chemical inventory management

Chemical Inventory Management Systems: The Pros and Cons

Whether your facility has ten chemicals or ten thousand, it’s important to maintain an accurate inventory of the hazardous materials onsite. That said, chemical inventory management is easy when you only have ten chemicals, but the challenge grows as the scale increases.

In either case, taking the time upfront to develop an efficient chemical tracking system will save time, money, and minimize frustration in the long run.

Why Is Chemical Inventory Management Important?

  1. It’s required by the OSHA HazCom StandardPer OSHA, your chemical inventory must cover all hazardous materials in your facility regardless of physical state (solid, liquid, or gas). Additionally, if your facility has manufacturing or synthesis processes that produce chemical intermediates, you may also need to account for those materials in addition to hazardous reagents and final products.
  2. It helps ensure the appropriate Safety Data Sheets (SDSs) are on file – An accurate, real-time chemical inventory is the best way to guarantee you have adequate safety documentation available. Your active SDS file should represent all materials currently onsite. It shouldn’t be a collection of SDSs for every chemical your organization has ever ordered. Instead, SDSs for materials no longer onsite (and outdated versions of revised SDSs) need to be regularly removed from the active file and placed into an SDS archive. These SDS archives must be kept for 30 years. Given the complexity, an effective chemical inventory management system will streamline this process.
  3. It provides a basis for tracking compliance with regulatory limits – Many hazardous material classes are governed by regulatory limits. For instance, applicable regulatory standards may come from the International Building Code, NFPA, or state and local ordinances. These standards may place limits on the quantity of flammables, oxidizers, explosives, corrosives, compressed gases, cryogenic gases, or other hazard classes that can be used or stored in the facility. When this is the case, a proactive chemical inventory becomes essential for tracking quantities and demonstrating regulatory compliance.

How To Improve Your Inventory Tracking System

Many organizations struggle with proactive chemical inventory management. It’s common for a facility to start with a small, manageable chemical inventory, only to have it quickly expand beyond the capabilities of the initial tracking system. In these cases, it can be far more time consuming (and costly) to go back and reconcile an out-of-date inventory than it would have been to implement a comprehensive, proactive system from the start. In the long run, the efficiency, safety, and compliance benefits are well worth the initial time (and cost) investment.

Three common components shared by effective inventory systems include:
Organized Ordering

Strong inventory tracking systems limit the ordering of chemicals to a few authorized individuals or use a program that requires review and approval by an inventory manager. In addition to inventory tracking benefits, these policies also reduce the likelihood of ordering unwanted chemicals and/or materials that aren’t permitted at your facility.

Centralized Receiving

The most efficient programs have dedicated receiving locations for each area of the facility. While this is particularly important for barcoding systems that require manual addition of tags or labels, all programs tend to benefit from management systems that require the chemical to be added to the inventory before the material is placed into the appropriate storage location.

Deliberate Disposal

No matter how well you track incoming chemicals, your chemical inventory system will not be accurate without an effective method for tracking chemical disposal. While barcoding methods can make this easier, there are certainly effective alternative that don’t come with a high technology cost. Something as simple as an empty container collection bin can ensure chemicals are removed from the inventory in an efficient manner.

Chemical Inventory Management Resources and Technology

While there’s not a one-size-fits-all solution for chemical inventory management, there are certainly pros and cons for each option. We discuss the three of the most common inventory tracking methods below.

    1. A Simple Excel Spreadsheet: The most basic approach, but highly effective when managed properly.


      • Doesn’t require expensive software or equipment
      • Fully customizable to meet your needs
      • Ensures one or a few people have an intimate knowledge of the inventory


      • Requires significant maintenance and oversight
      • Becomes increasingly time consuming as the inventory scales
      • Requires a separate system for Safety Data Sheet management

Best for small to medium inventories operating on a tight budget.

    1. Chemical Inventory Management Software: Slightly more expensive, but effective in many contexts.


      • Automated chemical tracking based on placed orders or pre-loaded data
      • Often capable of managing Safety Data Sheets as well
      • Generally easier to start initially than the other two methods


      • Can be expensive
      • All employees must have access to the system when used for SDS maintenance (many systems have user limits)
      • May not be capable of tracking total volumes or individual containers
      • Requires disposed chemicals to be manual removed (unless paired with a barcoding system)

Flexible and scalable, but often require a monthly or annual subscription and may limit the number of accounts.

    1. Barcode, QR, or RFID Systems: The current “gold standard” for large, real-time chemical inventory tracking.


      • Most effective way to track inventories with high turnover
      • Efficient method for tracking inventory in real-time
      • Advanced systems have detailed tracking and “check out” capabilities
      • Often programmable to automatically remove containers from the system
      • Most programs can manage Safety Data Sheets as well


      • Generally the most expensive option (costs include software, scanners, and tags/labels)
      • Requires manual addition of barcodes and tags to each container
      • Damaged or removed tags can lead to system errors (especially for RFID)

May be overkill for organizations with small and medium inventories, but can be a very effective for managing larger inventories.

Chemical Inventory Review Frequency

Many safety programs default to an annual review cycle for inventory management and reconciliation, but certain conditions (such as particularly hazardous materials or tight regulatory limits) may warrant more frequent checks. Regardless of the chosen frequency, an organized chemical management system goes a long way toward improving the reconciliation process. Proactive inventory management systems save a lot of time and frustration and keep your overall program safe and compliant.


If you have any questions about strategies for improving your chemical inventory tracking system, please contact us at or to schedule a free consultation and information session.


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