Sellers are moving more goods online than ever before. It makes accurate inventory management software that much more important. The cost of mis-picks, mis-ships, and returns is high. They are time-consuming and cause frustration for customers. This leads to lost sales, lower customer loyalty, and drives up labor costs.
The coronavirus pandemic (COVID-19) upended a lot of business and disrupted supply chains all over the world. Despite the uncertainty, eCommerce continued to grow. Even with the disruptions, eCommerce sales in the U.S. posted YoY revenue increases of 68% as of mid-April and expect to show overall gains of 18% by the end of the year.
If you’ve ever thought about upgrading your inventory management system, changing the way you process orders, or are still using spreadsheets or homemade software, it’s time to move to inventory management software that can help you sell more.
What Is Inventory Management Software?
Inventory management software is the foundation of an effective inventory management system (IMS). It’s a cloud-based system for tracking inventory quantities coming in and out of your warehouse. IMS features include functions such as tracking inventory levels, picklist routing, and managing locations.
It makes your entire end-to-end process more efficient by managing everything from your suppliers to shipping.
Why Is Inventory Management Software Important?
If you’re a small business just starting out, IMS is a great start. It will give you the functionality to run an efficient warehouse without all the complexities of a bigger warehouse management system.
Small to mid-sized businesses are great candidates for an IMS. That means low SKU counts with a high volume per SKU perform well within the inventory tracking functions of inventory management software.
However, larger companies can benefit from an IMS as well. Enterprise companies new to eCommerce, for example, can benefit from inventory management software. Often, larger companies either have no inventory management system at all, outdated processes, or low maintenance environments. IMS is a gradual step into inventory tracking that doesn’t require months of training, a high learning curve, and an extensive implementation process.
If you’re only using Excel, tracking sheets, or no tracking system at all, inventory management software can track your inventory and sync it across all eCommerce channels. It can help you forecast demand and make reorders easier. This prevents you from over-ordering, under-ordering, and sending mis-shipments of quantities from the moment they enter your warehouse to when they leave. Better yet, if you’re a small business with an end goal to scale up, inventory management software such as SkuVault can grow with your business.
In the recent past, companies relied on local inventory software. It might be something created in-house, a network of interlinking spreadsheets, or installed on local machines. It might have worked fine in the past, but in today’s hyper-competitive environment, cloud-based inventory management software allows you greater flexibility.
Do I need an inventory management system or a warehouse management system?
This guide can help you decide.
With cloud-based inventory management software, the cloud stores all of your inventory and warehouse information. You can take your business anywhere, at any time, access data on multiple devices, and manage across multiple sales platforms. With real-time sync, it provides software that integrates with your eCommerce and other business systems so everything stays in alignment.
The Benefits of a Cloud-Based IMS
Besides the obvious benefit of being mobile, cloud-based inventory management software comes with other great benefits, too.
Security
Cloud-based storage is more secure than a local server. Local servers don’t come with a backup system and run the risk of getting breached by hackers, getting hit by ransomware, or picking up a virus that wipes out your data. When your data lives only on local machines, you run the risk of losing everything: sales reports, customer data, supply chain orders, inventory counts, and any other inventory data important to your business. Sounds like a nightmare, right?
In the cloud, your data is protected on secure networks with built-in redundancy. In the event of a problem, disaster recovery options are much easier to implement to get your business back up and running.
Better ROI
Local inventory management software often requires expensive hardware that needs to be maintained and upgraded. You can spend a lot more money upfront on hardware that you might outgrow in a year.
The implementation of the software isn’t a walk in the park either. The money you will spend on labor for hardware installation pales in comparison to cloud-based software that comes with its own IT team. Any upfront fees of rolling out a cloud-based inventory management system can quickly be offset by the advantages.
eCommerce companies that use SkuVault see an almost immediate improvement that helps you sell more. Customers report as much as 87% faster fulfillment, 90% out of stocks, and 83% mis-ships. Eliminating these errors cuts your costs and can significantly improve your margins.
Faster Integrations
You can use cloud-based software right away. There are no long wait or lag times from implementation required.
Scalable
Cloud-based inventory management software can scale with your business. Need more features to accommodate more users? No problem! You can just move up to the next plan.
Maybe your sales hit an unexpected spike and you need more storage space for an influx of SKUs. No worries. You can upgrade your inventory management software as your business grows. With a localized inventory management software, you’ll constantly be purchasing and installing new hardware each time your business grows or you may wind up buying capacity you don’t need right away.
Save yourself time and money now to make more time and money later with cloud-based inventory management software.
How to Use Inventory Management Software
Implementing inventory management software will take a little bit of time, but the installation and rollout are surprisingly easy. By integrating your other eCommerce and business software, you’ll quickly be up and running – more efficiently.
Become Familiar with the Software
Take time to explore and familiarize yourself with the inventory management system before implementation. You should assign a point person to oversee the integration and manage the training process. learn the software and teach other users, or hire someone to come in and teach everyone. SkuVault has onboarding specialists that can help with both the installation and training.
Picking and Packing
Picking and packing are the bread and butter of inventory software. With SkuVault, picking items is customizable and streamlined. Picking is part of the order fulfillment process where an item is picked from a location based on a picklist. Paperless picklists can be generated and optimized pick routing occurs within the software to reduce travel time and improve efficiency.
Go beyond wave picking:
Automate pick sessions with Hyper Picking
SkuVault’s picking process is streamlined because pickers simply scan the product barcode and the location barcode. Barcoding mitigates the risk of picker grabbing the wrong items by accident. If they scan the wrong item, it won’t match the picklist and will generate an alert. This helps prevent mis-picks and mis-ships.
It’s then brought to quality control (a feature later discussed) for shipping to be packed away to customers.
This picking process is customizable allowing you to choose from a variety of storage configurations in your warehouse. Rows, shelves, and bins can all be barcoded for tracking. You can use a traditional storage method, or the “chaos method” pioneered by Amazon, which allows you to place products wherever you want. When everything has a barcode and the inventory management software is tracking it, you can rack merchandise more quickly into available slots. Your software tracks its location automatically.
Receiving Inventory
Once an item has been purchased, it’s received from the purchase order. SkuVault inventory management software allows you to scan the new product into the system after you check the purchase order number against the original purchase order. SkuVault then checks the received item against the purchase order to ensure accuracy and check discrepancies. By collecting receiving orders, you also have concrete data to look at later for better purchasing decisions.
It’s also important to remember the amount of data accompanying goods into receiving. It includes vital information for the rest of the inventory process, including lot number, serial number, cost, date, quantity, etc. With an IMS, all of this data is automated upon scanning. That cuts down on error rates when transferring information into the system.
Shipping
Not all inventory management systems will come equipped with a dedicated shipping feature. That’s more of a warehouse management system thing. Skuvault, however, fully integrates with popular shipping software, such as ShipStation and ShipWorks.
The built-in quality control features within SkuVault help the shipping process. Quality control checks orders for accuracy as they are being prepared for shipping.
An End-to-End Solution
When integrated with shipping software, SkuVault pushes locations of inventory into the software, giving customers the option to use invoices as pick lists. It pulls orders from the software to generate optimized pick lists that can be used as packing slips. All of this eliminates the need for manual updating and adjusting, which significantly reduces mis-picks and mis-ships.
The automation of an IMS throughout the entire product journey in the warehouse is crucial to every step when it comes to efficient operations.
Cycle Counting
Cycle counting is easier with inventory management software. By conducting perpetual inventory auditing procedures, cycle counts can speed up manual inventory checks by checking high-value inventory more frequently.
Without an IMS, companies may only do an exhaustive physical count once a year. It’s time-consuming and you may need to shut down operations while it’s happening. That costs time and money. Manual counts also have high error rates.
With an IMS, you can still do annual physical counts, but you can also practice cycle counting on an on-going basis. This lets you do samples to estimate accuracy across your entire inventory and keep your operations running at full speed.
Data Reports
A big advantage of an inventory management software system such as SkuVault is the incredible depth of reporting. This allows you to make better decisions that are driven by the data and not just your gut instinct. Here are just a few things SkuVault can track and report:
- Just in Time (JIT)
- Re-Ordering
- Out-of-Stock
- Weeks-on-Hand
- Turn Rate
- Purchasing
- Forecasting
- Purchase Orders
- User Accountability
- Assembly and Print-to-Order
- Order / Receiving Discrepancy
- Supplier Reporting
- Efficiency
- Class / Brand
- Zone Management
- Transaction History
The visibility of data in real time trickles down to every business decision. Better business decisions mean lower costs and better ROI.
Tracking Inventory Levels
Inventory management software provides several important ways to track inventory levels.
Product status, for example, is a feature in SkuVault that enables you to categorize your inventory by unique descriptions or details. If you wanted to categorize something by “best seller,” you could type that into the search bar and have all your inventory in that category collected at once.
Quantity updates are another robust feature in SkuVault and crucial especially for multi-channel sellers. Sales across online marketplaces are automatically updated in real-time to reflect available inventory levels.
The bottom line is that tracking inventory levels is essential to a sustainable business. If you don’t know how much inventory you have or where it is in your warehouse, it makes all other aspects of your job almost impossible. Lost merchandise wastes your purchasing dollars.
User Accountability Tracking
You’ve heard that quote from the computer world: “Garbage in, garbage out?” It’s the same with inventory managing software. It’s only as good as the people putting it into action. Fortunately, much of the data being entered is doing electronically which dramatically reduces the potential of human error. Also, SkuVault has a user accountability feature. This tracks the actions of every user and every transaction.
When there’s a problem, you can pinpoint where it is and how it happened. This also reduces errors and can help isolate where additional training may be needed or when systems need to be re-imagined.
User accountability reduces the potential for employee theft. When everything (and everyone) is being tracked, it’s harder to hide missing inventory. It also cuts down on mis-picks or mis-ships.
Common Questions on Inventory Management Software
Here are just a few of the questions we get asked along with the answers.
Can an IMS manage multiple sales channels?
One of the big benefits of an IMS, such as SkuVault, is the ability to keep all your sales channels and platforms in sync at all times. This avoids over-sells. When you sell out inventory but still having it show as available, customer orders can get back-ordered or delayed. Neither builds customer loyalty.
Another great feature of SkuVault is the ability to use inventory management buffers either channel-wide or on individual products. These buffers will override the actual quantities. Options include maximum quantity buffers and low quantity cutoffs. It’s a great way to create a sense of urgency with buyers.
I’m planning on increasing the number of SKUs I’m selling. Is that a concern?
You’re not alone. 39% of operators say they plan to expand their product line over the next 12 months. SKU proliferation is definitely a trend. SkuVault can handle all of your SKUs and keep them in sync across every sales channel and marketplace. A robust reordering module can help you sell more by making sure replenishment happens on a timely basis and there’s enough safety stock on hand until replacement inventory arrives.
What if I want to sell SKUs as kits or bundles?
Selling kits and bundles is a great way to increase sales through several SKU variations. SkuVault makes kitting and bundling easy. You can develop different kits types, or bundles, to accommodate increased customer options.
SkuVault also lets you dictate alternative SKUs for kit components and automate every step of the kitting process. You can juggle your kits while always keeping individual SKUs accurate.
Are companies investing in inventory management software in 2023?
A survey of eCommerce companies and service providers shows the two biggest areas of tech investment in 2023 are expected to be cloud logistics and warehouse automation. Close behind is the predictive analysis and business intelligence to make better business decisions. The right inventory management software, such as SkuVault, can encompass all of these things and more.
Summary
It all comes down to real-time visibility and scalability. You need an inventory management software that will offer data and inventory levels at a glance, an easy way to keep your inventory accurate across every sales channel, and one that can give you up-to-the-minute updates.
No one starts a business with the intent to stay stagnant. You start a business to scale up and make more money. To do that, you need inventory management software that can grow with you. Inventory management software gives you the freedom to dream bigger, do bigger, and sell bigger.
So, whether you’re just starting, or you’re an established business looking to jump into the eCommerce game, inventory management software is your diving board. Jump in and get started.
Contact SkuVault today for a demo of our ecommerce inventory management software. We help companies sell faster, pick faster, ship faster, and sell more.
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