What's the Difference Between Inventory Management and Asset Tracking?

inventory management vs asset tracking

Some terms can come across as describing essentially the same thing. For example, you might describe an object as weak and fragile, and it may seem like those two things are the same, but they could actually be taken in two completely different ways. Weak might mean in one person’s mind that it can’t handle much stress or weight while fragile might mean in another person’s mind that it will break if handled improperly. Close, but not identical. The same is true of antonyms for those words, like strong and resilient. Strong can mean that something is able to handle a lot of pressure at one time while resilient might mean that it can endure pressure over a long period of time. Those two concepts are similar and even related to each other, but they are not necessarily describing the same thing.

It is easy to get confused when attempting to explain two seemingly similar yet distinct ideas. That is why it is so important to be careful in our words and make sure that we clearly define our terms. And so this brings us to the topic of inventory management and asset tracking. These are two things that refer to the monitoring of items that are necessary to do business with, but they differ in crucial ways. When discussing each one, you will find that you will need to modify your mindset ever so slightly to avoid confusion. Without further ado, let’s begin exploring the difference between inventory management and asset tracking.

Inventory Management vs. Asset Tracking

How is inventory management different than asset tracking? In several key ways. Inventory management focuses on monitoring all of the parts and products that a company has moving in and out of its warehouses, stores, and other facilities. Asset tracking, on the other hand, focuses on keeping track of items and equipment that an organization needs in order to function properly.

Do you see the important difference between the two? Inventory management is all about identifying, counting, and keeping an eye on items that are ultimately intended to be sold to customers. It is not focused on the shelving units that those items are located on, but the items themselves. Asset tracking, by contrast, is much more focused on the shelving units that the items are located on. It deals not with transactions, but with usage. How are items and materials being used in order to facilitate the organization’s daily operations?

Let’s dig a little deeper into this comparison by comparing the many nuanced similarities and differences of inventory management and asset tracking.


The overall purpose of these two things is the same. Both inventory management and asset tracking help groups effectively use their resources. A company whose goal is to sell products can use inventory management to make sure they have the right number of goods on hand to meet demand. They do not want to have too many goods on hand because that can lead to product spoilage as unsold items pass their expiration dates and become unsellable. It can also lead to higher carrying costs as valuable warehouse space is taken up by goods that sell slower than other goods. However, they also do not want to have too few goods on hand because that can lead to plenty of other problems, such as shortages and displeased customers. They need to find a happy medium between these two extremes, and that is the job of inventory management.

Large organizations, such as health agencies and other government organizations, which are not necessarily focused on selling goods but on providing services can use asset tracking for a similar purpose. They want to make the best use of their budgets and maximize their effectiveness in serving people. Asset tracking allows them to find healthy equilibrium in their asset quantities.

In both cases the goal is to optimize their operations, even though those operations are very different. Companies and nonprofit organizations want to cut costs, save time, and make the best use of their budgets. And they can do this with the help of inventory management and asset tracking, respectively.


Intriguingly, the very things that seem to unite inventory management and asset tracking together can also be seen as the very things that push them apart. Businesses use inventory management software to replenish their supply of products that they plan to sell to customers. Government bodies and nonprofit organizations use an asset tracking system to control their supply of internal tools and materials, rather than a flow of products coming in and going out.

As we have already covered, the goal of inventory management and asset tracking is the same, but the ways in which these two things are used are quite different. Inventory management is like a bookstore in which everything is for sale and books come in and go out, never to return. Asset tracking is like a library in which none of the books in it are for sale, but they are simply meant to be used and returned. As you can see, this is a major difference because library books are entirely distinct from bookstore books. At a bookstore, books are presented in beautiful displays as a way to entice buyers to them while in a library they are all simply stacked in a neat manner for easy access. Anyone can find what they are looking for quite quickly, but there is no sense of urgency to find anything.

The inventory management or asset tracking tools that these two systems use reflect the differences in their needs.

Which one is right for you?

As we have discussed at length, inventory management and asset tracking have many similarities and differences. Hopefully now you understand just what they are. To find out which solution is right for you, get a free trial of Fishbowl Manufacturing or Fishbowl Warehouse by clicking the link below. Both of these solutions can be used as standalone asset tracking solutions or as QuickBooks-integrated inventory management solutions.

TL;DR Summary

Inventory management and asset tracking are similar in that they are both focused on tracking items a business or other organization orders, receives, stores, and uses in its operations. The difference is that inventory management is focused on products that will be sold while asset tracking is focused on resources that are used internally and not sold.

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