The foundation of any business is what you have in stock – the inventory. Keeping accurate records of the products stored in your warehouse or store can help control costs, help you monitor sales, and ensure that you protect your investment.
An inventory control software stores, tracks, and manages products in a warehouse or logistics facility.
Why should inventory management software be a part of your daily operations?
It is nearly impossible to manage your supply chain effectively without adequate tools. This inefficiency will impact your company's ability to support the business needs of its customers, as you won't have the data needed to ship orders on time and budget.
For this reason, a customized inventory control system is the backbone of every efficient business operation with a large inventory.
What Is Inventory Management?
Inventory management is a term given to the process of tracking and monitoring goods. The inventory system refers to the collection of procedures by organizations to track goods from the point of origin to their final destination.
Inventory management aims to ensure that the right amount of stock is available to meet customer needs while minimizing storage costs and improving overall inventory efficiency.
Why Is Inventory Management Software Important?
You know how difficult it is to manage products when you run a business. Not only do you need to make sure that your shelves have the right items stocked, but you also make sure that you aren't wasting money on excess stock and that your customers aren't walking away from your store carrying something that they don't want.
Trying to manage this process manually can be an enormous undertaking, which is why so many business owners have started to look at inventory management software as their solution to inventory organization.
Warehouse inventory management software is a popular type of program because it can improve efficiency, save labor costs, and reduce time wasted on purchasing and systematizing items for sale.
One thing that makes it valuable is that it can be used in conjunction with existing point of sale systems, which means that you can automate your entire inventory and sales process.
In addition, these programs allow you to receive detailed reports about everything from sales figures to customer preferences. This information makes it much easier for you to check your inventory and make the necessary adjustments to ensure maximum efficiency.
And finally, when you start using software like this, you'll be able to access all of your data from any location in the world, making it much easier for you to keep track of what's happening at all times.
What Should You Expect From Your Warehouse Inventory Management Software?
Inventory management is a crucial part of any business. A mistake in inventory can cost companies thousands of dollars. Finding the right inventory control software can eliminate costly mistakes.
This type of software should go beyond just counting and managing items in a warehouse or store. Inventory management tools also have to give businesses real-time updates on the inventory levels of their products and collect this information online with the help of a cloud-based software package.
What are the features of good inventory management software?
- Inventory Tracking- Basic barcode scanning is standard with most inventory management software packages. However, more advanced features allow users to manually enter products into their system and categorize each product into its category based on type or size specifications.
- Quantity Counting- This inventory tracking feature allows users to use scanners to count the number of items present at various locations inside a store or warehouse. Hence, they know how much they have available and how much they may be losing due to theft, breakage, and other causes.
- Multiple Locations- Some warehouse management systems let users manage inventories from numerous locations, which is helpful for businesses that sell their products through more than one channel (such as physical stores and online eCommerce sites).
- Streamlined Workflow- Warehouse inventory management software is no good if it doesn't streamline your company's workflow. Look for options that allow employees to quickly add items to the system and update item quantities when needed.
- Customizable Dashboard- The warehouse inventory management software should offer a dashboard that allows users to access the information they need in one place. A customizable dashboard will help ensure users only access the information they need to avoid wasting time looking for it elsewhere.
- Stock Level Alerts- When your stock goes down, you want to know about it so that you can place an order for more items before you run out of stock entirely. Be sure to choose warehouse inventory management software with stock level alerts so that you're not stuck wondering where all of your products went!
- Shipment Tracking- If you ship your products to customers directly from a warehouse, tracking those packages and seeing when shipments will arrive is crucial.
Such a system can store any information like:
- Metadata about a product (brand, manufacturer, type, size)
- Information about a supplier or a vendor (name and contact details)
- Information about an order (date, number)
- Product characteristics (weight, dimensions)
- Information about sale and purchase transactions
- Some additional attributes
- Additional information that may be necessary for your business (for example, other attributes like color or seasonality)
- Products that require images
- Information about stock
- Audit log
- Dashboard Visualization
You can use inventory management software in almost every industry that requires tracking supplies and materials. Industries include manufacturing, retail, wholesales, logistics, warehousing, and e-commerce.
3 Types Of Inventory Control Techniques to Use With Your Inventory Management Software
Truly effective inventory management practices in combination with the right software will help you avoid understocking or overselling your products, among other things.
Here are a few techniques you can use within your inventory management.
ABC analysis is a technique for evaluating the relative importance of different kinds of inventory in a company's operations. It is helpful for planning, managing, and controlling inventory.
An analysis assigns inventory items to one of three categories: A, B, or C.
- Items in category A are the most important. The company should never allow its stock of these items to become too low.
- Commodities in category C are least vital. The company can have very little supply of these items and may even want to have no stock because they are easy to obtain when needed.
- Category B items fall between the two extremes.
It is necessary to know how much stock to keep on hand. It is critical to consider the item's average demand rate and variability in demand rate and lead time to replenish it.
Manufacturing companies widely adopt the ABC approach to use inventory resources better and increase customer satisfaction by improving service levels.
Minimum Order Quantity (MOQ)
Minimum Order Quantity (MOQ) or Minimum Stock Level is a kind of inventory control technique that refers to the minimum quantity you should keep in stock at any given point in time.
The Minimum Order Quantity (MOQ) method minimizes the inventory level and cuts costs simultaneously. A company must order more than one item at a time since production and delivering a single unit will cost more than producing an entire lot.
This inventory control strategy means that you have to buy them in bulk every time you order products. You cannot place an order for just one or two items. You will have to purchase at least 3 or 4 items together.
Applicable when selling bulk products such as mobile phones, perfumes, and medicines.
Economic Order Quantity (EOQ)
Economic Order Quantity is a basic inventory-control technique. It can reduce the cost of holding inventories and help companies avoid significant losses resulting from shortages or overstocks. EOQ calculations are based on the relationship between demand and order frequency and the ordering costs and carrying costs associated with maintaining the inventory.
As you'd expect from its name, EOQ is an economic analysis tool. Any time you use EOQ to determine your optimal order quantity, you should perform a cost-benefit analysis to ensure that the savings from using a smaller order quantity offset the extra costs linked to higher numbers of orders.
Although it's vital to compare EOQ against other techniques for making order quantity decisions, it's not appropriate for all situations. Other inventory-control methods may better serve some types of businesses.
EOQ is useful in situations where:
- The natural demand fluctuates seasonally, and you want to minimize the impact of fluctuations on your cash flow.
- The product or service has a long life, and temporary shortages or surpluses significantly impact cash flow.
- You want to eliminate stockouts -- that is, when your suppliers can't deliver because they're out.
Inventory Management Basic Tips
The merchandise in your inventory takes up space and reduces sales. But it is also essential to provide an assortment of merchandise to satisfy a diverse customer base. Here are some tips for keeping inventory at a reasonable level while still providing customers with a good selection:
- Count your inventory regularly.
- Remove slow-moving items before they become obsolete, damaged, or outdated.
- Track the item's invoice and receipt dates to see if it is time to reorder.
- Match your ordering cycle to the demand for the item. If you sell seasonal items, order them when you expect peak demand for them.
- Consider outsourcing inventory management for items that do not fit your business model or have high storage or handling costs.
- Consider outsourcing the repair, cleaning, and maintenance of high-cost, low-turnover inventory items.
Businesses must have the proper tools to manage their inventory effectively. An inventory management software system streamlines the process of inventory tracking, which can help companies avoid costly overages and shortages.
Our inventory management software features a host of valuable features that allow our clients to maximize their profits and protect themselves from losses.
Smart Warehousing Information Management System (SWIMS) is a cloud-based inventory management solution that integrates various technologies and business workflows. The system provides a system of record for inventory, putting control and visibility in the hands of our clients.
Contact us to learn more about how SWIMS integrates with various technologies you may already use.