Inventory Management Software

Knowing where your inventory is and how much you have is the ultimate tool provided by an inventory management software

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The Problem

Inventory is a company’s biggest asset, yet many companies struggle to understand the importance of inventory management. It doesn’t have to be this way. To mitigate current and future problems, implement an inventory management software to help you streamline your warehouse and logistics operations, reduce mistakes, and improve customer service. Let’s break it down further.

What is Inventory Management Software?

Inventory management software tools are programs designed for tracking inventory levels, sales, orders, deliveries, and other warehouse or distribution center needs.
Beyond this, inventory management software can help manufacturers create things like work orders, purchase orders, bills of materials, and a wide range of other documents needed in production.

Using inventory management software can help a business better understand:

01
The flow of products through their warehouse

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Spot issues in their supply chain

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And ensure items are shipped quickly, accurately, and efficiently

The right inventory management software (IMS) will serve as a central hub for your inventory data. It will manage and measure the amount, location, pricing, ordering, and fulfillment process for inventory across your platforms and channels.

What is eCommerce Inventory Management Software?

eCommerce inventory management software gives you an accurate count of what’s in your system at any time, helps you forecast future demand, and ensures you have enough stock on hand to handle fulfillment.

One of the key ways it achieves this is by integrating with your online sales channels and marketplaces.

eCommerce inventory management tools will sync the items in your warehouse with your online listings across all your different sales channels. This helps ensure you always have the right amount of product available on all your different marketplaces, which in turn means you’ll be able to fulfill your orders and create happy customers.

Your eCommerce inventory management software will integrate with your existing supply chains, third-party sales channels and marketplaces, vendors, and drop shippers.

An eCommerce inventory management system can tell you at a glance which products are out of stock, in stock, understocked, and overstocked. Each of these items is important when it comes to the efficient management of your inventory.

Once orders are placed, your IMS can generate pick lists for warehouse teams to pick and pack. eCommerce inventory management software can guide them through the most efficient route to the warehouse, aisle, shelf, and bin location to prepare orders for shipping. The eCommerce IMS should integrate with shipping solutions to create a more efficient workflow.

Similarly to an IMS, an eCommerce IMS tracks and manages inventory, but also comes equipped with features for eCommerce sellers.

Why is Inventory Management Software Important?

If you’re only using Excel, tracking sheets, or no tracking system at all, costly mistakes add up quickly. Inventory management software can track your inventory and sync it across all eCommerce channels and warehouse locations at the same time.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.

Businesses of all sizes can benefit from using an IMS. If you’re a small business just starting out, an IMS 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.

Even larger enterprise companies can benefit from an IMS. Enterprise companies new to eCommerce, for example, can benefit from the inventory certainty and ability to go online faster using 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, or an extensive implementation process.

Here are 6 key benefits of using inventory management software:

Better Inventory Oversight

Utilizing inventory and order management software ensures that orders are filled and shipped in a timely manner. It also guarantees you have enough inventory on hand to meet demand.

Increased Efficiency in Operations

Inventory and order management software will not only guarantee you don’t tie up money in inventory you don’t need, it can also help you make sure expiring inventory is prioritized rather than going to waste on a shelf.

Minimize Inventory Costs While Increasing Profits

Are you spending a lot of money on carrying costs for inventory sitting in warehouses? Do you have dead stock taking up space and eating into your profits? Inventory and order management software can help you avoid these expenses.

Reduce Costs by Ensuring Order Accuracy

Incorrect order fulfillment and shipping issues cost you money. Inventory and order management software can help you get closer to 100% accuracy, which is guaranteed to improve your bottom line.

Better Customer Service

Having access to real time order status is essentially expected these days. Customers want to know where their order is at each step of the process – from the moment it’s placed until a postal carrier leaves it in their mailbox. Inventory and order management software makes sure you can provide this information.

Fully Automate Manual Tasks

Instead of having employees sitting around entering orders and figuring costs manually, why not automate the process? Order and inventory management software can make creating purchase orders simple with barcode or RFID scanning.

What are the Types of Inventory Management Systems?

When it comes to managing inventory, it doesn’t matter if you track items manually on paper, use complicated spreadsheets, or invest in inventory management software. No matter which method you choose, it will fall within one of two distinct inventory management systems: Perpetual Inventory System or Periodic Inventory System.

Perpetual Inventory System

If you use a perpetual inventory system, you are continually updating counts, stock levels, and other key inventory elements in real time as items are received, sold, shipped, or transferred.

When managed properly, perpetual inventory systems can make inventory management significantly easier because they provide continual, up-to-date information about orders and stock levels.

The potential downside of the perpetual inventory system is that it requires specialized equipment like barcode readers or RFID technology (we’ll discuss both momentarily), which means there is a bigger initial investment when implementing this system.

Periodic Inventory System

A periodic inventory system does not track inventory in real-time. Instead, it tracks inventory by comparing a starting and ending number for tracked items during a predetermined period of time.

To track inventory with a periodic system, you will need to regularly schedule and conduct manual counts, look for discrepancies, and then manually reconcile your numbers for the starting point for the next period.

The downsides of the periodic inventory are that the physical counts often require you to suspend warehouse or distribution center operations. They also require employees to move from their regular activities into inventory counting mode.

On top of that, periodic inventory tracking makes theft or shrink harder to spot and it can be difficult to figure out what’s causing discrepancies between count numbers and recorded numbers.

Barcode Inventory Systems

If you select a perpetual inventory system, you’ll often use either barcode or RFID technology to automate tracking. Let’s break down what each system brings to the table.

With barcode systems, you’ll get greater accuracy and efficiency than traditional manual tracking methods.

Any time a barcode is scanned, inventory is updated. This allows you to continually monitor stock levels, track items in your warehouse, and spot places where logistics operations can be improved.

The downside is the same as mentioned in the perpetual inventory system section. The initial costs can be a challenge for some companies. However, once the initial investment is made, barcode scanning systems can pay for themselves with increased inventory efficiency in short order.

RFID Inventory Systems

RFID stands for Radio Frequency Identification, and like barcode scanning, it allows for more automated real time inventory tracking in your facility.

Unlike the barcode system, where employees will often manually scan items, RFID systems place trackers throughout your facility. As tagged items move past the readers, the inventory information is updated automatically in the system.

Readers can log tags from distances of 40ft to 300ft depending on what kind of technology you’re using, meaning you can easily track items throughout the entire facility without having to send employees to scan them.

The downside of RFID is that the tags are significantly more expensive than barcode stickers. There can be interference issues between the tags and scanners as well.

Companies that move a lot of high value items will probably find RFID worth the investment. Others can benefit from barcodes and save money.

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Is an Inventory Management System Suitable for Small Businesses?

One question we’re commonly asked is whether or not a small business can truly benefit from using inventory management systems and software.

The short answer is, absolutely.

For whatever reason, there’s a misconception that only mid-sized businesses and major corporations with multiple warehouses and global shipping need inventory management systems.

This could not be further from the truth.

There are major benefits to using inventory management systems for small companies that can help them grow their business with fewer headaches.

Freeing up time by automating your inventory process will allow you to focus on growth opportunities. Gaining a better understanding of how product sells (or doesn’t sell) will allow for better forecasting and stock management.

Beyond that, an inventory management system will help you become more efficient by streamlining your shipping and reducing errors in picking orders. You’ll even have a better handle on returns.

Inventory management systems and software are a game changer for small businesses. Waiting to explore these tools until your company is “bigger” is a mistake that can delay your growth and cost you money.