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The automated inventory management system in the details: How to increase the company profitability and reduce manual labour to zero
How to series

The automated inventory management system in the details: How to increase the company profitability and reduce manual labour to zero

5 min read
David Field
David FieldCustomer Success Expert

Poor inventory management may be the reason of either surplus and overstocking or understocking and lost sales, resulting in huge business losses.

According to an Intel study, 5% of inventory inaccuracies are only because of manual processing, and retailers lose nearly $1 trillion due to inventory shortages.

Thus, inventory management issues can disrupt the entire supply chain. Choosing an automated inventory management system will enable your retail chain to increase profitability and workflow efficiency.

What is Automated Inventory Management?

Automated inventory management is an essential tool for small and medium businesses to take their workflow to the next level. The system allows retailers to manage their inventory online with minimal effort and error.

It not only helps your team to work more efficiently but also contributes to a better customer experience. Customers expect omnichannel transactions to have a seamless shopping experience. Automation will help meet these expectations and provide customers with what matters most – convenience.

The automated system includes many options. The most common are as follows:

The software solves the problems that arise with a manual approach.

That is why using an IMS system for inventory management makes it possible to increase the efficiency of the entire business performance.

The way automated inventory management operates and its role in retail

According to Linnworks’ "The Effortless Economy" study, 9/10 of customers prefer retailers that offer a convenient experience. 46% prioritize convenience over price when choosing a retailer, and 78% value convenience more after the pandemic. They expect to be able to order a product in the channel of their choice by selecting the best delivery option or pickup.

To meet these expectations and receive goods on time, retailers should keep track of what is sold on their channels and at what price. This is where automation comes in. An inventory management system helps e-commerce retailers meet these expectations.

For example, suppose one of your items runs out of stock and reaches a pre-set reorder point. In that case, your inventory management software automatically lets you know (or even reorders for you).

Inventory automation should also work in conjunction with other retail management tools, such as order management or point of sale (POS) software. If you want accurate online inventory management, you have to be aware of all sales across all channels.

Benefits of Automated Inventory Management

  1. Time saving.

With an automated system, all your inventory will be renewed automatically and accurately across all channels. Every time an item is sold, returned, or accepted, your automated engine logs the action and updates the system without manual instructions, leaving you time to focus on what really matters.

  1. Getting information online.

You will be able to track the amount of stock in your warehouse(s), inventory to be stocked for current orders, and inventory for your suppliers’ orders. Besides, with this high level of accuracy, you'll never again disappoint your customers with out-of-stock items or backorders.

  1. Multiple stores remote management.

Automation can bring along opportunities to grow and scale up. As the business grows, this same inventory system will help you manage multiple stores. Get store reports, set up stock transfers, manage franchisees, and more.

  1. Improved accuracy.

Manual entry often causes a human error. What's the solution? Completely eliminate the need for manual inventory data entry. When you automate your inventory management, the software will manage your data entry by adding, deleting, predicting, and replenishing the stock online.

  1. Improving the inventory management efficiency.

Instead of relying on managers or other employees for data manual entry, generating a new report, or placing an order, you can complete inventory assignments without being prompted. This will help your business to have everything you need at any given time.

How to choose the best inventory management system

When choosing the most effective IMS system, you should focus on its operability, affordability, and range of features and options.

The best inventory management software analyses sales data and inventory KPIs and then make recommendations for restocking and channel allocation.

With efficient restocking, your business can maximize sales opportunities, prevent overselling, and avoid marketplace penalties for being unable to fulfill orders due to inventory restrictions.

The Leafio Inventory Optimization tool is designed to manage the order throughout the entire life cycle. As a result of Leafio's operation, you get an automated calculation of the quantity required for the order, automated generation of orders, automated dispatch of orders, automated editing of dispatched orders based on the supplier’s feedback and control of order execution. You also get a transparent and structured dealing with orders workflow, with its advantages for both the line manager and the head. The management becomes less resource-intensive and more efficient – managers are released from routine tasks. Accurate demand calculation increases product availability, reduces surplus inventories and improves turnover.

Other essential features for you to choose an automated inventory management system:

Inventory transfer

To manage inventory across multiple locations, companies should be able to set up inventory transfers. Using this feature, you can send products from one location to another without losing inventory or changing cost reporting and analysis.

Automated reorder

Automated restocking is one of the most important features for seamless inventory management. With stock notifications, the sellers can rest assured, being aware they'll always have the right amount of stock.

Every seller can set their own levels for each product in their inventory. The POS finds the right time to place a reorder and automatically does so when inventory reaches this limit.

Order periods in a store

This is another step towards automation. Instead of setting individual reorder levels for each individual item, Store Orders automatically generate a single report for all items you have to order. The software then sends order requests to each relevant supplier. Here again, all this is done without pressing a single button. 

E-commerce integration

Automated inventory tracking is without a doubt critical to omnichannel sales. With more companies going online, all sales and behavior have to be tracked both in brick-and-mortar stores and web stores.

David Field
David FieldCustomer Success Expert



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