An overview of inventory management
An inventory management system is a software system that is used for tracking inventory levels, orders, sales, and deliveries. It may be used in the manufacturing industry for creating a work order, bill of materials, and other production-related documents. Organizations use the inventory management system to prevent overstocking and outages. Basically, it is a tool used for organizing the inventory data that were usually stored in a hardcopy form or in spreadsheets. The key components that work together to create a complete inventory of organizations’ system include reorder point, asset tracking, service management, product identification, inventory optimization, etc.
Below is some information to help you understand the inventory management system.
- An inventory management system is a system that identifies every inventory item and its related information, which includes barcode labels or asset tags.
- It has hardware tools used for reading barcode labels, such as handheld barcode scanners or smartphones with barcode scanning applications.
- The important functionalities of an inventory management software include a central database and point of reference for all inventory, generating reports, having the ability to analyze data, forecasting future demand, and much more.
- Additionally, it must have the processes and policies for labeling, documentation, and reporting. This must include an inventory management technique like just in time, ABC analysis, first-in-first-out (FIFO), stock review, or any other proven methodology.
- People who are trained in following these policies and processes must also be a part of an inventory management system.
What are the benefits of an inventory management system?
- Without a proper inventory management system, the goods and products and the related processes that flow all through the company will surely be in disarray.
- This system enables an organization to maintain a centralized record of each asset and item in control of the organization.
- It provides a single source of information for the location of every item, vendor, and information of suppliers, their detailed descriptions, and the total number of a particular item that are currently in stock.
- Due to the fact that an inventory mostly consists of movable assets, an inventory management system is responsible for keeping track of current stock levels and understanding which items are moving quickly and which are slow moving, which in turn enables the organizations to determine when it’s time to reorder the items with greater accuracy.
- In all, an inventory management system offers countless benefits to the companies that include an improved cash flow, better reporting and forecasting capabilities, reduction in storage costs (overhead), reduced labor costs, reduction in dead stock, better organization, enhanced transparency, and improved supplier, vendor, and partner relationships.
What is a warehouse inventory management?
- Managing a warehouse is an entirely different thing and requires different system features.
- Warehouses are most concerned about where an item is.
- The real value of warehouse inventory management lies in being able to find something easily and quickly.
- The common features that you may see are in a warehouse inventory software are advanced barcode systems supporting QR and other standards, multiple location support, shelf and bin tracking systems, and order picking support
- Through this system, you can order more inventories and pick existing inventory for customer orders.
- You can also set restocking levels so that you never run out of stock with an important item.
Which are the best inventory management software?
Some of the best inventory management software are:
- Zoho Inventory
- HDPOS Smart Accounts and Billing
- MARG ERP 9+ Inventory Management System
- CAMS Exact Inventory Management Solutions
- Astral inventory management system
- EAMbrace inventory management
Which are the best practices for the inventory management systems?
- It is clear that a good inventory management system helps in enhancing productivity, but only if you set it up with some basic essentials including location names, easy-to-read location labels, unique item identification numbers, units of measure, a starting count, a software that efficiently and effectively monitors and tracks activity, a clear company-wide policies and processes, and individuals who know how to support these policies and processes
- Implementing a good inventory management system can be a complex task. It is not only a matter of purchasing a good software program, but an inventory management system must also be able to address the people, processes, and technologies from end-to-end.
- Following the best practices for setting up a complete and company-wide inventory management system is an investment that will pay for itself again and again through greater efficiency.