Accurate inventory management eliminates many errors in tracking items and forecasting demand and sales. Otherwise, you risk making unnecessary purchases, running out of stock, and disrupting customer delivery times. The presence of errors in inventory management is very often due to the manual tracking of the latter. Only by optimizing day-to-day processes with an efficient automated stock management system will you significantly reduce supply chain errors.
By implementing the market’s best inventory management software, you get the opportunity to eliminate most mistakes that lead to lost profits and customer disappointment.
Inventory management problems your company might face
New challenges and the globalization of the economy require modern business leaders to make competent and timely decisions on stocks and supplies. Inventory management is a rather complex system and, due to a lack of expertise, it is often performed inappropriately. Any changes to the system can significantly affect the company’s profitability. Therefore, it is crucial to be ready for this. Knowing, understanding, and predicting potential inventory problems will help you build and grow a successful business.
1. An incomplete picture of your inventory
It is tough to control your inventory without clarity on the supply chain. If you want to avoid major problems, be sure to track your inventory status in real time. It is impossible to satisfy the customer by constantly disrupting orders due to the absence of stock. In this case, you run the risk of incurring severe losses.
Carefully track the number of your orders and the timing of their arrival. Constant monitoring of goods sent to warehouse shelves and safe stocks will help you strike the right balance in your customer relationships. However, it is not easy to maintain complete visibility of your inventory at all times, provided mainly through manual methods. The key solution to this issue, for a modern enterprise, is only a complete transition to an automated inventory management system.
2. Operational inefficiency
Many enterprises have a considerable number of procedures developed at the start, and today can have a very negative impact on the effectiveness of inventory management. Most of these procedures resulted from important temporary decisions, but now they need to be revised and, if possible, adapted to current conditions or replaced. As a result, today, the most successful companies worldwide pay a lot of attention to timely strategic planning.
3. Customer demand
A company’s flexibility plays a critical role in ordering and delivery in customer relationships. Your awareness of seasonal or promotional fluctuations in demand will undoubtedly reassure and meet your customers’ expectations. Your inventory turnover directly depends on the consumer and on your level of management.
4. Obsolete stock
Obsolete or dead stocks have a significant impact on a company’s bottom line. You have to organize the movement, storage and also spend valuable time on goods whose life cycle is over. To avoid such situations, try to constantly track your sales and customer demand over a certain period. The higher the forecasting accuracy, the higher the company’s profits.
5. Physical counts
The efficiency of inventory management directly depends on the cyclical nature of the inventory balances in warehouses. If you do them once a year, don’t be surprised at poor results. Therefore, try to balance the cyclicality of your checks so that you have enough time to make timely decisions about sales and purchasing.
Reduce the impact of human error by replacing routine manual work with an automatic one. A great example is barcode scanning and further tracking of goods using an automated inventory control system.
And of course, the competence of your employees can both increase profits and lower them. Sometimes, poorly trained employees make seemingly minor mistakes, but you will have to count the losses over time. So do not spare time and money for training.
6. Increasing competition
It is common knowledge that ever-increasing competition can put a heavy strain on your supply chains. You are not alone in buying and selling. The importance of supplier relationships cannot be underestimated. However, market conditions are now such that the cost of supply is no longer the main deciding factor for your success. Build your relationships with suppliers so that your customer always receives their product on time. Competition is precisely the indicator that shows how you can interact with the client.
What is an automated inventory management system?
An inventory management system is a set of technologies, processes, and procedures for monitoring and servicing goods in warehouses. Such systems allow retailers to successfully control and organize their supplies to consumers, regardless of product type.
How can a custom inventory management system help you?
With inventory management software, it’s possible to complete the entire inventory process from receipt to order fulfillment. The automated inventory tracking system continuously monitors customers, suppliers, purchase orders, shipments, and other data to see a clear picture of the items being sold and their quantities. Detailed reports and system analytics present the assessment of the company’s productivity and reserves.
Automation in inventory management takes an enterprise to an entirely new level in the fight against the competition, as it becomes possible to predict future market trends more accurately. In such conditions, it is much easier to make far-reaching plans based on reliable information. Adjust your shipments and deliveries, reduce surplus service costs, and cover stock shortages by predicting your supply and demand using the system.
What are the advantages of an automated inventory management system?
Inventory automation can bring both immediate and long-term benefits. It will increase company efficiency, order accuracy, improve your awareness of customer needs, make planning promotions easier, and more. Absolutely everyone benefits from implementing the system, from the general manager of the company to ordinary employees working in this chain. See below for more details on the benefits.
1. It saves time
Right from the start of using the automated inventory control system, you will experience significant time savings. If your business has a lot of products, manual counting is incredibly time-consuming. As a rule, around thirty stock-keeping units (SKUs) are already quite challenging to track without the appropriate software.
2. Automation brings more accuracy
One of the main tasks of such systems is to significantly reduce the occurrence of various errors. By integrating it into all company processes, you significantly reduce the influence of the human factor. As a result, minor errors and clerical inaccuracies are kept to a minimum.
3. Inventory management improves efficiency
Improve the efficiency of the company. Inventory tasks can now be performed without prompting. Managers and other company employees are no longer forced to compile new reports and place orders manually. This helps you have complete control and scale your business successfully.
4. You get insight in real time
What could be better than getting reliable information in real time? Especially if you need to make a vital decision. Your data is always up to date and accurate. You can control stocks, check reports, accounting, and more anytime from anywhere in the world.
5. You can run multiple stores remotely
Small businesses are booming thanks to the use of automated inventory management. Manage multiple locations for your business. Getting reports, setting up inventory transfers, managing franchisees, and more is now more accessible than ever.
Key features of automated inventory management
All the features presented below are essential for every company to expand the product line and reach. These features are also especially needed if you plan to scale your business across multiple locations.
Feature 1. Automated reordering
Automated reordering is one of the most important functions to ensure adequate inventory management. You will always have the right amount of inventory for your customers, thanks to timely notifications, customizable face value levels, and supplier relationships management. All you have to do is set your own levels for each stock item, and the points of sale will determine the appropriate reorder times. All this will be done automatically after reaching the set threshold.
Feature 2. Stock transfers
This feature is all about managing stocks in several places of the company at once. However, you can customize the stock transfer. Items are shipped between locations and are not lost on tracking. No changes to reports or cost analyzes are required.
Feature 3. E-commerce integrations
An automated inventory management system efficiently assists the establishment of multi-channel sales. In addition, a vast number of companies are still transitioning online, which implies the need to track sales and customer behavior in online stores as well.
Feature 4. Advanced multi-store reporting
This is an automatic reporting function in inventory management. Due to real-time inventory data updates, reports are updated accordingly. Managers can generate individual reports anywhere and anytime. This gives you all the information you need to make better decisions.
Feature 5. Store order cycles
This feature allows you to create a single report automatically for all items that are subject to an order. This way, you move away from defining individual reorder levels. The software then sends order requests to each supplier.
Feature 6. Dispatch notifications
Dispatch notifications is an automatic notification function when placing orders inside or outside. As soon as the action is taken, the addressees will receive the message. At the same time, there is absolutely no need to constantly request or monitor information.
Guaranteed software project success with a free 30-minute strategy session!
Unfortunately, the owners of many companies are not always serious about investing in effective software solutions. However, when faced with a shortage, loss and damage of goods and, as a result, the loss of a customer, they often come to an understanding of the need for innovation. Inventory management systems help companies of all sizes automate the underlying processes and improve operational efficiency across the board.
Contact DICEUS to implement a custom inventory management system that will fit your particular business specifics and nuances.