Running any business requires time, patience, and the right strategy to deal with every step, including your products. Here, the Inventory Module comes in handy to help you track all your product-related functions by managing it thoroughly. If you run a small business, you need to keep every report of goods from purchase to sale. Also, you need to track the raw materials, which products are in progress, the number of finished goods, and much more. So, It is important to get a quick record of stocks so that further processes can be done effectively. If you are an entrepreneur who is looking for the best inventory module or looking towards every piece of information related to this term, then this article will help you out. Let’s understand what inventory management software modules are and how they can benefit your business.
What Is An Inventory Module?
Inventory means accounting of items, components, and raw materials that are either used for sale or production. It helps you track goods, and as a business owner, you can easily identify when it is going to be short over time. Further, the inventory control module reduces excess inventory balances and related carrying costs. It make sure that you have enough stock on hand so that your production function does not get affected. Understanding the Inventory module is important for businesses to grow. By having efficient inventory management modules, you can easily control the entire inventory from a single location. If your inventory management is good, you can easily plan to stay ahead of your competitors. It will also give you maximum profits by maintaining stocks in the warehouse. Let's explore the benefits of an inventory management module for your business.
Inventory Management Module Overview
Inventory management is essential for managing companies to know how much stock to order and at what time. It uses a variety of data to keep track of goods as they move through processes. It may include the cost of goods, lot numbers, the number of goods, the date when the goods move through the process, and more. There are many inventory management software modules in which you can manage your products at the right place and time. It helps to give a detailed record of each new or returned product that leaves or comes to the warehouse.
Effective Inventory Management Modules
1. ABC Analysis:
This technique helps you split goods into three categories and has a positive impact on the overall profits of the business. It covers-
- Category A inventory constitutes a small percentage of the total inventory in a business while generating a substantial percentage of the sales. Category A items help businesses to make higher profits than other inventories. Also, these are the most demanded items in the market that require close attention and the right inventory management skills.
- Category B accounts for a moderate percentage of both the total inventory and sales. This inventory falls between category A and category C as such inventory may require less production cost and have less demand in the market as well. They require a certain level of attention and management, but less than Class A items.
- Category C may comprise a large percentage of the total inventory but contribute a small percentage of the sales. These items help the supplier to pay minimal attention by properly managing the important inventory in the business.
2. Last In First Out (LIFO):
LIFO is the most effective inventory management system modules where the newer inventory that is prepared is sold first, and the older stocks go for sale after that.
3. Minimum Order Quantity (MOQ):
Minimum Order quantity is a specific number of products a buyer buys from the supplier in one order. Stock distributors or suppliers set an MOQ for the product that they want to sell, even at a lower profit. This method helps them to cut down on the misuse of the resources used on low-margin orders.
4. First In, First Out (FIFO):
Another inventory system modules is FIFO, in which older inventory is purchased or sold first, and then the last inventory is valued. Here, goods stored are first distributed, and then other inventories are analysed.
5. Economic Order Quantity (EOQ):
It is a basic formula that businesses adopt to analyse how much inventory should be purchased. EOQ covers many factors like cost of production, demand rate, and others.
6. Safety Stock:
It is extra inventory that is set aside if needed in case of emergency to maintain the supply chain.
7. Just-In-Time Inventory Management:
JIT inventory management is a technique where manufacturers buy materials just at the time when they require to sell. Here, the process is executed exactly at the required time, which can not be early or later.
How Is the Inventory Module Beneficial to SMEs?
Inventory management system modules benefit businesses in many ways, such as;
- Pack and transit stock
- Process customer invoices
- Process supplier orders
- Track Inventory received
- Process supplier's purchase orders and more.
Inventory management software modules are an easy way to get an efficient solution for your stocks. It is prepared to maintain every requirement of stocks within the company. Also, it helps businesses track inventory so that purchase teams know what to order and sales teams can be aware of what stocks to sell.
Why Should You Get The Best Inventory Module?
Efficient and optimised inventory software modules are necessary to grow profits in any business. If you follow the right inventory tips, you can effectively manage and reduce unnecessary inventory management costs. Also, by knowing the right inventory management techniques, you can reduce risk related to your stocks and forecast demand. If you are in search of the right inventory management software modules, then trusting TranZact would be a great choice. We can help you streamline your overall manufacturing process and effectively manage your orders, track inventory, handle GST billing, and see warehouses. We provide you with one-stop solutions for inventory operations like valuation, inventory rejection or dead stock, barcode tracking, and others.
FAQ
Q1. What are inventory modules?
Inventory modules are the way by which you can manage all your inventory-related transactions and maintain stocks. It helps you to increase business profit by easily maintaining inventory from raw materials to finished goods.
Q2. How do you reduce inventory costs?
Inventory cost is the extra cost that your business suffers while keeping stocks. However, there are many ways to reduce inventory costs, like
- Try to avoid overstocking
- Reducing supplier lead time,
- Getting rid of your deadstock
- Choosing the best inventory management software and more.
Q3. What are the 4 functions of inventory?
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Ordering raw materials or finished goods from suppliers.
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Tracking of purchased or manufactured products.
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Storing a safe warehouse.
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Keeping records of your stocks and goods.
Q4. What do inventory management systems do?
An effective inventory management system helps businesses keep an eye on all types of stocks, starting from purchasing raw materials to in-process goods and finally selling to customers. Further, it helps in being organized and increasing business profits.
Q5. What Are the Types of Inventory Management Systems?
There are several types of inventory management systems that businesses use. This depends on how they operate. The main types of inventory systems include:
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Manual inventory system
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Barcode
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RFID
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JIT
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Dropshipping
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Automated IMS
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Cloud-based IMS
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Multi-channel IMS
Q6. What Is Poor Inventory Management?
When the business is unable to keep a sufficient balance of stocks in hand, it is considered poor inventory management. This increases costs and reduces profits by not having real-time information on how much inventory you are left with.
