Inventory management is the process of tracking your inventory from purchase to the sale of goods or stocks. It involves such activities as restocking, ordering, inventory forecasting, and storing. Whether you’re from the e-commerce, manufacturing, or logistics industry, having an efficient inventory management system is essential for your company.
You may ask: what are the functions of the inventory management system? Some of the functions of inventory management software include improving a company’s productivity and efficiency, preventing stock-outs and over-stock, easy inventory management, and improving profitability. Having an inventory management system in place will enhance your cash flow, help you save money, and most importantly, leverage your customer satisfaction rate.
Wondering how to prepare and effectively introduce an inventory management system for your business? Read on to find out.
1. Evaluate Your Needs and Requirements
Before investing in inventory management software, you need to ask yourself: what do you want to monitor in your inventory management process? Do you need to keep track of inventory levels?
You also need to determine the possible solutions you want to get out of your inventory management system, such as:
- Centralized tracking
- Stock auditing
- Paperless documentation
- Optimal service level
- Automatic reorder points
- Inventory classifications
- Dashboard collaboration
- Business intelligence dashboard
- Productivity tools
- Transparent software performance
Knowing your needs and requirements firsthand will help you get the most suitable software for your inventory management processes.
2. Consider Customization Features
If you have complex inventory processes and specifications, you need to get an inventory management system with customization features. For example, if you want to get rid of unneeded stock while ensuring you never run out of product, the vendor should know about these concerns. Your provider should also know whether you prefer software that offers insights regarding customer behavior or one with an inventory forecasting function.
Further, for companies that already have an inventory management system and just want to have additional features, make sure the new software can be easily merged with your existing one.
3. Think About System Integrations
Integrations are important in any software. So, for small businesses, the integration of tools may not be a big concern. But if you’re eyeing to grow your business in the future, you should consider it. Even startups have utilized up to four different inventory management systems to simplify their company operations.
So, a typical example of integrations with other systems is an inventory management tool being integrated with accounting, purchasing, warehouse management, e-commerce, and tally systems.
4. Consider Flexibility and Usability of Inventory Management Tools
Another important factor you need to consider before introducing an inventory management system to your business is flexibility and usability. Further, as per Meili Robots’ statistics, there’s a growing demand for flexible and reliable automated systems to improve retail companies’ productivity and operations.
So, before purchasing a new inventory management system, ask yourself: is the software compatible with all types of devices? Is it an on-site or web-based system? You also need to know how many users it can accommodate and if it would be flexible with your different store locations.
As for usability, you need to learn the ins and outs of the inventory management tool. Remember that your goal is to find a system that will simplify your business processes, so a tool with complicated features isn’t truly worth purchasing.
5. Examine the Cost of the Software
If your budget permits it, you can always buy the best and most expensive inventory management software in the market. But if you want to save money, you may opt for the cheaper ones with good quality. However, the price examination doesn’t end there.
The cost of inventory management systems mostly depends on the complexity or simplicity of your needs and requirements. So, when you enumerate your needs, and the vendor gives you a price, you need to evaluate if it’s just right or too expensive.
These days, finding worthy software isn’t that difficult anymore. Thanks to the availability of affordable and efficient cloud-based solutions fit for startups, small businesses, or companies with low budgets. According to a survey by Meili Robots, automation and cloud-based software are getting more popular in the material handling equipment industry.
6. Learn the Best Inventory Management Practices and Techniques
Last but not least is that you should learn the best inventory management techniques. By doing so, you can effectively implement the inventory management tool in your business and make the most out of it.
Some of the best inventory management practices include:
- Economic and minimum order quantities
- ABC analysis
- Safety stock inventory
- Just-in-time inventory management
- First-in, first-out method
- Last-in, first-out method
- Batch tracking
Aside from learning the best practices, training employees would also be crucial when introducing an inventory management system to the company. Hence, the need for employees with relevant educational backgrounds and experience, such as the best online supply chain management bachelor's degree, would be beneficial.
Introduce an Outstanding Inventory Management System to Your Business
Implementing inventory management systems to your business processes can be challenging, especially if inventory management is something that’s overlooked in your company. Hopefully, the tips above will help you prepare for your next software purchase and introduce the best inventory management tool to your company.