Accurate inventory and up-to-date sales tracking are both vital to operating and succeeding with your business. Choosing the right software is one of the most important business decisions you will make.
When broken down, inventory management software is a computer-based system for tracking inventory levels, orders, sales and deliveries. It can also be used in the manufacturing industry to create a work order, bill of materials and other production related documents. Companies use the system to avoid product overstock and outages. Companies also use inventory management software for organizing inventory data that was usually stored on hard-copy form or spreadsheets in the past.
Inventory management software includes several key components that all work together to create a combined inventory for several systems. These components include:
When a product reaches a certain predetermined level, the company’s inventory management system can be programmed to prompt managers to reorder that product. This greatly helps companies avoid running out of products or tying up too much capital in inventory.
When a product is in a warehouse, enroute to a client or in a store, it can be tracked with its barcode or other tracking device. Inventory management currently utilizes barcode, RFID or wireless tracking technology.
Companies that are primarily service-orientated rather than product-oriented can use inventory management software to track the cost of the materials they use to provide the services they offer. This allows them to add prices to their services that reflect the total cost of performing them.
Data on products and orders is usually inputted into inventory management software by using barcodes. A barcode reader is used to read the barcodes and look up information on the products they are attached to. RFID tags and wireless methods of product identification are also growing in popularity.
There are several advantages to using inventory management software in a business.
A company’s inventory, in most cases, represents one of their largest investments. Inventory management software helps companies cut expenses by minimizing the amount of unnecessary parts and products in their operation. It also helps companies avoid lost sales by having enough stock on hand to meet demand.
Inventory management software allows many inventory-related tasks to be automated. For example, software can automatically collect data, conduct calculations and create records. This not only results in time savings and cost savings, but also increases the efficiency of the business.
Inventory management software can help distributors, wholesalers, manufacturers and retailers optimize the use of their warehouses. For instance, if specific products are usually sold together or are more popular than others, those products can be grouped together or placed near the delivery area to speed up the process of selection and shipping.
Another advantage to inventory management software is up-to-date, real-time data on inventory conditions and levels. Company executives can access the software through a mobile device, laptop or PC to check the current level of inventory, which is automatically updated and allows businesses to make informed decisions.
With the help of restricted user rights, company managers can allow several employees to assist in inventory management. They can grant employees just enough information access to receive products, make orders, transfer products and do other tasks without compromising company security. This can speed up the inventory management process and save the managers’ time.
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Inventory management software makes it possible to track where products are stocked, which suppliers they come from and the length of time they are stocked. By analysing this data, companies can control inventory levels and maximize the use of warehouse space. This also allows businesses to be more prepared for the supply and demand of the market, especially during special circumstances such as a peak season on a particular month.
Inventory management software is not necessarily simple to learn. A company’s management team must dedicate a certain amount of time to learning the new system, including both software and hardware, in order to use it effectively and efficiently. Despite the apparent complexity of inventory management software, it offers a large degree of stability to companies. For example if an IT employee in charge of the system leaves the company, a replacement can be comparatively inexpensive to train compared to if the company used several different programs to store inventory data.
This is proof that the advantages of having inventory management software in place far outweigh the complexity that may be involved in learning to use it and training your employees to use it.