Retailers often find it impossible to meet orders because of incorrect calculation of stock levels. Tracking inventories from the manufacturer to the warehouse and outlet are often a fancy process.
The software helps you create the most effective business decisions and provides a bonus over competitors by meeting customers' expectations and controlling inventories.
This article will analyze the inventory management system well, how it works, and its critical features for retailers.
What is a stock management system?
In simple terms, it's a stock management software that enables you to manage stocks, manage and execute orders, monitor warehouses and optimize omnichannel sales. The inventory software reduces the time required for the company's employees and owners to review inventory levels and find the mandatory materials to boost performance.
Most inventory management systems help to automate and control some or all of the following areas:
- Optimization of the inventory balance (maintaining an optimal mix and volume of goods);
- Inventory cost management;
- Tracking stocks between storage locations using barcodes, serial numbers, or IoT oftenness Identifiers (RFIDs)
- Procurement of latest stocks;
- Warehouse management;
- The relationship between sales (in-store or online) and stock levels;
- prevention of defects and obsolescence of goods;
- Management of fixed assets (equipment, premises, vehicles);
- Demand forecasting and planning;
- accurate financial reporting.
To get the most straightforward tool for your business, decide which functional areas are essential to your business, and choose software with strong tools in these areas. Other business processes like sales, marketing, and service provision can even be improved through inventory management systems.
How does the stock management system work in the business?
Imagine shopping in your favorite store. As you rehearse the aisles, you see goods arranged by category, on shelves, with prices that change from day to day. Have you ever wondered what determines the placement of every item in these stores? Inventory management systems work by organizing all the assorted products owned by the organization and providing data on these products to customers and managers of the organization.
The stock management system is predicated on the merchandise. This product has attributes that outline it, including size, shape, value, price, quantity, etc. These attributes are accustomed to making informed decisions by product owners, customers, and even suppliers.
Some points, like identifiers and names, are static and help convey information about what a product is. Other attributes like cost, price, and quantity, are dynamic and are in constant flux for a thriving business. Inventory management software isn't only a method of efficiently organizing all this product data and the power to watch the dynamics of the company's reserves and analyze problem areas.
TOP 6 advantages of the inventory management system
- Inventory optimization
Optimization ensures a balance between guaranteed availability of products and maintaining minimum stocks, reducing human errors and storage costs. Reduced inventory and losses thanks to write-offs and sales. They have improved the financial performance of the corporate.
- Inventory tracking
Companies always have to know precisely what percentage of stocks each item has, so inventory management systems include inventory tracking functions. Inventory tracking uses Inventory Units (SKUs) to see what goods are in your warehouse, where they're located, and how many each you've got. The flexibility to trace inventories in real-time is essential for production teams, e-commerce companies, and multi-warehouse companies.
Most inventory management tools also issue warnings when the reserves of a specific SKU become low so that companies can order more. Additionally, supply chain managers can receive alerts about the status of orders for suppliers, SKU requiring additional attention of the manager, the dynamics of surpluses, and lost sales. These alerts can come from within the system yet via email, text messages, or notifications from mobile devices, looking at how your system is configured.
To facilitate tracking, inventory management systems also report on this level of inventories, the effectiveness of this procurement strategy, production cycle, and sales performance. The user understands the case with critical indicators, both within the operational trend and in long-term analytics, to grasp this situation within the network and make decisions.
Inventory forecasting ensures that the desired quantities are available in warehouses and outlets. Using your previous sales history, your inventory management software can predict what proportion per SKU you'll sell. That can make sure the availability of products and rid fluctuations in demand.
- Regulatory compliance
The inventory management system may facilitate your regulatory meeting requirements. When managing products that need increased security, like drugs, many companies use RFID tags to regulate these products. Your inventory management system can track RFID tags using IoT devices to confirm that controlled substances are under strict control and that nobody takes them out of storage without permission.
Based on the long-term experience of our customers from different retail directions, we were ready to analyze all the weaknesses of the business and form the foremost effective inventory management system - Leafio Inventory Optimization.
This cloud solution will facilitate you quickly and accurately identifying areas that need special attention. That can help fine-tune the ordering and delivery processes within the shortest possible time, which can cause the successful implementation of the company’s future strategy by reducing surpluses, increasing sales, and releasing cash.
The Leafio Inventory Optimization system also minimizes the impact of the human factor on order creation by relying exclusively on accurate data from complex algorithmic calculations to identify the real need for an individual SKU at each storage location.
This cloud solution will help move the business to a new level of inventory management.
And this, in turn:
- automation of business processes related to the supply chain at each stage;
- the release of human resources for better quality work with the assortment;
- the use of an analytical module for a complex understanding of business and development strategy.
Retail inventory has its terms and procedures. One of the important characteristics of retail inventory is that it`s closely integrated with the POS system, that is, with your cash register. The POS system provides a cash register (including a cash register and devices such as barcode readers) that browses the inventory database, identifies a particular item sold, and subtracts it from stock.
Depending on the product or commodity traded, individual items may be placed by bar codes or radio frequency identification tags (RFID). They`re assigned when goods are registered in the warehouse and then removed from the inventory when they are sold. Some POS systems even locate the goods, perhaps in a particular warehouse or even on the store floor. That is often found in clothes shops, goods, and electronic products. Barcoding, product location, and basket identification also feature many inventory systems.
It should be remembered that inventory software should always be interoperable or integrated with other internal business systems.
Find the best inventory management software for your business.
Choose a real-time system that's flexible, scalable, and transparent for users. Your reserves are not a fixed object but a living, breathing organism subject to constant fluctuations. It's essential that your software responds to these changes and informs each user in real-time, and allows you to expand the overall infrastructure (new warehouses, employees, and shops).