Inventory management system simplified
Imagine that you are the owner of a large fruit store. Your inventory is apples, oranges, bananas, pineapples, grapes, pomegranates etc. You have arranged all the fruits in a circular rainbow pattern to attract customers.
Business is good. But as your business improves, you buy more and sell more. At some point, you find it challenging to manage giving out orders to buy different fruits, as each fruit gets depleted at a different rate.
It’s now even more challenging to maintain your unique circular rainbow pattern of showcasing fruits.
It would be great if you could simplify and automate the system.
Let’s add a label to the position of each type of fruit and the means to track it all. And, how about some alerts when there’s too much of one fruit and a shortage of another?
That’s inventory management for you and automating the whole process with a system is the best way to keep tensions away.
Definition of an Inventory Management System:
An inventory management system is a tool that enables you to monitor products through the supply chain solutions of your organization. It optimizes the entire continuum from order placement with your supplier to distribution of orders to your customer, mapping a product’s complete journey.
Top 6 Features of a Good Inventory Management System
- Order records: Create a bird’s eye view of purchase order records. You can quickly recognize which goods are in demand, both on an ongoing and seasonal basis, and plan to meet the needs of your clients.
- Track the assets: Use serial numbers, barcodes and tracking numbers to have a track of what goes in and out. It is particularly useful when dealing with stocks that have a seasonal increase and fall in demand.
- Inbound and outbound logistics: Your manager will get alerts on the stocks that require refilling. He/she will get precise information about the type and quantity of stocks.
- Manage your accounts: Inventory management services such as cost layering, disclosures, overheads allocations can help you evaluate your accounts better.
- Will help in promotional discounts: When there is over- or under-stocking next to a given threshold, you receive warnings and updates. This lets you position orders or give promotional discounts to clear additional inventories.
- Multi-Location management: Manage many storage and distribution locations within a single inventory management system.
Is it wise to invest in an Inventory Management System?
Of course, it is. Because it is more profitable with an warehouse inventory management system in place.
- You need fewer employees to manage the whole account, paperwork and hassles.
- You can cut down your losses due to irresponsible employees.
- You can deliver and pick up stocks on time.
- You save more quality time.
- You can focus on more important areas of the business like marketing and customer relations rather than focusing on “not-so-creative” works like managing your inventory and shouting at employees.
Here’s why again:
Suppose your inventory is expensive screws, you might lose 2% of your inventory every month due to misplacement, incorrect storage bin. This costs you about $100 in losses.
Then you find an inventory management service that barcodes each screw and scans every movement and cuts losses to less than $5.
That means with the software you are $95 to the good each month- so even if the software costs approximately $1000 – it basically pays for itself within 10 months. That’s how you need to think.
And that’s a good investment.