Inventory Management Software – Is it worth the money?
Large-scale companies now are integrating the whole business in enterprise resource planning which incorporates every aspect of the business to ensure that every transaction is being accounted from purchases to sales including warehouse and inventory management.
However, for small businesses, they tend to be avert in investing and adopting software which can help automate monitoring business transactions. One prime reason is because of the amount involved that the company is required to shell out given its limited capital for such investment. But a smart businessman will always tend to invest on innovation and business improvement, and one of that is the consideration of taking care of company assets – where a big chunk of it are in the form of inventories.
Companies with inventory-heavy assets, especially those which are of small yet high volume item are an easy target of pilferage. This is where an inventory management software is important. But of course, before diving into capital expenditure for an inventory management software, the businessman must first know what an inventory management software is, how it operates, and how it will be able to contribute a return in investment.
Now let’s discuss the definition of inventory management software. This software brings together all tools that help in preventing inventory products from spoiling, in eliminating costly mistakes and thefts, and most importantly – in keeping your customers satisfied with your services because of avoidance in delay and other delivery mishaps.
What do inventory management software do?
- Employing automation in inventory management makes it easier for a business to effectively plan ahead the supply chain, without compromising production and customer demands. This helps a business to establish an accurate buffer of stocks to accommodate sudden sales spikes and drops through trend monitoring and historical record references.
- There will be an effective practice of the first-in first-out method by easy tracing of batch numbers to the product, which also pulls of important statistics such as its production date and the expiry dates.
- With an integration of a warehouse management system, inventory management will be optimized because this enables a smart stock positioning from fast moving to slow moving products. Thus making it easier also to evaluate and reconcile product that should be developed even more from those which are most likely be classified to be obsolete.
How will you determine the right software for your business?
So before making an actual decision and invest your money, you must first know what inventory management software is right for your business
- The functionality of your system.
If your business is holding only a few products in stock, and your manpower is a just small team to run, purchasing a high-tier inventory system as your forerunner might be too much or impractical.
It is advisable for a business to look for a walkable and flexible system that will grow in parallel with your company’s sales activity.
- Enhances customer relationships
The ability to be able to keep closer track with your products through the automation of inventory monitoring will help you become more responsive with customer needs, giving them personalized access up to the status of their orders.
- Reliable after-sales customer services
With an automated inventory system, determining inventory on hand and availability will be much easier. Preferably choose only reliable systems wherein your data will be secured and that calculations are 100% accurate, and even more importantly – choose a software that is easy to maintain. There will always be the possibility of software problems which you might experience in future, so it is also advisable to make sure there is someone on the other side of the line that can take care of those for you.
Now that you already have a potential inventory management software in mind, the cost-benefit analysis must follow. The integration from manual to automation will never be error-free. However, taking into consideration the risks, below are also some of the benefits in adapting into an automated inventory management system:
- Avoiding inventory shrinkages
Inventory shrinkages however small of value, is a cost of your money. In fact inventory shrinkage resulted in over billions in losses for retailer in the year 2014 alone. Over 50% of the cause of such shrinkages are due to internal theft, error and some other causes which can be mitigated if not eliminated should a good software had been in place.
- Resolving uncertainty in ending inventory
- An Improved Customer Service
We would not want to keep our customers waiting on the other line just because you are still taking up time trying to figure out which products are on hand, or are still available. It would be frustrating on the customer’s part, and it will be disastrous on your business just because you cannot be sure what you have in stock or not.
- Inventory Tracking with Precision Drilling
An assistant director of marketing and communications explained how an inventory tracking software changed their company. Their salesmen no longer have to walk through the warehouse just to verify items on hand when they receive sales orders. A lot of time will be saved, thus increasing productivity and in effect increasing sales volume.
- Effective Inventory Forecasting
Inventories are a crucial part of a business. One must know how to effectively handle inventory turn-overs so as to optimize production capacity to sales maximization. With the assistance of an automated inventory management, it will be easier for a company to forecast the materials requirement to be procured, and the needed safety stocks either to avoid inventory shortages or overstocking of inventories. Being able to know when these situations arise is very crucial for a business.
- Elimination of Excel Issues
Although Excel is a very good tool when it comes to data maintenance, it is only good when you have small volume of data. As the business grows, data that needed to be kept track will also grow. And with that, there will come a point that Excel will no longer be able to handle such bulk in data which can sometimes result in file corruption or formula and format errors. With the integration of the data inside the inventory management software, it will be easier to maintain, to retrieve and to add new data.
Inventory management software allows you to take a better control of your stockroom which in turn will boost your confidence to make effective decisions about inventory needs. So be more interested in investing for your company’s future now and always lean towards innovation.