[Inventory Management 101] How to Choose the Best Inventory Management System
Still using Excel to manually place orders for your store and count the inventory of products? Come and get to know the new generation of online inventory management system!
An effective inventory management system can not only easily deal with the inherent problems of store inventory, but also greatly save the business's operating costs. With the changes in the digital age and cloud technology prevails, there are a lot of different kinds of online inventory management systems provided for businesses on the market, but how do we find the best inventory management system for company?
To find out the most suitable inventory management system for your company, you must first fully understand the inventory process and the basic knowledge of inventory management, and then choose an inventory management system that can easily solve your troublesome problems in response to your own inventory pain points.
In this article we will explain the in-depth understanding of what inventory management is and its importance, and what to look for in good inventory management software.
Who needs to know more about inventory management?
EVERY BUSINESS OWNER needs to know more about inventory management!
Inventory management does not simply refer to the storage of goods, but a series of supply chain operations from the merchant purchasing goods from the supplier to delivering the goods to the customer. The entire process covers ordering, cost calculation, storage, transfer, and various tedious management tasks such as replenishment are definitely a part of brand management that cannot be ignored. Therefore, no matter what kinds of goods you sell, you need to understand inventory management and develop good inventory management habits for your brand, in order to avoid the inventory problems such as shortages, delayed order delivery, or excessive inventory and storage time.
Meanwhile, you need to do your best to control costs and inventory to prevent insufficient operating capital. If there is too much product inventory, it means that most of the company's funds are backlogged in slow-moving goods, making it difficult to turn funds, or even lose money. It can be seen that there are countless things that businesses need to pay attention to and deal with in inventory management, and they can't be done easily alone. At this moment, a complete inventory management system can act as the right and left hand of the merchant, helping you to easily deal with troublesome inventory problems!
What is an Inventory Management System?
Inventory management system is a software solution that effectively controls and tracks the entire logistics and cost management process of warehouse operations, allowing merchants to uniformly manage the operations of goods from supplier -> warehouse -> to store shelves or customers, and improve the transparency of inventory information to facilitate merchants to control inventory. The main features of the inventory management system include: warehousing and delivering management, product information and inventory management, etc., in order to control the inventory in the best state and maintain a healthy and stable flow of working capital.
Why you need an Inventory Management System?
As a merchant, have you ever experienced the following problems:
Rely on manual filling but often make mistakes?
Always found that the inventory and sold quantities of the product do not match during stock take?
Always found that the product was sold out or expired after the customer placed the order?
Waste too much time on managing inventory and unable to concentrate on sales and marketing?
As we all know, it is time-consuming and laborious for merchants to organize and update their inventory alone. As the orders continue to increase, the labor and time costs required to operate a store will also continue to rise.
To improve inventory control and warehouse management, of course, a complete inventory management system is a must for business! With an online inventory management system, you can manage inventory more efficiently and easily solve all business troubles! Through the inventory management automation, it helps reduce the chances of your staff making mistakes, maximizing resources, saving additional operating costs, and allowing you to process orders more quickly. Also, you can track the product information and data in real-time to timely adjust replenishment and inventory management strategies based on the inventory data.
5 key features to look for when choosing an inventory management system
Nowadays, the rise of online inventory methods has made it easier for business to oversee inventory control and make decisions on inventory allocation and restocking, etc. With the right inventory management system in place, all your data is automatically recorded in real-time, which allows you to maintain supply chain efficiency. Come and take a look at the following 5 key features of inventory management systems to find out the perfect inventory management system for your brands!
1) Inventory Tracking in Real Time
When managing a business, there is nothing more worried about than any omissions or errors in inventory and sales data. Therefore, the primary feature of an advanced inventory management system is to track all inventory data in real time! No matter how many warehouses you have in different locations, the system can record every inventory flow of each item from purchase -> to warehouse -> to sales order for you in real time, keeping up to date with the latest data at all times.
You can also analyze the data that integrated by the inventory management system to calculate the optimal inventory and order quantity for each product, which greatly reduces the loss caused by product expiration.
2) Multichannel Retail Integration (Physical Store/ Online Store/ Warehouse)
If you want to make full use of the inventory management system, you can choose an inventory management system that can fully integrate with the front-end and back-end systems of all your online stores, physical stores, and warehouses. The data connection between the systems can help you speed up the order processing, and more efficiently manage inventory in online stores and physical stores.
In addition, the integration of the inventory management system and the store front also helps to manage the product replenishment and transfer between warehouses in a more direct way. For example, the Store Manager can skip redundant procedures and apply for replenishment directly to the warehouse according to the store's inventory. This prevents the loss of sales revenue due to out-of-stock situation, and at the same time makes the process of replenishment and warehouse transfer more smooth and easy to control.
3) Systemisation of Purchase Order Process
As you know, the process of procuring goods is also a part of inventory management. An advanced inventory management system can help you save all the suppliers’ contact details and information so that you can check the supplier list at any time in the future. At the same time, you can also review the order history and directly create purchase orders through the system, and automatically update the inventory quantity after the receipt is confirmed, which will help you greatly save operating time!
4) Easily Manage Product Batches & Expiration Dates
Controlling cost-effectiveness is of the utmost importance to your business! With an inventory management system, you can organise products in different batches and specify batch numbers and expiry dates. Meanwhile, the system can automatically update inventory in response to the number of expired products, which helps you formulate sales strategies in time, and avoid waste due to expired products.
5) Moving Average Cost Calculation
Since the cost of newly purchased products may not be exactly the same as the cost of existing products, you will need to calculate the moving average cost in order to accurately understand the actual cost and profit of the products sold. A good inventory management system can provide you with the moving average cost of products for tracking, allowing you to view operating costs and benefits anytime, anywhere, and formulate business strategies in time before problems expand!
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