The key to running a successful retail business is to have good visibility into the inventory counts and locations. One of the mistakes companies make is not using an inventory management system to coordinate operations and make informed choices so as not to lose customers to poor management.
If any of the following issues are slowing you down, it’s very probable that you are struggling with ineffective inventory management.
- Inaccurate stock data
- Inconsistent tracking
- Limited visibility into operations
- Manual documentation and data entry
- Inappropriate Software or Unscalable apps
Adding to the concern, these problems increase as your inventory grows.
But things happen very differently when you have a smart inventory system.
In this blog, we go over how to eliminate inefficiencies and manage inventory meticulously with intelligent automation.
What is a Smart Inventory Management System?
Smart Inventory Management is an approach aimed at improving the operational efficiency of the inventory process by controlling inventory levels, orders, and deliveries using data and software.
It is an interface that allows users to fully control the operations by tracking sales, purchases, shipments, product history, and specifications.
Cloud-based smart inventory systems maintain a centralized database and let users log in via the internet.
The system is designed to minimize the manual input required for managing inventory-related transactions and data.
Consequences of Poor Inventory Management
The consequences of poor inventory management can wreck your business in many ways. Learn about the potential risks of poor inventory management here.
The costs associated with maintaining inventory in the warehouse and the gradual depreciation of the goods are detriments of inadequate inventory management, ultimately adding to a lot of needless expenses.
2. Inventory Tracking Issues
It will be tough to manually keep track of details such as color, size, batch, and price for the numerous different products that you sell. Inaccurate and outdated information or errors in the data affects the tracking of the inventory. Also, not knowing how and where the product moves leads to obsolete inventory and unnecessary expenditure.
Furthermore, improper tracking will not warn you about the fluctuations in the product demand so that you can appropriately balance it with the stock levels. Consequently, you will fall short of meeting customer demands.
3. Inventory Imbalance
Poor inventory management leads to situations where you may be holding too many or too few stocks. In the former situation, you run the risk of the items depreciating (particularly perishable goods), while in the latter, you fail to meet customer demand.
With feeble inventory tracking procedures and systems, businesses cannot identify the product that is most in demand or when stock replenishment is due.
Tracking real-time data and reporting can help overcome these challenges by letting you gain the right insights.
Handling the data entry and paperwork of stock data manually is time-consuming, at the same time making it vulnerable to data errors and security issues. Also, it would require more time from your staff to locate the products and keep track of them.
5. Poor Customer Service
Improper management of the inventory causes delays in shipments, overselling of out-of-stock products, or even mixed-up orders. And, this certainly wasn’t how you wanted to run your retail business.
6. Decreased Employee Productivity
The routine and repetitive tasks can weary the employees and take all the fun out of their work. Bringing in smart management and automation will have them use their skills on crucial other tasks, improving productivity at the workplace.
7. Increased Out-of-Stock Situation
Reiterating the 3rd point, inventory imbalance causes increased instances of out-of-stock since businesses will be sluggish in identifying when it’s time to restock the items. With ambiguity over stock, you will be selling products that are out of stock, which will have you issue a refund or delay the shipment.
How a Smart Inventory Management System is Helping Businesses?
Having a smart inventory management system is really crucial because of the following reasons.
- Forecast Demand
Not knowing how much inventory you have means losing your customers and having too much inventory means increased expenses. With an intelligent inventory management system, you can cut down on expenses. Reporting and analytics help predict future inventory needs and let you act on an emerging opportunity in no time.
- Avoid Shipment Delays
Helps to prevent shipment delays since efficient inventory tracking keeps items in stock when they are needed, allowing you to cut lead times and delight the customer.
- Minimize Costs
Controlling the cash flow through maintaining optimum inventory levels helps businesses to free up cash for meeting other obligations. Reports on the inventory data will tell you the unsold items for a year, for instance, so that you can decide on how to get rid of the obsolete stock.
The inventory management solution helps you minimize your expenses by helping you save on storage costs, product wastage, and better accounting.
- Accurate Data
Inconsistency in data entry leads to instances of missing, erroneous or duplicate data which eventually bogs down the efficiency of your operations. The cloud-based smart inventory management systems keep data in a centralized database, allowing changes to the stocks to be reflected in real-time across all channels. An automated system that updates the database itself is faster and more accurate than the method of manual data entry.
- Efficient Replenishment
Analytics-based inventory management helps optimize stock levels and maximize profit as well as avoid situations where items are unavailable when they are needed.
- Minimizes Manual Intervention
You can set reminders to alert you when the stocks fall below a certain threshold thereby doing away with the need to manually monitor the inventory levels.
- Promotes Collaboration
The inventory management system allows for the data to sync across all channels, modules, or applications you employ, enabling your teams to work together, and keeping everyone on the same page.
Features of a Smart Inventory Management System
Smart Inventory management systems come with distinctive features and here are some that will serve as a checklist when looking out for one yourself.
- Sync orders on your e-store to the inventory management system with easy integration.
- Account for every item by adding it to the warehouse inventory.
- Connect inventory entries with work orders.
- Accurately track inventory data and gain real-time information about the products in stock.
- Maintain the right inventory balance avoiding stock shortage and overstocking.
- Get notified when stocks approach the minimum order level.
- Real-time data updates give greater visibility and help forecast product demand.
- Classify the stocks based on parameters such as type, batch, or serial number.
- Get assured of data backup and security with cloud-based inventory management software.
- Mobile-friendly app versions give access to the inventory data, orders, and shipment anytime and anywhere.
- Track return orders and cancellations and update them in the database.
- Get an instant record of the items in stock, items running low, or other crucial details.
- Also, manage inventory across multiple locations just how your business demands.
How to Identify Quality Inventory Management Software?
Choosing a quality inventory management software involves consideration of a few essential factors to better prepare yourself before choosing one. The below-mentioned points will help you in this.
The software must be able to meet your unique needs. Customizable software can serve your specific planning, purchase, and inventory control requirements. A quality inventory management software must allow customization of the layout, dashboard features, fields, workflows, and other elements to fit your operations perfectly. It should also give you the option to remove features that you don’t intend to utilize.
This refers to how effective the implementation of the software will turn out for your business. It probably isn’t worth a shot if comprehending the software’s ins and outs seem tricky. Therefore, it is not advised to choose a system whose usability presents a barrier when you want to simplify your inventory management process. On the other hand, easier navigation and an appealing interface can draw your users to the system.
- Integrations with other applications
It is certain that you will be using many applications to run your business. Integrating the inventory management software with other systems is a factor that you cannot overlook, essentially because inventory management is tied to other areas of your business.
When the different systems are smoothly interconnected, it eliminates any gaps or delays that may occur otherwise.
The system that you have decided to choose must be flexible in that it should be accessible on mobile devices, accommodate the required number of users, and gives you the choice to add or remove features.
Scaling is one of the primary business objectives. Therefore, a system that perfectly meets your needs at present and one that will scale to accommodate your growing business is definitely what you should look out for.
- Security and Data Back-up
Ensure the inventory management system that you plan to invest in adheres to the standard data privacy and security norms such as GDPR and HIPAA. Check out the data backup procedures in place to ensure that you will be able to retrieve all your data in the event of a disaster.
Smart Inventory Management with Kapture
Simplify inventory management operations with Kapture’s inventory management solutions to have a balanced inventory fulfillment. Cutting-edge inventory management solutions such as Kapture’s assure that you carry the right amount of inventory to maximize profits. Manage all the warehouse operations across multiple sites from a single dashboard.
Utilize our robust reporting features to identify inventory trends so that you can make informed decisions pertaining to stock maintenance.
Do not wait until you can no longer manage your inventory with manual tasks and bad data.
Invest in quality inventory management software and witness better profit margins, optimum stock levels, saved times, and streamlined operations. Partner with us to implement technologically innovative ideas for inventory management to maintain the highest level of service.
About the Author
|Seema C Mohan|
|Seema C Mohan is passionate about all things XaaS and loves to write value-added content. She has been in Business Process Management in the past and has published technology articles in journals.|