Inventory management is the backbone of the business and calls for a high level of accuracy. Whether it is about managing inventory for a manufacturing unit, restaurant, or grocery shop, inventory management can become a challenge when thousands of products have different variations that require to be tracked, stored, and delivered. The discrepancy in inventory counting, tracking, and forecasting can result in overstocking or low stock issues and shipment delays. To overcome this challenge, the companies use the best inventory management software to eliminate stock wastage, control costs, fulfill orders accurately, deliver excellent customer satisfaction and ultimately achieve their sales goals.
As per a recent report, the overall value of products going out-of-stock in 2020 reached 1,140 billion U.S. dollars in the retail sector, worldwide. The study obviously hints you on the missed sales opportunities and loss of revenue. Besides Covid-19 outbreak, one of the major reasons behind this inventory distortion is lack of executing the right technology for managing inventory and supply chain processes.
In this article, we’ll take a closer look at some basic details about inventory management software and how to select one that can shape your business at present and make it future-ready.
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All you Need to Know About the Inventory Management Software
Inventory management software is a centralized hub that helps businesses organize and monitor their products that are not sold and lying in their warehouses. The businesses might have multiple warehouses and several products stored there. The inventory management software is an application that helps in recording, tracking, and accessing inventory information accurately from a single interface on a real-time basis.
As soon as a product is sold or returned by a customer, the inventory management software updates the stock count in the system. It notifies if the stock goes below a particular threshold so that you can make purchasing decisions accordingly and avoid low stock issues. You have the exact inventory count information at your fingertips, so there are no instances of overstocking any product. Moreover, it helps forecast future sales so that you make the right decisions relating to stocking inventory and eliminate unnecessary wastages caused due to stale or obsolete stock lying in the warehouses.
How Critical Is Inventory Management Solution?
Inventory management software provides you easy access to accurate and real-time information about your stock levels. Having accurate inventory tracking information enables you to make the right decisions when stocking and selling the products. Thus, inventory management software helps save time, improve productivity, eliminate human errors, enhance order fulfillment processes, and ultimately achieve the determined sales goals.
Qualities to Consider in an Inventory Management Tool
Selecting the right inventory management software can be a crucial decision for your business, but knowing the features to look for this task becomes easier. Not all businesses are the same, and their requirements may differ. Here are some standard must-have qualities you should look for in your inventory management software.
This is one of the most critical inventory management software features that help track the inventory in your warehouses. The inventory management software allows you to have clear visibility over the exact location of the items in the warehouse. It helps in quickly picking, packing, and shipping the items making sure that the order is fulfilled at the right time to the right customer.
Barcoding is the main feature that automates the process of inventory management. The barcode is scanned when the product enters and exits the warehouse. Manually pasting the SKUs on each item in the warehouse can be time-consuming and prone to errors. Automating the process of barcode printing and scanning enabled by inventory management software eliminates all the issues caused due to wrong inventory count being displayed in the system.
#3 Real-Time Stock Updates
The inventory management tool you pick should allow real-time updating of the stock in and out instances. When the stock enters the warehouse, and the barcode is scanned, the inventory management system needs to update the stock count automatically. Similarly, when the product is sold, your inventory management software is supposed to update the stock count on a real-time basis. This helps in avoiding the instances of selling the products that are physically not available in stock.
Probably you might be using other tools as well for accounting, client management, etc. The inventory management software you select should integrate with other software you use in your organization. This would eliminate the need for repetitive data entry, save your time and enhance productivity within your organization.
#5 Analytical Reporting
What is the use of having data if you cannot analyze it and present it comprehensively? The inventory management software you select should allow you to generate analytical reports showing clear and concise information about your stock levels, sales, sales returns, etc., allowing you to make informed decisions and make profitable returns.
While looking for inventory management software, you need to ensure that it can grow with your business and is future-ready. Maybe you might not be requiring many features or having too many users to use the software, but in the future, your needs can change with the expansion of your organization. In that case, the inventory management software that is scalable would provide an extra advantage; otherwise, you will have to look for another option resulting in unnecessary expenses.
If the inventory management software you are planning to deploy is taking hours to get your team to learn using it, then it might not be the right choice for you. You need to look for an inventory management system that is easy to use, and your team can easily integrate it into your workflow. Otherwise, your employees may prefer managing inventory manually, and the software might become a financial burden for your company.
#8 Customer Support
Make sure you get 24/7 support from your inventory management software vendor, as that would help you carry out your supply chain workflow without any interruptions. Without prompt support, your issues relating to inventory management software may remain unresolved, causing serious issues in inventory count and order fulfillment. Thus, prompt customer support is vital to your business when adapting a new inventory management system.
Questions to Ask Before Selecting an Inventory Management Software
What are your Business Challenges?
Every business has a set of unique challenges to face and overcome when it comes to inventory management and order fulfillment. You need to ensure that the inventory management software you have selected enables you to overcome those challenges and addresses your pain points.
What is Your Business Type and Size?
What type of business are you? Small, medium, or large? The enterprise-level businesses require advanced level inventory management software which might prove to be overqualified for small businesses. So, choose inventory management software suited to your business type and size.
What is Your Budget?
Is the price of inventory management software you have selected suitable to your budget? If not, then you need to look for an option that suits your budget, as investing in the features you don’t require may end up costing you more and decreasing your business profits. Free and open source Inventory software can work for businesses that work on low budgets, and seek for customization.
What are your Must-Have Features?
Just list out the must-have features important specifically for your business. Make sure that those features are included in your inventory management software. The inventory management software that exactly meets your needs can help you achieve your business goals.
Which Type of Software Deployment Do You Need?
Do you need cloud-based or on-premise inventory management software? Based on your technical capabilities and resources available, you can choose the type of deployment in your inventory management software.
Investing in the best inventory management tool is highly significant, but at the same time, you need to be careful while selecting one. Considering all the qualities mentioned above in an inventory management software might prove helpful in your selection. The right inventory management system would help you save a lot of your time and costs, enabling you to focus more on delighting your customers and achieving your dream business goals.
Jemimah Rodriguez is senior content writer working with GoodFirms – a reliable platform helping businesses in selecting right Software Companies & Products. For further information, you can get in touch with her on [email protected]