintaining inventory accuracy over time.
How to Get Started With an Automated Warehouse Inventory Tracking System
If you’re ready to throw your laptop out the window (with your inventory spreadsheets included), then implementing an automated inventory tracking system is right for you. But how do you get started?
We asked our team of warehouse automation experts for their top tips. Here’s what they came up with:
1. Assess Your Current Challenges
Start by identifying where your biggest inventory issues arise. Are you frequently over- or understocked? Are items getting lost or misplaced? Do audits take too long? These pain points can help to guide your priorities.
2. Define What You Need to Track
Consider both inventory tracking (where items are) and traceability (who handles them). In regulated or complex environments, both are critical. But if you’re a smaller or scaling operation, you could get started with a smaller system that’s ready to scale alongside you. (More on that later.)
3. Evaluate Software Solutions
Next, you need to decide whether a standalone inventory system, WMS, or ERP integration best fits your operation. It’s a big decision. That’s why you need to know what’s important for you to track in the short and long term. When evaluating, look for features like:
- Real-time updates
- Barcode/RFID compatibility
- Location-level tracking
- Integration with automation (if needed)
4. Consider ASRS for Built-In Tracking
If you're struggling with space, speed, or labor constraints, ASRS solutions offer built-in tracking and traceability features. (Not to mention, significant space and labor savings...) Vertical Lift Modules, Vertical Buffer Modules, and Carousels track every movement, update inventory in real time, and require user authentication for added security. They’re perfect for small, medium, and large operations. Their modular and interconnected setup means you can start small and grow to multiple units (or multiple locations).
Learn more about how in our guide to improving inventory management with ASRS.
5. Choose a Scalable System
Whether you’re operating one warehouse or multiple, your tracking solution should be able to grow with you. Systems like the Kardex Power Pick System allow for modular expansion, user-based access control, and centralized inventory visibility. This makes them ideal for long-term growth. And it easily integrates into your WMS and ERP, so you don’t have to uproot your entire system.
Take Control of Your Warehouse Inventory
Better inventory tracking gives employees less searching and checking to do, while providing the business with dependable information for purchasing, replenishment, and fulfillment. The next step is identifying how software and storage technology can support those improvements within your existing operation.
Seeing a system in use can help your team understand how the transition would affect daily work. As Jeff Peters, Regional Business Director at Kardex Remstar, explains:
“The biggest worry is the same one everybody has: change. How will employees react? Will they miss the old way? That’s exactly why we bring prospects to see a system running at an existing customer’s site.”
Kardex can assess your inventory, storage layout, and workflows to help identify an appropriate solution and arrange a visit to an existing customer installation.
Contact Kardex to explore a warehouse inventory tracking solution that fits your operation and supports its next stage of growth.