What is Inventory Management Softawre?
Inventory management involves managing and tracking stocked goods of a company. Using inventory management, business organizations can easily manage constant flow of goods and prevent excessive ordering or lack of products in the inventory. To meet customer needs, it is important for businesses to have sufficient inventory. Inefficient inventory management negatively impacts a company’s bottom line.
Need of an Inventory Management Software
It is important for businesses to know what’s in their warehouse and where their stock is located. Most businesses, during their gestation period, either manage their inventory on spreadsheets or worse, don't manage it at all. Such practices can be detrimental to a business and can cost them financially and operationally, in the long run. Integrating an inventory management software
will help businesses in managing their stock better and avoid over or under stocking of products.
Benefits of using Inventory Management Solution
- Organize Warehouse: Having an unorganized warehouse makes inventory management and tracking even more difficult. Companies often deploy manual methods to keep their warehouses organized but, doing so manually is time taking. Investing in a good inventory management software system helps in organizing the warehouse by automating the process and making it easier to manage the warehouse through dedicated modules.
- Saves time and Money: A good inventory software saves a company lot of time and money. Manually managing inventory or worse, not managing it at all, is not only time consuming but businesses will also lose a lot of money, which could otherwise be used for better reasons. Businesses stand to gain a lot, time-wise and financially, by automating inventory management with this software.
- Increase Efficiency and Productivity: A good inventory management software comes with a number of advanced features, which eliminates the need for manual work, enabling employees and business owners to focus on other important aspects of the business. This in turn increases employee efficiency and productivity.
- Reduces Holding Costs: Holding costs is the cost incurred by a company when an unsold product is kept in storage. It can be hugely detrimental for a company and severely weakens the finances of a business, if left unchecked. Having large inventories on hold involves storage cost, insurance cost and of course unnecessary space consumption. Having a good inventory management system in place will help in reducing these costs remarkably by informing of excess stock and unsold products in time. This allows the business to plan a course of action well in advance, so that unsold products can be moved out and storage space isn’t unnecessarily occupied.
- Lowers Operational Costs: One of the major benefits that can be reaped by using a good inventory management software is its ability to lower operational costs. By digitizing the process, a significant amount of manual intervention will be reduced which will lower manpower cost. Through the use of a good software to manage inventory, a company can lower operational cost significantly.
Things to consider when buying an Inventory Management Software
Lot of companies make the mistake of managing their inventory on spreadsheets. This opens up the possibility of committing errors while feeding data in the sheets and such mistakes can have a very serious impact on a company's growth and finances. To avoid such glitches, automating the inventory management process
is in a company’s best interest. To leverage the benefits of automating the inventory management process, choosing the right software that meets business needs is important. However, with the myriad of such software available in the market, it becomes difficult for business organizations to identify the right software that will serve their purpose. To help them with the process, here is a list of factors that need to be considered when buying an Inventory Management Software
- Simplicity and Ease of Integration: An important thing to consider before buying an inventory management software is the simplicity to use it and how easily it can be integrated into a company’s operations. If a software is complicated and difficult to integrate into the ongoing process, it will create more problems for the company. Hence, a user-friendly and simple yet feature-rich inventory management software is better than going for complicated processes.
- Accessibility: Another important aspect that needs to be considered while buying an inventory management software is accessibility. Business owners and employees responsible for managing inventory should be able to access the software anytime, anyplace and from any device. Choosing a cloud-based software is better as it is cost-effective and most often does not necessitate any hardware or software installation. In addition, cloud-based software can be accessed at anytime, anywhere and from any device. All that is required is a good internet connection.
- Price: Price is one of the primary considerations while choosing an inventory management software. As most of the vendors display upfront cost, which can be remarkably low and lure the customers but these solutions come with hidden costs. Therefore, before buying any software, it is important to check if there is any hidden or upgrade costs.
- Easy Data Importing & Exporting: With regular innovation of technology, even the inventory management software keeps upgrading and the need of new and upgraded solution never ends. So, when a company replaces the outdated inventory management software with a new one, they have to transfer their existing data to the new solution. Transferring data manually takes a lot of time. Therefore, to save time as well as human effort, it is important to consider an inventory management solution that makes data importing and exporting easier.
- Analytics: Analytics is important as it gives businesses an overview of how it is doing in terms of growth and revenue and helps business owners take important decision for the benefit of the company. Analytics is therefore important in an inventory management software as it provides an overview of the warehouse and the stock the company has. This will help in taking better business decisions as well as manage inventory in a better way.
Must-have Features of an Inventory Management Software
- Inventory Tracking: The primary function of inventory management solution is tracking the company's inventory. This includes received goods, number of fulfilled consignments, stock available in the warehouse, etc. Inventory management software ensures that the company has sufficient inventory in its warehouse to serve the needs of customers better. Therefore, a software that comes with inventory tracking feature is essential as it helps in managing stocks in a better way.
- Reporting: Reporting is another must-have feature in an inventory management software. Reports are essential for any organization as it helps in improving efficiency of a business and know how it’s doing in terms of profit margins. This feature is significant as it makes possible for a company to know about the demand and supply ratio of its products and determine the need of inventory in the coming days.
- Order Management: Managing sales and purchase is an important business function. But, manual sales management is prone to errors and also time-consuming. Hence, order management is a must-have feature of an inventory management software as it helps not only in managing sales and purchase of goods but also in controlling stock levels along with invoice generation and billing.
- Barcode Scanning: Another feature that is a must-have for every inventory management software is barcode scanning. This feature is essential as it lets businesses swap over data electronically. It also allows retaining wall asset inventory and managing warehouse with electronic tracking of inventory and controlling of shipment. Thus, improving efficiency and productivity of a company besides saving a lot of time.
- Security and Backup: Irrespective of the size of a company or which industry it deals in, security is one of the most important concerns of every business organization. In addition, the increasing risk of data theft and hacking has made it immensely important to keep the data secured no matter whether the inventory management system uses internal server for hosting or is hosted on the cloud. Moreover, loss of any data can jeopardize the effort that goes into collecting the data. Therefore, it is important for an inventory management software to have an additional shield of security to keep the data of the company secure and safe.
Industry Specific Use of Inventory Management Software
- eCommerce Industry: One of the biggest challenges faced by eCommerce business owners is effectively managing and tracking their inventory. The problem escalates as the business grows. Manually adjusting, managing and tracking inventory becomes difficult as the demand increases and the business grows. Mismanagement of inventory affects the business as it might have to incur heavy loss, which hinders the growth of business. To keep at bay any such risk, having a good inventory management software is important.
- Manufacturing Industry: A lot of raw materials are regularly required for manufacturing different products. With the rise in raw material cost, the only way to cut-down on the expenses is by improving efficiency. And, as a manufacturing unit grows, manual management of inventory is not just burdensome but is also prone to errors. Relying on manual management of inventory is not feasible. This is where the need of a good and robust inventory tracking system comes into play. For manufacturing business, automating the inventory management process can go a long way as it helps in cost-cutting, reducing workload and error, and tracking inventory in a better way.
- Pharmaceutical Industry: Pharmaceutical business involves both selling and manufacturing pharmaceutical products for the healthcare industry and both the verticals require proper management of inventory to avoid any loss to the business. And, this is one of the most critical aspects as it involves a lot of resources. Automating the process of stock management by implementing a good and robust inventory management software helps in monitoring stock and controlling wastage of material. It also helps in identifying the amount of raw material required for production, settling inventory balances, creating inventory reports and setting targets.
- Hospitality Industry: The need of inventory management software in the hospitality industry cannot be overlooked. Whether it is a small or a large hotel, it constantly works towards providing the best experience to customers so that they keep returning. Every asset of the hotel needs to be kept in good condition and well-managed. However, keeping track of goods required in housekeeping department, kitchen or the restaurant manually isn't easy and error free. Therefore, having an inventory management software eases the burden of tracking stock required in different departments.
- Healthcare Industry: Running a nursing home or a hospital isn't a piece of cake. One of the primary motto is serving patients in the best possible way by providing best health care facility. Healthcare setups also need to keep stock of medicines and different medical equipment. But, managing and tracking such stocks manually isn't easy. It requires reams of paperwork, which is not only time taking but is also prone to errors. In addition, there is a risk of misappropriation of data, which can incur loss. However, with a good and robust inventory management software, managing and tracking the inventory becomes easier and hassle free.