For many stock-based businesses, inventory is the business’ largest asset. Managing inventory well is important for business success – failing to manage inventory well can lead to stock outs, escalating operating costs and out of control lead times. Many businesses have turned to online inventory management software to simplify and automate the thorniest aspects of stock control. Let’s take a look at some of the core features you should look for in an inventory management software package.
The key feature of any inventory management system, whether software or paper-based, is knowing how much inventory you have and where it is located. Inventory management software enables a higher degree of accuracy. Many inventory management tools will support real-time, perpetual inventory tracking; this means that every transaction will update the inventory record in real-time, keeping you informed and making it easy to find stock when you need it. The ability to use barcoding or RFID tags to keep track of inventory sets best in class software apart from the rest.
For the data it collects to be usable, most inventory management tools will also include in depth reporting capabilities. You can break stock levels, cost and tracking information down by product type, supplier and location, making it easier to identify what’s driving good and poor performance.
Inventory management software is as much for manufacturers as it is for the wholesale and retail sectors. Effective manufacturing inventory management involves getting the right inventory in the right place and carefully monitoring production costs. Inventory management software will often have a bill of materials function (essentially a recipe for your product), which allows you to quickly select the right components or materials from the warehouse for a given product as well as to ensure that the cost of every component is accounted for.
For lean manufacturers, inventory management software is crucial; when you create manufacturing assemblies in inventory management software, you can also trigger the ordering process for the stock you need.
A key feature of inventory management software is the ability to manage your procurement process from end to end by creating purchase orders, tracking shipments and recording stock as it is received. Many online inventory management systems support automatic reordering, where purchase orders are automatically raised when inventory drops below a given threshold or when a customer places an order.
Although supplier relationship management software exists, inventory management software will generally provide the key features you need to manage a full range of suppliers. This typically includes supplier contact details, product lists and prices and performance data so you can keep track of supplier reliability.
Sales and Shipping
Inventory management software will typically capture sales and fulfilment, updating inventory levels as stock is sold. A useful feature is the ability to generate fulfilment documentation such as picking and packing notes and and invoices.
Many inventory management products will also incorporate customer relationship management features. For businesses who offer products at multiple pricing tiers, inventory management software enables you to match price points to customer groups.
Access and Integration
Many businesses have previously used spreadsheets or locally hosted software to manage inventory. Although it will suit some businesses to download inventory management software, most businesses will benefit from access to their inventory data out of the office. Online inventory management software allows users to access inventory information on the road, or from anywhere with an internet connection.
The SaaS ecosystem is getting larger, so also consider whether support for integration with other SaaS platforms is an important feature for you. Many online inventory management products will integrate with your accounting, customer relationship management, point of sale and ecommerce solutions.
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.