Four Reasons Why Inventory Automation Saves Money

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If your business is stock based, then inventory may be its biggest asset – whether your business is a wholesaler, manufacturer or retailer. Inventory management is essentially the practice of maximising the use and value of your business’ biggest asset. Inventory automation can unlock further efficiencies, allowing your business to grow to its full potential. Let’s look at how and why your business should automate its inventory management function.

Automation Options

Because of the breadth of the inventory management function within a business, the options to automate are extensive. Many inventory management tasks can be automated by software, freeing up staff time to develop the business. For example, many inventory management software programs provide for automated stock re-ordering, where the inventory management automatically prepares a purchase order for authorisation once the level of a particular inventory item drops below a given threshold.

Inventory automation can also extend to the physical tools used to manage stock in the warehouse or in transit. When stock is received, shifted or dispatched, details of the movement are usually recorded in the inventory management system. Historically, businesses have recorded this information on clipboards or notebooks, and more recently, that information has been entered into the inventory management system. Rather than manually recording and entering information, an automated system may use barcodes and scanners to speed up data entry. A business might even use RFID tags to eliminate the need to scan individual barcodes one by one.

What are the main benefits of inventory automation?


Automating inventory management reduces the administrative burden of keeping track of stock. Because there is less ‘legwork’ involved, your staff are more likely to stick to your business’ inventory management policies.


If your business is to be scalable, it is important to implement a low effort inventory management system. As sales increase, the potential for inventory management to go wrong increases – particularly the risk of stockouts or unsustainable inventory accumulation. Manual tools such as paper-based records or spreadsheets are unsustainable in a larger business. Manually checking in with staff to get up-to-date stock counts may be a minor hassle now but if your business grows twice as large, the effort increases at least twice as much.

Inventory Automation Reduces Human Error

Spreadsheets and clipboards are error prone. Spreadsheets and basic databases have limited tools for importing data, resulting in frequent data entry errors. If a staff member must enter 500 values into a spreadsheet or database, one or two errors are unlikely to stand out. Over time, these small errors can build up potentially resulting in a wide variance between book inventory and the inventory which is actually in the warehouse.

Manual Handling is Expensive

Although investing in inventory automation through an inventory management software may seem like an unnecessary expense, in reality it is a move that is likely to save your business a significant amount of time and money. Manually tracking inventory is expensive, both in terms of the potential for error and the lost opportunity to spend time developing other areas of the business.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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