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What is Inventory Management System

What is Inventory Management System
January 21, 2021

An inventory management system is a crucial part of retail, service, wholesale, and numerous other industries that have an inventory. When it comes to managing an inventory, manual work can be very time-consuming and tiring. Instead, an automated system is required to manage the inventory, keep track of the products, and ensure a consistent workflow. The following blog outlines what this system is about and how it can benefit the business. But first, let’s start with the basics.

What is inventory management system software?

Inventory management is a complicated process, especially when the business has a considerable inventory or multiple warehouses. However, the goal of the process is simple – streamlining inventory management.

Complete Overview

Inventory management system software is basically a technological solution that helps in monitoring, overseeing, and maintaining the products available in the inventory. These products may include company assets, finished products, or raw materials that have to be sent to the end consumers or the vendors.

Many inventory management systems are also integrated with other software solutions like purchasing systems, accounting systems, and even customer portals. A good inventory system ensures that the company can manage all of the warehouses, regardless of where they are located, through a single platform. Constructive inventory management software also allows the company to make effective supply chain decisions by using value-added data.

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The Advantages of Using An Inventory Management System

Companies choose inventory management systems for numerous benefits, particularly for optimizing the way the inventory is managed. Here are some crucial benefits of using this system:

1.Centralized process

Companies usually have more than one stock locations, which makes it quite difficult to keep an eye on every product category. The more warehouses are there, the more challenging it is to manage the orders. However, using an inventory management system, you can use the automated system to find an item quickly, check its availability and expiry data, track couriers, and process orders.

2.Stock Management

An inventory management system is especially beneficial because it facilitates stock or inventory control. Before processing any order, it is essential to know whether the product is available in the inventory or not. In case the product is not available, and the order is placed, it can place a terrible impression on the customer.

On the other hand, if there is already an ample amount of a product in the inventory and you order more of it, then there can be an excessive surplus in the inventory. Therefore, an inventory management system can come in handy, allowing you to know the stock availability and levels.

3.Improved efficiency

As already stated, inventory management is a very complex activity. However, using automated software, you can make everything simpler and efficient. For instance, if you want to make an inventory report by the end of the month, you can simply rely on the software to generate an analysis. In this way, you won’t have to cramp over excessive paperwork. An automated system also reduces the chances of errors.

4.Minimal Costs

With increased efficiency and productivity, an inventory management system also prevents financial losses. Manual paperwork is prone to human errors. Unnecessary purchases, excessive stock storages, and late deliveries are also likely if you are not sure of your stock levels.

However, with an integrated and automated system, you won’t have to spend your resources on managing the inventory and dealing with the errors. An automated software also frees up the responsibilities of the workers, allowing them to spend their time on tasks that are more important.

5.Enhanced Customer Satisfaction

Inventory management software also improves customer satisfaction, as orders can be fulfilled in an effective manner. Real-time information allowsthe customer support team to know whether a product is available or not. Tracking features keeps track of the shipments, further ensuring that the customers can receive their orders on time.

Many inventory management systems can be integrated with Customer Relationship Management (CRM) software. In this way, customers can easily communicate with the business, and their queries can be resolved.

6.Improved Reporting & Forecasting

This software also helps in planning and forecasting the inventory needs of the business. With appropriate inventory reports, the business can find which products are high in demand, which ones need to be reordered, and how long raw materials can last in the future.

All of this data is crucial to make effective decisions, come up with an appropriate strategy, and improve the productivity of the business.

Some Importance Features of an Inventory Management System

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Although not all inventory management systems come with the same features and the software specs differ according to the industry needs, there are some features that you need to consider. We recommend searching for these features when you are looking for an inventory management system:

1.Stock Management

Using this feature, your company can monitor the movement of the stock or products from one place to another. Especially when the goods come out of the warehouse, stock management can update the data in real-time and allow all the system users to see the changes.

2.Procurement Management

With this feature, the system features can set the minimum levels of stock that should be present at any time in the inventory. So whenever the stock level is below the required amount, the system can alert the users. With timely notifications, the users can then reorder the product and avoid any sort of hassle.

3.Barcode Scanning

Barcode scanning is particularly beneficial for those working in the wholesale and retail industries. Using this feature, you can create barcodes automatically and label them easily. An efficient inventory system also ensures that the products can be searched using the barcodes.

4.Supplier Management

This feature allows the management to manage, store, and organize all the information associated with the companies’ suppliers. The users can easily search for the supplier who can support product delivery. They can also compare the prices offered by the suppliers.

5.Shipment Tracking

Shipment tracking is crucial for both management and customers. Since the company relies on a third party for shipment, it needs to ensure that the items are in safe hands. On the other hand, customers also want to know when they will receive their products. A shipment tracking feature allows customer service to answer their queries regarding delivery.

6.Inventory reporting & analysis

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An effective inventory management system also helps in reporting. A complete overview of analytic data can be seen with a single tab using such a system. Be it stock movements, inventory turnover, stock valuations, or stock quantities, an inventory management system makes it easy to view the data in real-time and make effective business decisions.

So if you are looking for an inventory management software company, make sure it is reliable and trustworthy. An inventory management system can surely advance your short-term and long-term growth while cutting the cost required to manage the inventory. As the business world is becoming more competitive, an effective inventory management system is a must to automate your operations, manage the company’s most essential resources, compete in the market, and win the hearts of the customers.

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