25 Dec 5 Effective Benefits of Inventory Management Software
You start your day by going to work in a warehouse or retail operation. Something is different here, however. Things aren’t right. Your first order comes in and immediately the problems begin rolling in. You don’t have enough stock to fulfill the order. Not only that, but your products are horribly organized and your deliveries are all moving out late — some of them even go to the wrong places! You wake up in a cold sweat, but you’re not worried because you already understand the benefits of inventory management software and how it can prevent this nightmare from becoming a reality.
Running a successful inventory management operation is a tough task, luckily there are systems out there that can take a lot of pain out of the process. These platforms give smaller businesses the ability to stay competitive while also aiding larger companies with their more complex daily operations. We’re going to take a look at some of the major benefits of these management platforms as well as some inventory tracking software.
What Is Inventory Management?
Inventory management, at the ground level, is just that—properly managing inventory to keep supply chains running smoothly. Customers rely on good inventory management practices to receive their orders accurately and on time.
A good storage and distribution warehouse often employs inventory management platforms to better organize and streamline their daily processes. The benefits of inventory being in the right place at the right time can drastically cut down on the resources required to get products out to clients.
While many warehouses employ an overarching warehouse management system (WMS), some niche inclusions in inventory management systems, like inventory tracking, are attractive and bring a number of benefits along with them.
If you’re already on the hunt for an inventory management system, take a look at our comparison report to see the top performers in the market. For now, let’s discuss some broad inventory management software benefits.
Benefits of Inventory Management Software
If your inventory practices are suffering or are unable to keep up with demand, adopting a management platform is a great way to turn things around. In fact, in the last few years there has been a 25% increase in the number of businesses investing in better ways to manage inventory.
Think about your company’s unique requirements and how these benefits could solve pain points slowing you down.
Inventory Accuracy and Efficiencies
Shockingly, for many retail businesses, inventory is only accurate about 63% of the time. This is a pretty low number when you realize how damaging an inaccurate order can be.
One of the most fundamental benefits of inventory tracking is that it reduces the amount of inventory that companies have to keep on hand while improving order accuracy.
By decreasing held inventory, companies can save massive amounts of cost and effort. Some companies that use a modern inventory management solution can actually close down one or more warehouse locations, and save money associated with these cost centers.
Along with the emergence of new inventory tracking software, there is the idea of just-in-time inventory. A just-in-time or lean inventory strategy involves a company closely tracking its inventory levels, and only keeping what’s needed in the immediate short-term on hand.
Companies can leverage the powerful features of inventory management and the benefits of inventory tracking software to remain agile and slim down your inventory. Adopting a few of these strategies can boost your ROI for the system you just integrated.
Cutting Costs Across the Board
As we travel through these benefits, you may notice that accuracy is coming up repeatedly, and we are going to mention it again here. Fewer errors mean fewer resources spent fixing them after all. More accuracy equals fewer errors which also equals less expenditure on damage control.
Organizing inventory also cuts back on money spent housing unnecessary items. As the system identifies the proper quantities of certain products, inventory managers can rest knowing the important things are set to renew automatically. This opens up room for a wider array of products and cuts back on money spent holding onto inventory.
Integrating automation into your inventory management processes also saves a good deal of time and money. Fewer hands are needed to pick, pack and prepare items for shipment if robotics and AI are being properly leveraged.
Improved Data Visibility and Planning
When considering the benefits of having an inventory management solution in-house, it’s important not to forget the value of business intelligence.
Bar code scanning and other features mentioned above allow for easy data transfers, and in conjunction with a central data warehouse, companies can build up their data assets to more closely analyze what’s happening within the business. Using this information, companies can answer questions such as:
- Where is inventory going and what customers are being served?
- How can agile inventory make these processes even better?
- What does customer demand tell the company about its customers, and how can that be applied to marketing operations?
In today’s high-tech business world, business intelligence is key. It allows companies to fine-tune their marketing and outreach processes, which boosts conversions and drives profits. So while inventory management is very helpful on the production side, it’s also helpful on the marketing side as well.
Think about all of these impressive benefits that inventory tracking and management systems can offer a business. Finding a solution that’s well-suited to your particular company needs is key. And when you do, you’ll realize just how beneficial inventory tracking software can be.
Preventing Excess Stock and Stock-Outs
Keeping inventory levels properly balanced is a daunting task that inventory managers have to deal with daily. Allowing inventory levels to go without regular checks can quickly lead to excess or lack of necessary stock. Either scenario is bad; not ordering enough of a popular product can lead to stock-outs and angry customers. Having too much of something and not being able to move it out eats up valuable warehousing space.
Luckily, inventory management software can step in and prevent these dreaded events from occurring and throwing the entire supply chain off. For example, if you have a popular product that needs regular orders, re-order points can be set up within the system that automatically purchases more when levels reach a certain number.
If you aren’t 100% sure about how to set up a re-order point, never fear! Many inventory management systems use formulas and data from within your company to calculate them for you.
Better Customer Service
Happy customers mean good reviews and return business. Not only that, you’ll build a trusted name in the marketplace as you quickly and accurately fulfill customer’s orders. Everything an inventory management system is meant to boost will help raise you up in the eyes of your customers.
Increasing accuracy ensures the right product is delivered to the right place while the quickness of automated tasks gets the item in question out the door even faster. Some systems come with real-time update features that notify customers when their shipment is leaving the warehouse and when they can expect it to arrive. Giving customers the tools to find out when something is set to arrive and where it is in real-time helps lessen their worries and saves you from answering questions.
With all the tools available in an inventory management solution, your customer appreciation should rise alongside their implementation.
Automate Time-Consuming Manual Tasks
Businesses are always looking for ways to save time and decrease labor costs. Inventory management systems provide one of the best ways to accomplish that.
Many of the best systems involve barcode scanning or other agile inventory processing features. This can eliminate labor-intensive and manual processes like individually typing in product numbers or box numbers. With this type of technology integrated into your inventory management processes, employees or robotics can drastically up the number of scans they complete.
As you free up resources and automate more tasks, your employees can spend their time working on more important work or doing what humans do best, planning for the future.
Coordinating Multiple Locations
Larger businesses have been some of the earliest adopters of inventory tracking software, as well as other kinds of enterprise resource planning software. That’s because these types of software work extremely well with economies of scale. As we mentioned, inventory management software can allow a business with multiple warehouses to consolidate and sometimes close out an entire individual warehouse operation.
By the same token, these systems can help companies to effectively manage multiple locations — if a company has 10 or more warehouses, the inventory tracking software can be applied to each one of them to provide better big-picture analysis for long-term decision-making.
Now that we’ve gone over some of the many advantages of inventory management software, how do you go about finding the perfect system?
Finding an Inventory Management System
You’ve decided that the time has come to purchase either a brand new inventory management system or upgrade the solutions you have in place. Before you jump head-first into a wide ocean of software vendors, take some time to ask yourself a few probing questions. Anything you can do to narrow down the market-space will help you make your final decision faster and with more accuracy.
How large is your business?
While it is true that the benefits of inventory management systems can help turn a suffering operation around, picking a system that does not mesh with the size of your company can be disastrous. For example, if a small business purchases a solution meant for a huge corporation, they will soon find themselves drowning in complex features that will only serve to slow them down. On the other hand, a large business may quickly outgrow the capability of a system meant for a smaller company. . More than likely, the features they need to succeed won’t be there or the system won’t be able to handle everything they require.
Is there room in the budget for a new system?
You may be ready to take on a new system, but is your wallet? Depending on the number of resources available, certain systems will be too pricey to consider. Avoid the human condition of assuming a higher price tag means a better solution. If you live in a land-locked area, you wouldn’t break the bank for a jet-ski, would you? Go after systems that meet your unique requirements and that can grow alongside your business.
Which type of deployment strategy fits your company?
On-premise deployment strategies used to be the go-to method for software integration. However, cloud-based systems are rapidly growing in popularity due to their numerous benefits. Many of these cloud-oriented solutions have a lower cost of entry that makes them accessible to firms with less to spend. Talk with your teams, decide what is important and choose the route of least resistance.
As you get a better idea of the problems you need to solve, the perfect system for you will begin to reveal itself. Pass questions on to vendors, talk to teams that will be most affected by the integration of a new system and make sure all parties are satisfied before committing.
Final Thoughts
Proper inventory management is vital to the success of supply chains across the world. The benefits of these systems are impossible to deny, and as time goes on, more and more companies will begin adopting these sorts of solutions.