8 essential features of an inventory management software
What is inventory management?
In the business world, inventory management plays an important role in maintaining a balanced logistic network in terms of product delivery, storage, availability, etc. Inventory management is done to manage the sourcing, storing, and selling of the inventories; both raw materials and finished products. In a layman’s language, you can say that inventory management is nothing but maintaining the right stock in the right quantity at the right place at the right time and at the right cost.
Let us understand it from one example. Ahmed commences a new business of selling gift items. He has multiple suppliers who provide him items in bulk, some of which have to be segregated repackaged.
Ahmed makes an Excel spreadsheet and updates it every time he places an order for more stock, packs the item, or finishes a sale. It is his small version of the Inventory Management System.
Why is the inventory system important?
Any business that has to deal with inventory or stock will require a system that can assist in tracking and controlling the management drill. Without a reliable system, you will be dependent and operating completely on an ad-hoc basis, and soon your business lands in situations where your business either is overstocked or understocked.
Inventory systems help you track and know the amount of inventory or ingredients you need. Otherwise, you may end up with either excess stock, or lack of stock and fail to meet customer demand.
Though deploying a reliable inventory management system is crucial, you need to choose the perfect inventory management software for you. A technology is leverageable only if you know how to use it and only when you have chosen the right one. Stay tuned until the end of the blog to understand how you can choose the right inventory mam cement software and how you get benefited from it. You will also come across a few important Inventory Management terms.
If you have a product-based business, The vitality of inventory management cannot be overlooked. It adds efficiency and longevity to the operations.
Clear inventory management practices will help in:
Reducing costs
Have you heard of the term Economic Order Quantity? If you wish to use inventory management software to reduce the cost of operations, EOQ is of help. An inventory management system that you choose must have this feature. EOQ helps you find out the most cost-effective method for ordering new products by comparing the costs of storing these products versus the cost of ordering the products. Advanced inventory management software will do this for you automatically without requiring human efforts. This way you can minimize the cost of warehousing and save money.
Optimizing fulfillment
Providing positive customer service
How does it feel if you order something and it is out of stock? If you as a business do not want to hear NO from the suppliers. Your customers expect the same. You can not keep them waiting just because you lack the necessary inventory. Plus, you do not want to keep and sell those in inventories that are damaged or send the wrong item altogether. Customer loyalty is crucial. You want to meet every customer’s demand with the utmost professionalism and quality standards without suffering any losses. Here, the inventory manager t helps as every inventory is tracked.
Improve order accuracy
Most of the professional inventory management software in the world is easy to integrate with other software. This feature helps businesses to run a well-organized warehouse that tracks and monitors every stock or product. This way, you can pull the exact order of your customer and use the right amount of inventory from the warehouse to meet the demands. You can also enjoy the logic features of some of the software that let you check if the order is delivered in time without any damage.
Integration
The right inventory management software can be integrated with other business processes such as
Point-of-sale (POS) systems: to know the stock levels in real-time and make stock or demand forecasting.
Bookkeeping systems: To evaluate the working capital of the business and make inventory decisions accordingly.
Accounting systems: To find the most EOQ.
&
Customer relationship management (CRM) systems.
Preventing damages from theft, spoilage of the products, and returns.
Data received while deploying and running inventory management activities will help your organization understand its financial standing, customer behaviors and preferences, product and business opportunities, future trends, and more.
Benefits of Inventory Management:
Efficiency & Productivity in Operations:
Inventory management takes care of the product availability whenever and wherever it is needed. This boosts productivity, saves time, and brings efficiency.
Minimize Costs, Maximise Sales & Profits:
On-time delivery of the products, enough quantity of products in the warehouse, is possible with efficient inventory management.
Integration of Entire Business:
Inventory management software helps in user management, the collaboration between team members, and everyone has full visibility of the status of the order, and the accountant gets to filter the orders as per the shipment status.
Automation of Manual Tasks:
The inventory management system reduces the need for human intervention in the process.
Keeping Customers Happy:
When customers get ordered products/goods on time, the satisfaction level is high and the customers are happy with the services of your organization too.
Top Features of Inventory Management System
Inventory Management
The module is built to keep your primary and required distribution center capacities centralized so that you can monitor each and every inventory-related detail like stock level, product history, product determinations, etc. The information syncs with every other data in the inventory management system to help you operate the product stock accurately, boost productivity and increase collaboration within the team even, irrespective of the geographical or operational level distances between them. You can get real-time details of all the categories of the products.
With the automated reports on the level/volume of the stocks in the capacities, you can control any inventory related issue quickly and in time. Alerts and reminders help you manage unwanted inventory occurrences such as lack of stock, damaged stocks, etc. The inventory management system is crucial for those who have an eCommerce presence at multiple locations. Inventory Control features allow you to do the following:
Tracing product cycle and inventory cycle.
Categorization of inventories
Measurement of products & their history
Vendor management
eCommerce management, etc.
Inventory Tracking
As we have seen above one of the essential features of inventory management systems is keeping track of every product. Barcode scanning does it better and allows your organization to understand inventory accurately in terms of asset serial, RFID, and other important things. Inventory tracking allows the supervisor to know real-time data of everything. Following are the things you can do with inventory tracking:
Product tracking
Tagging
Reports and audits
Reporting Tools
If you are to do a hardcore inventory business you already must be aware of the importance of real-time data of every product in your warehouse or under your control. Inventory business demands updated data from you at every step in terms of product name, product history, driver’s whereabouts, the order placed, order delivered, the order under process, shipment, and more. Multiple features available in the inventory management system makes it possible to keep track of all the things and make a report. Reporting tools available in the system allows in smooth and flawless communication, increased productivity, reduced errors.
Inventory Forecasting
As an inventory business for an organization dealing in inventory management you do not want to disappoint your plans by lacking in providing the required quantity of inventories whenever demanded. When you are using inventory management systems to keep track of all the orders you get to know which customer prepares which product in how much quantity, how many times. You want to keep inventories ready for them. Inventory forecasting helps in finding out if any product is going out of stock and if there is any product that is in abundance. If your customers are getting what they demand, in time, they are happy. Another importance of inventory forecasting is that you get to spend your resources wisely after knowing and understanding the sales in the present and future time.
It becomes easier to make buying decisions such as how much to buy and what to buy. Inventory forecasting defines:
Future insights
Integrated sales and marketing.
Reduced risk of going out of stock.
Less holding costs
Maximized efficiency.
Barcoding & Tagging
Barcoding and tagging are done to keep track of the inventories and minimize human errors that usually occur during the data collecting process. Entering inventory data ( data of each product) manually in the system is subject to a lot of time and human errors. Barcode scanning on the other hand does it in less time with maximum accuracy.
Deploying a barcode scanning system is handy as it is easy to use, it decreases employee training time, it is fast and accurate. It gives you more control over the inventory movements and warehousing activities. Tracing products, pricing, and details become easier. If you have an e-commerce venture, barcode scanning is the must-have. Tagging helps you in categorizing products under different tags and searching for them using these tags. Its benefits include:
Better and faster performance.
Scan the barcode easily.
No human errors, no wastage of time.
Get precise product details.
Locate products.
Inventory Alerts
The inventory management system caters to the users with multiple features and facilities, inventory alerts is one such feature. The traditional way of tracking inventories and keeping an eye on the data is crucial to know about the unwanted occurrences well in advance. These alerts needed to reach you on time. Automated alerts make it possible.
You can optimize your inventory levels, drive as, manage investments, control operations, and more with right-time automated alerts.
Inventory Security and Backups
If you are into a core inventory business or you are simply a supervisor controlling a warehouse, it is very important to have the right security for your inventory. Having an inventory management app deploys proper solutions in place. Write from protecting your product data it takes care of everything with adequate backup.
Cloud-Based:
When you deploy cloud-based inventory management solutions, you can access the inventory-related data anytime from anywhere, and from any device that has an internet connection. It allows you to monitor inventory movements in real-time. Given the access to all the concerned employees means you no longer have to spend time in accumulating and sharing the data. It is available to all the employees and coordination in operations can be expected along with faster decision-making processes and accuracy of results.
Integrating your inventory with a cloud ERP system would help in:
Savings cost
Real-time updates
Easy access to all
Safe and Secure
Better coordination
Understand more about cloud systems: Cloud vs On premise
A smart inventory management app will also come up with IoT integration, ERP integration, etc.
In short, deploying an inventory application demands the right features for your business. Defining the right features for your business demands knowing the exact concept of your business and the purposes behind deploying an inventory management system. You also have to find the right inventory management app development company which will help you get the right solutions. You need to confirm everything from your side before choosing a reliable inventory management system. The UAE based company named TrueBays has been catering to the market with its smart solutions.
How to choose the perfect inventory management system for your business?
The following questions can help you know which inventory management system is good for you.
What type of business are you?
If you are a small business, your operations are not as complex as larger businesses. You can manage your inventories easily with simple software. For larger businesses more advanced versions of inventory management solutions are needed.
What are your objectives?
Create a list of challenges your business faces often and then the goals you have set in which inventory is required to be managed properly. It can be anything from reducing inventory costs, accurate and real-time tracking of inventories, streamlined workflow, more profit, etc.
Features you are looking for?
Your must-have features list will depend on the type of products you deal with.
What is your budget?
Depending upon your budget, buy software that offers all the necessary features within the budget and priorities. Paying for essential features will add to your productivity and profit.
What channels do you cater through?
If your business is selling through multiple channels, you should go for software that is capable of handling more than one channel and its complexities.
What integrations does your business need?
Do for a software that offers cloud-based and ERP inventory management systems along with integration with other prime apps or software like logistic providers, shipping providers, accounting, other custom integration, etc.
Who needs access to the software?
You are recommended to provide access to every party that has to deal with inventory daily and make decisions based on it. If the parties who require access are large in number then you are suggested to use a Cloud-based solution.
Key Inventory Management Terms
3PL: Stands for third party logistics, it is when businesses utilize an outside company to manage a warehouse/ warehouses.
Advanced Shipping Notification: It is a document that is shared with a warehouse management system that holds information about a pending shipment.
Barcode: It is a marking made up for the identification of products.
Batch picking: an order picking process in which multiple orders are picked by a single picker.
Bill of Lading: A document of receipt of shipment.
Cross Docking: A business practice of shifting products directly from the receiving pace to the shipping place.
Discrete picking: The order picker picks all the items for a specific order. It is ordered centric
Line: The products with the same SKU.
Putaway: Process of removing incoming orders from the location where it is received to the place of the final storage.
Zone picking: Order picking is done based on the specific storage area.
Lost Sales – When customers cancel their demands as they are not met.
Pipeline Stock – Orders that are moved from one place to another
