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When most people think of inventory management, they think of retail applications. While retail operations rely heavily on inventory management, inventory management systems are widely used in a variety of industries, from manufacturing to utilities, healthcare, education, government, and more. Inventory management systems streamline and centralize the process for controlling the flow and maintenance of inventory to ensure that the right amount of inventory is available at the right time and of the right quality.
Inventory management systems track goods through the entire supply chain or the portion of it a business operates in. That covers everything from production to retail, warehousing to shipping, and all the movements of stock and parts between.
Practically, it means a business can see all the small moving parts of its operations, allowing it to make better decisions and investments. Different inventory managers focus on different parts of the supply chain though small businesses are usually more interested in the ordering and sales end of the chain.
Because of their wide variation in scope, inventory management systems also vary widely in cost. Software Advice’s FrontRunners report for inventory management gives you an idea of what that price/features mix looks like.
Why use inventory management software?
There are many benefits of inventory management software deriving from the usage of quality inventory management software, including accurate distribution of products and services, prompt customer service, and faster and more secure deal closure. In the ideal scenario, your inventory management system will be cloud-hosted, well-integrated with third-party management software, and available to use on mobile devices for the needs of large and decentralized teams.
Here are the main advantages of inventory management software, and the answers when your manager asks–why use inventory management software?
Centralized storage. The more stock locations you have to govern, the more difficult it becomes to manage orders and direct products to the right customers. With an adequate warehouse tool in place, you will be able to track the availability of all products and services, and thus maintain customers promptly informed on the status of their orders.
Efficient stock operations. Good inventory management is the founding pillar of any healthy retail business, as it saves both the time and effort needed to manage stock manually. With a collaborative system in action, your employees will no longer write daily reports and run back-and-forth through them to give customers an answer, but rather have data ready and regularly updated on their devices.
Enhanced sales productivity. Many companies report significant improvement of their closed deal rates upon implementing their first inventory management solution. This is so because accurate inventory prevents you from losing customers, and minimizes common human mistakes such as reporting products out of stock and referring clients to different stores.
In-time delivery. The core benefit of using inventory management software is being able to hit delivery deadlines, and preventing customers from waiting ages for their shipment to arrive. Advanced programs will even involve them in the process, giving them a realistic picture of the status of their order, and allowing them to track the product’s movement from purchase to arrival.
Adjusted order frequency. Despite of distributors perceiving stock shortages to be the worst possible scenarios, we’d ascribe that attribute to overstocks. Leaving products to waste or paying for their storage and maintenance is where businesses lose the most of their money, and that’s why inventory management software is so useful. Being able to track their actual stock supplies, companies can re-order from vendors in the right moment, or adjust the order frequency in a more suitable manner.
No more hidden costs. Another competitive edge of good inventory systems is that they adjust easily to sudden spikes in your sales, and you get to tweak them in line with sudden spikes and drops. For the purpose, you won’t have to pay extra storage fees, while in the best possible scenario you will also get a product that prepares, packs, and ships products for you.
Satisfied customers. With personalized service and accurate responses at any moment of time, your customers will be more satisfied than ever. They will be able to track the status of shipped orders, without facing the risk of a late notice that the product they expect is no longer available.
Integration with back office systems. Another way to recognize a quality inventory management system is to examine its connectivity to back office applications, in particular accounting and ERP systems which process stock related data. The best option is to purchase an open API system, as it allows custom connections to all service providers, and usually comes with the best technical support.
Accurate planning and forecasting. Inventory management systems help you plan ahead and become more proactive, as they track the status of your products, manage negative trends and opportunities, and retrieve vital historical data to predict the progress of your sales. In fact, inventory tools are most of the time packed with analytic features that free your time, and still pull off all important indicators that measure your productivity.
What are the latest inventory management software trends?
Generating specialized documents. Inventory management systems are becoming more and more capable to generate a wide range of important accountancy documents, including expense statements, personalized invoices, checks, and purchase order confirmations. In the best scenario, they will also pull out automated reports on low stock amounts, and notify all team members about it.
More efficient analytics. In near future, we should expect inventory management systems to become even more reporting-savvy. More and more tools are equipped for ERP reporting, spares management, tracking of stock expiry periods, pilferage control, and accurate demand forecasts.
No systems different than RFIDs. Like them or not, RFIDs are becoming a common place in the inventory management sector, slowly but surely eliminating their manual and semi-automated competitors. In the years ahead, inventory management systems will be able to locate individual products or even product components, monitor their quality, and tag them with special microchips that help track their movement without associating them to a particular warehouse.
