Inventory management is a critical aspect of retailing. Effective stock management allows a retailer to maximize sales, minimize costs, and ensure a certain level of customer satisfaction. In inventory management, one fundamental distinction lies in the inventory method used: serialized or non-serialized. But what is the actual difference between the two?

Serialized inventory tracks and records each item individually, whereas non-serialized inventory groups them into categories.

The Major Differences Between Serialized and Non-Serialized Inventory

Beyond their basic definitions, there are several differences between serialized and non-serialized stock. This article highlights five major differences that are important to keep in mind when considering an inventory classification method:

  1. Item identification in inventory
  2. Inventory tracking
  3. Stock management
  4. Complexity of inventory management
  5. Item traceability

1. Item Identification in Inventory

The first significant difference lies in how items are identified within the inventory. Serialized inventory records each item individually, assigning a unique serial number to each one. Each item is therefore tracked individually. 

In contrast, non-serialized inventory groups items into batches or categories without assigning individual serial numbers. Thus, individual items are not traced, but rather types of items.

2. Inventory Tracking

The identification of items in inventory leads to another difference: their tracking. With serialized stock, since each item is recorded with its own serial number, tracking can be done precisely. This allows for granular stock tracking, providing detailed visibility into each specific item in stock. 

On the other hand, tracking non-serialized inventory is done at the batch or category level chosen by the retailer, resulting in less precise, more general tracking.

3. Stock Management

Another major difference between serialized and non-serialized inventories is stock management

Serialized inventory allows for more precise stock management due to individual identification by serial numbers. This is particularly useful for high-value items, those subject to strict regulatory requirements, or similar items with differences that need to be tracked. 

Non-serialized stock, on the other hand, offers much more general management and is better suited for retail stores with non-critical items or those where individual tracking is not necessary.

4. Complexity of Inventory Management

Another noteworthy difference is the complexity of the two methods. Serialized stock is more complex to manage due to the individual tracking of each item. Therefore, appropriate software is essential to facilitate the management of serialized inventory, such as the point of sale software Alice POS

On the other hand, since items in non-serialized inventory are grouped, it is significantly simpler to manage, reducing the administrative burden on the retailer compared to serialized inventory.

5. Item Traceability

Finally, the last major difference between these two methods lies in inventory traceability. Although serialized stock is more complicated and time-consuming, it offers greater traceability of items throughout their lifecycle, which can be important for quality or safety reasons depending on the products sold. In the case of non-serialized inventory, traceability is limited to the batch or category level, which may be adequate depending on the company’s needs.

The choice between serialized and non-serialized stock will vary depending on the retailer’s needs and requirements whether optimizing stock management or item traceability.

Advantages and Disadvantages of Serialized and Non-Serialized Inventory

The major differences between these two inventory classification methods result in advantages and disadvantages specific to each, depending on the needs of the businesses that use them.

Advantages of Serialized Inventory

As discussed earlier, serialized inventory offers improved product traceability. Each item tracked individually by its serial number is precisely traced throughout its lifecycle, promoting product quality and safety.

It also allows for fine stock management by providing precise data on the movement of products within the inventory, helping to avoid surpluses or shortages. Serialized inventory thus leads to strengthened asset control.

This method also offers enhanced regulatory compliance. In some sectors, serialized inventory is required to comply with strict regulatory standards.

Disadvantages of Serialized Inventory

Serialized stock, however, leads to increased complexity in usage since it requires individual tracking of each item. This is often more challenging to manage and requires more sophisticated systems and processes.

Such a method therefore entails additional costs since the retailer must establish and maintain a serialized inventory system, which can result in additional costs in terms of hardware, software, and labor. With Alice POS, reduce your management costs while improving efficiency. Request your demo!

The administrative burden is also greater. Serialized inventory requires assigning a tracking number and data management for each individual item, consuming a significant amount of time and resources.

Advantages of Non-Serialized Inventory

Non-serialized stock, on the other hand, offers greater simplicity. It is easier to implement and manage due to batched items, greatly reducing operational complexity.

This method also reduces costs related to stock management. It is generally less expensive to implement and maintain due to its simplicity, which is advantageous for stores that do not need to track each item individually.

Disadvantages of Non-Serialized Inventory

Despite the appeal of simplicity, it’s important to note that non-serialized stock offers much less traceability. Item tracking is limited to the batch level, resulting in less precise traceability that can compromise product quality and safety.

This lack of traceability obviously leads to less precise stock management. Since product data is not available at the individual level, various inefficiencies in stock management may be observed.

In summary, the choice between serialized and non-serialized inventory depends on the specific needs of a business in terms of traceability, stock management, and regulatory compliance, as well as the resources available to implement and manage each system.

Examples of Serialized and Non-Serialized Inventories

Now that you understand the differences between serialized and non-serialized inventory, it’s natural to wonder: which types of retail stores use each of these methods?

In the case of serialized inventory, stores often use it for inventory of high-value products or items too unique to be placed within a category. This includes stores selling used goods, hunting and fishing stores, electronics stores, and even aircraft manufacturers.

For example, at Apple, each iPhone, iPad, or Mac is assigned a unique serial number to enable precise tracking from manufacturing to sell to the end customer. Aircraft manufacturers such as Boeing and Airbus use serialized inventory systems to ensure full traceability of the parts composing their aircraft, which is essential for safety and maintenance.

Non-serialized stock is more useful for retailers of common products, such as clothing stores, pet stores, supermarkets, or construction materials wholesalers.

For instance, large-scale supermarkets like Walmart categorize their products (e.g., fruits and vegetables, dairy products, etc.). The same goes for companies selling bulk construction materials like wood, cement, or bricks. These are stores that manage their stocks in quantities rather than individual items, making a serialized system less practical for their business model.

No matter what type of inventory you have, Alice POS helps you manage it. Request a free demo now to discover the benefits of our software in terms of inventory management!

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