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What is inventory management software?
Inventory management software monitors inventory, helping organizations streamline inventory creation and organize order fulfillment operations. These systems help businesses optimize their inventories and improve supply chain efficiency. Advanced inventory management systems provide real-time inventory control and auditing functionalities.
The benefits of inventory management software
Manual inventory management programs, whatever your method, is inefficient and time consuming. These methods cannot handle complex tasks such as inventory auditing, inventory control, and real-time inventory tracking. Inefficient inventory management harms your business; excess inventory increases your total cost of warehousing, while inadequate stock leads to lost sales and negative customer experience.
Inventory management is a key factor that influences whether you make a sale or lose to a competitor, and inventory management software helps your business avoid such damage while overcoming related challenges.
Specific benefits include:
- Enhanced inventory tracking
- Lower incidents of inventory theft
- Improved supply chain visibility for your suppliers
- Improved financial performance
- Accurate accounting and financial reporting
Typical features of inventory management software
- Inventory auditing: Run periodic reviews of inventory records and alert management of any discrepancies or process lapses.
- Inventory control: Optimize inventory levels and reduce instances of overstocking and understocking.
- Product categorization: Monitor inventory based on product attributes such as weight, height, lot, batch, date, and serial number.
- Purchase order management: Create, review, and modify paperless purchase orders from suppliers.
- Reporting/analytics: Summarize and analyze inventory performance. Some advanced platforms offer real-time data capturing and data visualization tools.
- Search/filter: Search products based on features such as location, product type, serial number, and size.
Considerations when purchasing inventory management software
- Integration with accounting software: Inventory management systems work closely with accounting platforms. Inventory control and inventory auditing are important functions fueled by accounting solution integration. When buying inventory software, ask the vendor about third-party integrations and look for a solution that integrates with your current—or preferred—accounting software.
- Total cost of ownership: Different inventory management programs offer varied pricing models that make direct comparison a bit tough. Certain vendors may charge for product support, data storage, training, implementation, upgrades, and more. Before purchasing a solution, contact the vendor and calculate the total cost of ownership based on your business’ needs.
Relevant inventory management software trends
- Vendors add advanced data analytics for better inventory control: Data analytics technologies have grown by leaps and bounds in recent years. In response, inventory management systems vendors are including advanced data analytics modules in their products to offer data visualization , real-time data access , and multiple data connectors . Data analytics helps managers take corrective action in the event of performance deviation.
- Internet of things will get real: In the coming years, you’ll get something more from the internet of things (IoT) than just the hype you’ve seen so far. In fact, according to a Capterra’s technology trends report , 73% of small businesses are planning to use IoT within the next two years. The IoT is becoming a reality with the launch of products such as BlackBerry Radar —which has advanced tracking and sensor capabilities—and Smart trash receptacles , which share volume status (denoting how “full” the receptacles are) via Wi-Fi to optimize trash collectors routes.