What is an Inventory Control System?
An inventory control system is a business application that integrates, streamlines and automates the entire stock process. The main purpose of using this software is to help businesses keep track of their inventory stored, minimize their inventory cost and to ensure that there is ample stock to sell in the market.
Stock control software can help businesses in managing multiple inventory operations such as managing the warehouses, barcode scanning, printing shipping labels, tracking payments, etc. It is extremely useful for retailers, manufacturers, e-commerce sellers, and wholesale distributors to keep track of their inventory.
How Does Inventory Control System Work?
The stock control system offers various features to help businesses to track the inventory in warehouse, tracking the record of products delivered from the supplier to the customer, shipping details, payment receipts, barcode products scanning, sales, and purchase record, etc.
All these functions can be smoothly performed with an automated inventory control system. If you also want to keep track of your inventory, you must invest in inventory control software.
Types of Inventory Control System
There are four different types of inventory software you can consider for your business as enumerated below.
- Kanban inventory Software: It is designed to help businesses eliminate the need for labor, stock, and promote trouble-free inventory management. This system uses different colored tags to differentiate stock materials and notifies new order requirements when the stock supply decreases.
- Online inventory Software: The online inventory software is a cloud-based system with a digitized procedure to keep track of inward and outward flow of inventory of businesses. It automates all the inventory operations such as purchase record, delivery receipt, printing labels, etc., thereby helping organizations to save both time and money. Employees can access these systems anywhere from any device.
- Periodic inventory Software: The periodic inventory software is used by businesses to count the physical inventory at specific periods. The system works by counting the inventory at the beginning and adds more inventory during this interval and deducting the reduced inventory to determine the cost of goods sold within that period.
- Perpetual inventory Software: The perpetual inventory software is an automated inventory software to maintain the record of inventory sold and purchased in real time. When goods are sold, their barcodes are scanned, and they will be removed from the inventory data.
Similarly, if new products are added, the barcodes are scanned and recorded in the company’s database. It is used throughout the year to manage stocks in an organization.
Features of Inventory Control System
Here are some features you get with inventory management software
- Barcodes: Barcodes printing and scanning feature are important to improve the efficiency of inventory management. The businesses can put barcodes on the goods to ascertain whether the products are sold or received in the inventory database.
- Automating Ordering Process: The efficient inventory software automates the entire ordering process. It also determines how many goods are in stock and simultaneously updates the inventory requirement of the organization.
- Tracking Orders: The software allows the users to keep a record of all orders at one place. The retailers and manufacturers can easily maintain the data of all goods sold and purchased within the system. This helps in preparing summary and reports of entire orders.
- Report Generation: The computerized inventory stock control system helps in generating multiple reports to determine the profitability, storage cost, turnover and valuation of stock in hand. It helps management in data driven decision making.
- Inventory Forecast: The reports generated within the software help to predict stock requirements for the upcoming week, month or season using historical data and trends. Therefore, suitable inventory forecast metrics can help to predict stocks requirement for seasonal sales.
- Product Number Tracking: The software puts a specific number on every product to track its movement when in transit or till the time it reaches customers. This feature can help users in tracking and identifying every order.
- Product Bundling Feature: Product bundling is the procedure of clubbing separate inventory items within a single package. The system helps in recognizing each separate inventory item that needs to be packed together and assigning those packages within the delivery location of the warehouse.
- AI Chatbots: The AI chatbot feature informs shoppers about a product’s shortage and suggests similar products in its replacement with the help of various algorithms
Advantages of Inventory Control System
The systematic management of inventory with the help of system the businesses get multiple benefits and some of them are enumerated below.
- Keeping a Tracking of Inventory: It allows users to easily track a product’s shortage and availability within their warehouse. In this way, the businesses can minimize inventory costs and avoid shortages.
- Tracking Order: One of the foremost benefits of using the sales and inventory management system is that it helps users to keep track of all shipments. Each of the products can be labelled with a unique tracking number helping both customers and manufacturers in tracking the order in transit.
- Timely Delivery of Orders: If the inventory of a particular product reduces, the business might not be able to deliver all the orders on time, thereby affecting customer satisfaction. However, the software allows us to keep track of inventory so that the users get their orders delivered on time and therefore improves customer satisfaction.
- Sales Pattern Record: One of the main benefits of using the software is that it helps in analyzing sales patterns of multiple products. The users can easily determine the products in demand and those products that are not selling. It will help businesses to stock products that are more in demand to compliment customer’s requirements.
- Eliminates Data Accuracies: Keeping a record of inventory manually might lead to errors and data inconsistencies. However, the software allows users to track the product from the time it enters the inventory till the time it is delivered. Therefore, users can track the product at every level of transit, helping in eliminating human errors and discrepancies.
Purpose of Inventory Control System
Inventory software serves multiple purposes such as:
- Analyze the product’s demand with the help of analytics.
- Manage all purchase orders.
- Generate different types of reports related to inventory.
- Getting alerts for inventory supply
- Clear description of goods and products
- Tracking the inventory status regularly
- Feed stock data to several other business systems
Components of Inventory Control System
Here are some of the essential components you get with the system.
- Tracking: The inventory software tracks and manages all the inventory operations such as in and out of inventory items with much ease.
- Reporting: The inventory software prepares the reports on a regular basis to keep track of all the payments in one place.
- Analyzing: With the help of periodic reports, the management can easily analyze their cashflow to maximize their profits in the future.