Why Your Business Needs Inventory Management Software?
Over the last twelve months, 81% of the world’s shoppers have been in an out-of-stock scenario and globally, retailers have reported losses of more than $1.75 trillion as a result of poorly managed inventory.
Supply chain and inventory management issues are all-encompassing and confronted by companies of all sizes and in all. If you’re one of the companies using Excel sheets to manage their inventory or aren’t managing the inventory at all is time to make changes to this.
In this article, we’re going to discuss the advantages of inventory management software to companies, highlighting how it can solve the problems that arise from mismanaged inventories.
The limits of the management of inventory
The list of benefits of managing inventory is extensive. It assists in the efficient use of inventory, reduces costs, and helps to make the supply chain efficiency as well. However, the other list that is just as long is about the difficulties or limitations of managing inventory. While there are plenty of problems with the management of inventory
Let’s look at the major issues at a global level.
1. Inconsistent tracking
Utilizing manual inventory tracking processes in spreadsheets could be inefficient, susceptible to errors, and time-consuming. Even small-sized businesses could benefit from central software to manage inventory for eCommerce which includes accounting and tracking and reporting features.
2. Incomplete data
At any point during the day, you must be able to see the quantity of inventory you own. To achieve this, it’s essential to collect a full collection of information from multiple different sources. This is done on an “as it happens” basis.
3. Changing demand
Demands from customers move constantly. Thus, even though keeping lots of inventory can result in outdated inventory insufficient stock could hinder your ability to fulfill the demands of customers. What is helpful is having an order plan that you can anticipate and meet demands.
4. The complexity of the supply chain
Supply chains across the globe are changing every day which put a lot of pressure on the tasks of inventory management. To deal with the typical way of working where manufacturers and wholesale distributors decide the timing, location and how of your inventory management system must be flexible and comes with unanticipated lead times.
5. Insufficient management of order
One of the most frequent issues with effective inventory management is selling a product too much and the inability to replenish the inventory. While making use of historical and seasonal data can aid in predicting the demand, however, it is an approach that is based on software to manage inventory in logistics. The nagging issues can be found solutions in the inventory management software used by companies.
What exactly is inventory management software?
Software for managing inventory is a system that can automate certain aspects of inventory management and warehouse management. They make it easier to complete the tasks that are needed to monitor inventory, control your rendering processes as well as update the accounting information.
The primary benefit of software for managing inventory lies in the fact that it provides real-time information about what’s happening to your inventory.
With the fundamentals covered we can now take a look at the factors that are leading to the increasing popularity of software for managing inventory.
The benefits of inventory management software for businesses
The process of managing inventory will help you save costs and ensure a proper number of stocks. However, additional benefits when you integrate the software into your company’s software development technology stack. With this type of software, it will be in a position to:
1. Do inventory tracking
The inventory management program that is coupled with ERP will help improve the management of your inventory by tracking it in real-time. It can show where the product is situated and the process of moving it throughout the ERP system. This helps eliminate human error in the process, which cannot be achieved by a spreadsheet manual.
Most of these programs monitor each product at the time it enters and leaves the production process, from manufacturing and storage until sales. In this way, companies can cut down on the costs of managing inventory and build more positive relationships with their suppliers and customers.
2. Reordering is accurate
The primary benefit of inventory management software is giving you a complete track of your inventory while streamlining the process of reordering. The data on consumption and sales that you obtain from the software will assist you in knowing when it is time to reorder the product.
The software can take things a step further, assisting you to purchase just the right amount of items to ensure you don’t hold the dead stock for a prolonged duration.
3. To prevent the overselling of stocks
Overselling is a major issue for companies, particularly eCommerce companies. If you do not have a clear image of your inventory, it is easy to run out of items. The result is the inability to satisfy the demand of your customers, and, in some instances, suspension from marketplaces.
An inventory management program allows you to monitor demands and assess whether your inventory level can meet these requirements. So, you’ll determine what time to replenish the stock and at what amount.
4. Reduce costs for business
Reports on the management of inventory give you information about the stock that is available within the store. When the time for the order arrives, you are aware of the amount of stock available and the quantity you need to organize. This will eliminate the last-minute rush to get stuck at the highest prices.
Another method of savings is by not placing orders for products that have little demand (which can lead to excess stock and associated storage costs) This is knowledge gained by having a clear grasp of the products that are being sought-after.
The inventory management software could aid in reducing the expenses of a business
- Payroll costs for employees — If the employees lack clarity about the amount of inventory they’ll have to control, they may end up storing and managing more than is necessary and this leads to an increase in the costs of labor.
- Storage of surplus inventory could increase the cost of transportation of transporting merchandise from one location to another.
- Insurance — Renting or leasing storage space typically requires an insurance policy to ensure the security of the location and assets. If a company ends with the creation and storage of items that aren’t in high demand, they still have to deal with problems on both the satisfaction of customers and the insurance front.
5. Enhance the supply chain
When we think of logistics in the supply chain unexpected difficulties occur as part of the process. With the appropriate software for managing inventory retailers can develop a suitable supply chain diversification plan.
Based on the data you collect regarding your inventory stock can help you reduce the chance of a long wait time if an organization is unable to provide goods on time as well as plan for peak seasons ahead of time to ensure that you have the right quantity of stock at the storage facility.
6. Create new channels for sales
Every eCommerce seller would like to test new platforms for sales or to sell their goods on. An inventory management program helps manage these channels easier by bringing all the management of inventory to one location. This allows you to keep a good overview of how much part of the stock is sold through which channels.
Furthermore, a large portion of inventory management software used in online commerce comes with features including real-time inventory syncing as well as forecasting. This allows you to control inventory across different locations.
7. Automated the management of inventory
One of the biggest improvements to inventories is observed in the numerous benefits that automated management of inventory systems. Automatization eliminates the risk of human error and saves you hours of performing repetitive tasks.
The significance of managing inventory in logistics, particularly when you incorporate automation into the mix, is brought to the forefront as you gain real-time insight into where your inventory is. This isn’t only providing you with actual time information on inventory levels, as the stock count changes automatically once a sale is completed, and also assists in performing precise forecasting, which provides the best customer experience by the elimination of overselling.
Automation can be beneficial when working with multiple warehouses and sales channels since it gives you live-time visibility of where your product is.
8. Forecast inventory for seasonal purchases
When order volumes increase dramatically due to holidays or other occasions, the quantity of inventory you own must be sufficient to meet the demand. This type of planning can be accomplished through the use of forecasting of demand.
The significance of the inventory management system is in the gathering and analysis of historical and seasonal data to determine the patterns of sales and then make the necessary adjustments to the levels of stock.
9. Manage multiple warehouses
Large corporations are usually the first to adopt any type of inventory software. This is because the principal advantage of software for managing inventory is the ability to connect several warehouses and link all of the information points together in one.
The software provides a bird’s at the whole supply chain, by assisting in tracking inventory and movement between various warehouses. When a facility is low on a particular item they can request it from a different place. Inventory management software will reveal which locations have the product, in which quantity, and at what cost. There is some sophisticated inventory management software that helps you to place an order, while also updating the count of products.
10. More productivity
Companies that utilize inventory management software are likely to have higher production rates. With fewer errors in inventory and management, they can focus on creating top-quality products at a more rapid pace. Additionally, they can shift their work hours to other more productive tasks.
Another benefit of this software is better organization. The software aids businesses in creating more efficient systems for keeping track of inventory. By using this software, employees can classify stocks according to size, name, or any other important factors, which helps businesses complete orders quickly and accurately.
Here are the numerous advantages associated with the use of Inventory management programs. You would have guessed the benefits of this software requires you to install an inventory management program that is custom installed. This is something that you’ll need assistance from an expert on.
This is the point at which Brisk Logic enters the picture. We are an enterprise software development firm we have helped many companies across the world develop and implement software for managing inventory to manage their business. The result? The complete rationalization of the entire supply chain.