Inventory is an integral part of many businesses. More than just a collection of things that you can use or sell, inventory often makes up a large chunk of a company’s assets and investment. Put simply, inventory is money. How you manage—or fail to manage—your inventory competently can have far-reaching effects on your bottom line.
Speed & Accuracy
Have you ever sold a product then discovered that you had none in stock? Or perhaps you have thousands of items ordered months ago that are just gathering dust in the warehouse? Inventory reporting can help solve such problems and more. Quality inventory management software coupled with digital devices like scanners can provide accurate, real-time insights into your inventory.
Too many companies are still trying to manage inventory on pen and paper or with Excel spreadsheets. Although these conventional ways of inventory management have a low barrier to entry, they are woefully time-consuming. Having to wait at the end of the paper chain to update your inventory can lead to discrepancies and loss of business as customers become impatient.
The speed of your fulfillment cycle determines the profitability of your business. When you have digital inventory management, you can sell and ship products out quicker and increase customer satisfaction. You can also consolidate your stock, reorder products, and maintain a lean inventory. With lower carrying costs, you save money on your warehouse space as well.
Furthermore, manual inventory processes are prone to human error. A calculation mistake or a badly-written numeral could lead to a whole cascade of misrepresented data and additional expenses in trying to sort out the problem. This can be avoided with a computerized system that checks items in and out of the warehouse automatically by barcode or RFID tag scanning.
Facilitates Automation
Inventory management software allows you to introduce automation and reduce manual labor. Instead of having to hire multiple people to undertake the tedious process of inputting product numbers and codes into a spreadsheet, you now only need to hire one or two people to use barcode scanners. The amount that you save on salaries will pay for the software.
Not only is manual processing labor-intensive, but it is often also considerably slow. Each step of the recording process is separate from the other and information often has to be repeated in multiple forms and print-outs. Inventory management software gets rid of these redundancies by connecting sales, shipping, and restocking through a central database.
This means that your inventory software can automate certain tasks such as creating pre-filled quotes or sending restock reminders. Connecting the key areas of your business allows your employees and managers to spend more time on essential tasks instead of mindless, repetitive labor. Your new, streamlined business will boast better efficiency and higher productivity.
Tracking Trends
A digital inventory management system comes with greater data visibility. Information about your supply chain can be used to remove bottlenecks and improve fulfillment times. Information about your clients and their shopping habits can be analyzed to influence stock purchases and strategic marketing decisions. Both of these will generate more profit for your business.
When you can take a long view of business trends, you can correlate the types of products that sell best at different times of the year. You do not want to sell out over the peak period but you do not want to overstock either. Having historical data to guide you through seasonal sales trends will ensure that you can plan ahead for maximum profit.
Planning your inventory well does more than just improve your sales. it keeps your customers and suppliers happy too. When a customer is met with an ‘out of stock’ sign, they are less likely to return in the future. When you have to pressure your suppliers to fulfill emergency orders, you put a strain on your business relationship and appear disorganized and unprofessional.
Multiple Locations
Utilizing several smaller warehouses can be more efficient and cost-effective than having one large central warehouse. Fulfilling products from a central warehouse can actually cost more when your business reaches a certain scale. Furthermore, multiple warehouse locations spread out the risk of supply chain disruptions such as highway closures or floods.
An agile inventory solution will allow you to easily manage multiple warehouses from a single dashboard. You can have a better view of your overall stock levels and move stock smoothly between locations. By ensuring that each location is carrying the optimal level of lean stock, you can improve your product delivery times while decreasing your carrying costs.
From stock consolidation to customer satisfaction, inventory management is a critical part of your business. Inventory management software can help you to have an accurate idea of your inventory, automate your operation, free up valuable human resources, predict sales trends, and set up multiple warehouses. The benefits to your bottom line are countless.