Everything you need to know about an inventory management software
Being good at tracking the goods and products you have is a sound way of keeping the business away from losses. When you track your products it is easy for you to predict how much you will be selling in the future and find them faster for your customers so that you can reorder them before you run out of stock of the product. The best way to achieve this is by using an inventory management system that is best suitable for your business. In this article, there is more information about inventory management and what are its benefits.
What is an inventory management system?
- An inventory management system is the combination of technology that is hardware and software and the processes and procedures that supervise the monitoring and maintenance of stocked products, whether or not those materials are company assets, raw materials, and supplies, or finished products that are ready to be sent to vendors or end consumers.
- It covers everything from manufacturing to retail, warehousing to delivery, and all the movements related to inventory and various components in between.
- It means a business is practically able to see all the small moving parts of its operations, which allow it to make better decisions and investments.
- Specific inventory managers focus on specific sections of the supply chain, though small organizations are generally more inquisitive about the ordering and sales end of the chain.
- Due to its wide variety in scope, inventory management systems also vary extensively in costs.
What are the features of inventory management software?
Depending on the software you choose for managing your inventory, it can offer any or all of the features depending on your requirements and budget. Each company has its own unique requirements but all the inventory management systems include the following features:
- Reporting tools
- Inventory forecasting
- Inventory alerts
- Accounting tools or tie-ins
What are the challenges of inventory management systems?
If implemented properly the inventory management system provides many positive effects by increasing productivity and efficiency. Many of the challenges related to inventory management systems are because of failing to follow the best practices or depending upon the out-dated methods like manual documentation and inconsistent storage layouts and processes. Following are some of the major challenges faced by inventory management systems:
- Integrating demand planning and inventory planning
- Training users on demand planning and inventory management software
- Change management that is dumping the old spreadsheets and paperwork
- Standardizing data
- Choosing suitable demand planning and inventory management modules, which are suitable for your business
How does the inventory management system help in increasing work efficiency?
A good inventory management system works by reducing human errors by eliminating manual documentation, and this is accomplished by making use of barcode labels, barcode scanners, and inventory management software. Inventory management increases organizational efficiency by reducing the following costly mistakes:
- Having an excess amount of slow-moving inventory in stock, which takes up valuable storage space and consumes the organization’s bottom line.
- Unexpectedly running out of stock of a crucial inventory item, which may delay the supply chain because of backorders.
- Inaccurate records like wrong part numbers and incorrect inventory counts that arise because of manual documentation errors.
- Wastage of time because of the time being spent in tracking down items that are stored in the wrong locations.
- Inventory storage that is not optimized for efficiency because of the poor warehouse or stockroom layout also increases stock picking time, which in turn increases labor costs.
How to choose the right online inventory management system?
- First, you need to assess your business and its requirements as every business is unique and one size does not fit all.
- Look at what kind of product you sell because you need to choose a platform that can handle the kind of products you stock.
- You also need to take into account how many orders you manage.
- It is also worth noting how many channels you use.
- Consider if you require a simple software or you are comfortable with implementing complex software.
- Additionally, think about your future targets and aims.
- Budget is also an important issue that needs to be considered.
- It is also worth to consider whether a system groups your orders into different categories like order status, payment status, etc. so that you can easily and conveniently manage them.
- Lastly, consider what kind of reporting do you require.