A stock management system is important for a small or medium-sized enterprise (SME) in the manufacturing sector in India. Given the fast-paced nature of the industry and the need to meet high customer demand, having a robust system to effectively manage and track your inventory is essential.
In this blog post, we'll be looking into the importance of having a stock management system, specifically for SMEs in the manufacturing sector. We'll also deep dive into the various other facets such as features, benefits and learn about when one should start using a stock management system. So, whether you're only just starting out or are looking to take your business to the next level, this post is for you.
What Is a Stock Management System?
A stock management or stock maintenance system is used to track, manage and maintain inventory levels. The primary aim is to make sure you never have too little or too much stock. However, it also has lots of other features and functionalities that help small and medium businesses in a myriad of ways.
A stock management system enables inventory tracking along with their location and condition. It also helps with sales tracking and understanding which products are selling well and which are not. In addition, it supports you in the creation of purchase orders by providing inputs on which products need to be ordered, when they need to be ordered and from whom they need to be ordered.
Why Is a Stock Management System Important?
A stock management system is very important for all businesses, especially those in the manufacturing sector, as it helps you understand and execute for customer demand. It also ensures there's no wastage and overstocking, minimizing your financial losses.
Since it allows you to track your inventory in real time, you can immediately identify and take action if stocks are running low. As this is directly linked to customer satisfaction, it's a very integral piece of your sales funnel and extremely important when it comes to building a strong brand.
Overall, an effective stock management system is crucial for any manufacturing business looking to grow and succeed in today's competitive market. It helps in being on top of the stock, reducing costs, improving customer satisfaction and managing the inventory in an organized way.
How Does a Stock Management System Work?
A stock management system tracks your inventory from end to end. Starting with when stock is received from suppliers, to when they're in your warehouse and even once they are shipped out to your customers.
This entire system works best when it is run on a stock management software and gives you various data points (which include inventory levels, stock turnover, supplier performance and many more). This enables you to make more informed decisions.
A stock management system also has a barcode scanner or RFID (Radio-frequency identification) technology which makes it even easier to track the lifecycle of your product, right from when it reaches your warehouse, to delivery.
Overall, a stock management system is a powerful tool that can help businesses in the manufacturing sector to manage their inventory more efficiently and effectively. It allows them to stay on top of their stock, reducing costs and improving customer satisfaction, while also providing valuable insights into their business operations.
Importance of Stock Management
Stock management is a very important piece of any business as it allows you to do the following:
Meet customer demand
With real-time tracking of inventory, you can identify when your stock is low and take prompt action to restock. This greatly helps you stay in line with customer demand ensuring you have happy customers.
Reduce costs
By tracking your inventory levels you can identify trends and patterns over a period of time which helps reduce unnecessary costs that can arise due to overstocking.
Improve efficiency
Real-time tracking by a stock management system allows you to identify operational bottlenecks across your organization, and correct faulty areas promptly.
Reduce risks
An effective stock management system ensures you aren't under or overstocked at any given point in time. This saves you from dissatisfied customers as well as wastage of stockroom space.
Streamline operations
A robust stock management system allows you to automate several manual processes over time. This enables you to streamline inventory processes across your organization.
Common Features of Stock Management System
The more common features of an integrated stock management system are inventory tracking, barcode scanning, purchase order generation and management, sales order generation and management, reporting and analytics.
However, there are a few more features that can be very useful.
Automated reordering
This feature allows you to set reorder triggers that are quantity driven. So the system automatically places an order for a specific product once it falls below a predefined threshold.
Multi-location inventory
This feature allows you to track your inventory across multiple locations - be it warehouses or retail locations. This is especially useful for businesses in the growth phase.
Mobile compatibility
Certain stock management systems allow users to keep an eye on things and perform tasks on-the-go with advanced remote access.
Delivery management
This helps you track the delivery status of your products so you can keep a check on whether they've been delivered on time and in the right amount.
Reporting
An effective stock management system allows you to generate various kinds of reports that help you identify trends and make strategic decisions.
Benefits of Stock Management System
Having a stock management system has several benefits for all businesses. Some of which are:
Improved efficiency
By reducing manual stock entry errors and improving collaboration between teams for real-time stock updates, this system improves efficiency in stock management.
Increased visibility
Automated and live stock tracking ensures higher inventory control and visibility across multiple stores.
Reduced under and overstocking
With advanced tools for stock monitoring, reorder points and stock optimization a stock management system can help to prevent overstocking and stockouts.
Informed decision making
Integrated inventory management, audit trails of all inventory movements and access to accurate stock insights, ultimately aids data-backed decision making for business growth.
These benefits enable you to run a tight ship which ultimately helps you grow your business and stay ahead of the competition.
When Should a Company Start Using a Stock Management System?
A business should ideally start using a stock management system from the very beginning, if they have a vast product line and plans on increasing sales volumes to match customer demand. The moment you start struggling to keep a track of your inventory levels or forecast demand for your products accurately, you know it's time to invest in setting up a robust stock management system.
However, you shouldn't wait for problems to arise before investing in a stock management system as the implementation of it will greatly increase operational efficiency, reduce costs, improve customer service and give you great insight into your entire inventory management process.
Additionally, as the business expands, the need for a stock management system will increase accordingly. For example, if a company is expanding to multiple locations or adding new products, it will become more difficult to manage inventory manually. In this case, a stock management system will be essential for maintaining visibility and control over inventory.
How to Choose the Best Stock Management System?
Finding the right stock management system for your business can be a fairly daunting task. However, you can consider the following factors to help you make the right decision:
Scalability
Your stock management system needs to have the provision to scale alongside your business.
Integration
Make sure you evaluate whether the stock management system you're considering has the ability to integrate with other software such as production, procurement and accounting systems.
Functionality
Keep an eye out for specific features that you may need, such as inventory tracking, purchase order management, sales order management, reporting and analytics, and automated reordering.
User-friendliness
This is very important as you don't want to be stuck with a system that's painful to use. Also, keep an extra keen eye out for responsive customer support that could help you if you do not have IT staff dedicated for this system internally.
Cost
Make sure you weigh the benefits of the system with how much it's going to cost you. Don't forget to account for smaller, hidden costs such as monthly maintenance or subscription fees.
Remote access
In today's day and age where everything is done on the internet, you need to find a system that can be accessed from anywhere and allows you perform tasks on the go.
Security
This is an especially important point as you want to know the measures your stock management system is taking to protect your data. Make sure to do your research and read both good and bad reviews across the internet. Don't be hasty with this decision as this is a system you're going to be working with for a long time.
Elevate Your Stock Management System Today
In conclusion, a stock management system is a very important part of your business and benefits business owners in a myriad of ways. So, if it's something you plan on doing right away or sometime in the near future, consider using TranZact and choose a system that gives you multifaceted stock management benefits such as real-time stock insights and auto inventory valuation.
TranZact comes with a dedicated inventory dashboard that provides you with a quick overview of your inventory status, for improved decision making!
FAQs on Stock Management System
1. Which is the best stock management system for small businesses?
TranZact is the best stock management software that enables you with instant automation solutions for all your stock-related concerns. It offers barcode scanning features along with negative stock restriction and reordering automation tools to streamline your inventory operations.
It's integrated with production, material requirement planning and procurement modules to enable higher stock control. So, if you're looking for a stock management system for your small business, TranZact is the solution you've been waiting for!
2. What is the difference between a stock and inventory management system?
An inventory management system allows you to track and manage your inventory levels, quantities and even the movement of your products within your warehouse.
On the other hand, a stock management system is far more in-depth and comprehensive as it may also allow you to manage the sales, distribution, and purchase of your products. Some stock management systems also help with things such as supplier management, demand, forecasting, and planning.
