Inventory Management System
Most people think of the retail industry when they think of inventory management. But such systems are also widely used in industries from manufacturing to education and government. Their value can’t be stressed enough. It would be impossible for any organisation to operate effectively without detailed records of its stocked goods.
Let’s start with an overview of what inventory management is and common challenges associated with it. We’ll also look at how inventory management systems address these challenges and the benefits they can bring to your business.
What is Inventory Management?
Inventory management is the systematic approach of managing inventory items such as raw materials and finished goods. It’s the complex system behind your last purchase which followed the product from the manufacturer all the way to the shelf and into your hands.
Inventory management is an important part of any business, even those that provide managed IT support. It enables organisations to keep tabs on their current stock including which items move quickly and which ones sell at a slower pace. Each piece of information allows for better reporting and forecasting capabilities. Business leaders must have a firm understanding of what inventory management entails to address common challenges.
Inventory Management Challenges
Spreadsheets can be used to track inventory. It’s a rather crude way of keeping tabs on products sold and one that many small businesses rely on. But relying on Excel or other manual tools becomes incredibly inefficient as an organisation and its product line grows. It cuts into operating costs. If the spreadsheet isn’t immediately updated, it can result in inaccurate records which can lead to wasted time tracking down certain items.
Supply and demand cycles also aren’t constant. A product can quickly sell out during certain months while others can remain sitting for long periods. Both can potentially cost your business money. If a customer sees that a product isn’t available, he or she may turn to a competing business. Excessive inventory is also a liability as it can lead to cash-flow problems. Cash that is tied up in unsold products is money that could’ve gone into restocking more popular items or investing in improving operations. Inventory management then isn’t just about keeping track of products but also knowing when to replenish stocks.
Inventory Management Systems
Many companies turn to inventory management systems to address common challenges and bring more insight to the business. These systems utilise a combination of hardware and software to monitor stocked goods. Hardware tools include barcode scanners to track inventory and software applications provide a central database that keeps track of the quantity of goods and other key information.
If your business buys and sells any kind of goods, inventory management systems provide a sweeping overview of your operations beyond simply performing inventory counts. More sophisticated systems like the ones available from Scope Link Barcode Technologies offer more advanced functionality. These include receiving notifications of low inventory and generating sales forecast reports. So you’ll be able to better streamline product sales, avoid tying up any funds, and ensure the right items are always in stock for your customers.