Operating an efficient stock management system is a meticulous but critical task. Inventory management affects everything from purchase orders to operating costs to order fulfillment to customer satisfaction.
If poorly conducted, the entire supply chain can fall apart. Those who have several warehouses or operating locations across the country especially understand the importance of accurate asset tracking.
Thankfully, there are intuitive and cloud-based inventory optimization solutions that automate many of these tasks and free up valuable resources. Here is the essential information to know about software solutions and their benefits.
What is Inventory Management Software?
Inventory management software encompasses all of the applications that track stock levels, orders, sales, and deliveries. This technology helps to organize and manage data in real time so businesses avoid overstocking and/or understocking.
Before the prevalence of cloud based inventory software systems, spreadsheets and ledgers were used to manage inventory data. Now with a few clicks, management can employ multi-channel barcode systems or radio frequency identification to check if new supplies have come in or if an item has been delivered.
With increased functionality, inventory tracking software saves small businesses resources and money by automatically counting stock and analyzing data to find inefficiencies or discrepancies in the supply chain.
Accurate inventory accounting streamlines different workflow processes that were once hindered by manual inputs and human error. Companies now know exactly how much inventory is on hand and what is necessary to fulfill current and future orders.
Inaccurate inventory data and order management lengthens the time between the initiation and completion of a project. A longer lead time has a ripple effect on the company's ability to handle changes in demand or the market. As inefficiency and unproductivity increase, so will customer dissatisfaction.
An automatic inventory management software system shortens lead time, increases efficiency, and improves customer satisfaction. This helps to maintain a competitive advantage and generate more revenue over time.
The Benefits of Inventory Management Software
Businesses can use the benefits of an inventory management software system to manage pain points. The most essential advantages include-
Accuracy and Efficient Warehouse Management
Unfortunately, more than half of companies don't practice accurate inventory reporting. Considering the damage caused by unreliable data, it's surprising that more employers don't find more efficient solutions.
Those who use an inventory management system can decrease their held inventory by consolidating stock efficiently and not overordering. Many businesses have saved money because they no longer need all of their warehouses.
Because of its ability to accurately manage inventory, software management solutions have allowed some to create a lean inventory strategy and only keep what they need on hand. This allows businesses to slim their inventory, lower carrying costs, and decrease clutter in the warehouse.
Because asset management solutions make fewer errors, there are fewer resources directed towards fixing problems. This equates to spending less capital on damage control and having more cash-on-hand to invest in other areas of the business.
As inventory control software solution identifies the correct number of a certain item, management can be assured that the essential products are automatically set up for re-order. Businesses use this cost-savings opportunity to invest in new products and decrease their carrying costs.
Companies will also cut back on labor costs because software functionality performs much of the work itself. Fewer workers are needed to sort through clothes, count items on a ledger, or prepare a shipment.
Improved Inventory Data Visibility
Through barcode scanning and easy inventory data management in a centralized database, there's greater visibility to analyze what's happening in the company. Management can now answer the following questions-
- Where is the stock going and who are the customers purchasing these items?
- How can utilizing an inventory software solution enhance workflow processes?
- How does demand define who the customers are and how can marketing be tailored towards those customers?
Track Inventory Properly
Without regular inventory checks, businesses tend to purchase too much or too little stock from suppliers. Having too much stock increases carrying costs and having too little stock may frustrate some customers.
An inventory management software system can streamline supply chain processes and balance out the stock supply. For example, if a certain ingredient tends to run out faster than others, users can set up reorder points that automatically purchase more of that ingredient when the supply gets low.
Some inventory processing features allow businesses to automate certain tasks that require manual labor such as inputting product numbers on a spreadsheet. This makes it easier to boost productivity by increasing the number of potential scans in a day/week.
As a result, workers can spend more time completing other projects and less time scanning boxes or inputting data. Over time, this will help a small business save money while freeing up resources to increase productivity.
Manage Inventory Across Warehouses
Larger businesses can benefit tremendously by using an accounting software solution to consolidate warehouses and decrease their inventory levels and carrying costs.
It's also easier to manage multiple locations because tracking software can apply to each separate warehouse and manage them individually through one location. This allows businesses to gain a greater understanding of their supply chain processes and improve decision-making across all locations.
The key takeaways about utilizing a software management system include-
- The best inventory management software system encompasses everything from ordering, deliveries, sales, and managing stock levels.
- Utilizing a software solution streamlines workflow processes and improves inventory data accuracy for small and large businesses
- The most important benefits of an inventory management software system include an increase in accuracy and efficiency, reduction in costs, improvement in reporting analytics, more balanced stock levels per month, and the automation of menial tasks.