What is an Inventory Management System?
An Inventory Management System is an integrated system to collect, store, manage, and interpret data collected from multiple sources from a range of business processes.
The goal of the inventory management system is to accurately manage stock along the entire supply chain, complete order processing, and monitor inventory levels, all from one convenient location.
Successful inventory management puts products on shelves at the time when they are needed most, or when demand dictates they be available. It reduces waste and removes the risk of holding excess stock and carrying obsolete products.
Effective inventory management isn’t just about knowing what’s happening in the market now. It needs to be able to look into the future to predict fluctuations in demand, and avoid stock shortages. Equally as important, it prevents a company from holding excess stock that will take up valuable storage space while soaking up profit.
Benefits of Inventory Management System
From increasing efficiency by reducing errors, to cost savings through integrating different moving parts into one interface, the benefits of retail inventory management integration are many.
A great deal of business management focuses on finding new ways to improve profit margins by increasing efficiencies, reducing wastage, and eliminating mistakes. A retail Inventory management system can achieve all those things and more by reducing workload and expenses across all facets of inventory management.
Supply Chain Management
Many organizations outsource shipping providers and logistics to move inventory to customers and from suppliers. A retail Inventory management system can integrate with external shipping partners so all systems can share data and communicate with each other. Orders, stock, and shipping information are synchronized with all departments.
Improves Data Collection Accuracy
Because there is a single location for all updates on customers, stock, orders, and deliveries, the retail Inventory management system removes many processes where human error could influence the integrity of the data.
Create Opportunities for Business Expansion
Inventory management can significantly reduce the time needed for accurate record-keeping by streamlining and automating many administration tasks. Freeing up time provides more opportunities for developing strategies to grow the business.
Planning Replenishment Orders
Inventory management makes planning replenishment orders more efficient. Accurate inventory quantities are critical to a system that will place an order when the buy signal is received. You can be confident that you won’t be ordering too much or too little, and can also set up the system to send you alerts when stock levels reach a certain amount.
You can fine-tune the system by category further, by setting it to issue a buy order only when there is sufficient demand for a product, or order items when it detects that the supplier has reduced prices. The goal of inventory management is to maintain stock levels through a reduced number of transactions, which has the advantage of also increasing accuracy.
Tracking Product Life Cycles
New products are introduced, mature into popularity, and then decline as more recent products take their place. The lifecycle for one product can be very different from another, with some products reaching the end of their lifecycle much sooner or later than others.
The data gathered from a retail inventory management solution can accurately track the demand. This critical information makes it much easier to forecast when to create larger orders, and when to reduce stock quantities.
Track Seasonal Demands
Many retail products are seasonal, and it can be challenging for an organization to manage hundreds or thousands of product lines and keep track of their seasonal demand fluctuations. A sophisticated retail inventory management solution tracks the data and can issue alerts when seasonal demands for products are imminent.
Discover New Trends
Market forces often translate into trends that can create massive upswings in demand for new products. Without the ability to predict recent trends, a business could miss out on securing a sufficient supply because they have noticed it too late. Trends can develop for any number of reasons, but an advanced retail ERP will be able to highlight the market shift so an organization can quickly prioritize securing more inventory.
Inventory Management Features of a Retail ERP
While retail ERPs have many features that add flexibility and efficiency to business management processes, specific features for inventory management include:
- Auto-integration of inventory with sales and purchase activities
- Auto-generation of purchase orders
- Stock alerts
- Manage multiple warehouses from one location
- Create stock requests and move stock between warehouses
- Manage stock while it’s in transit
- Picking and packing management features
- Distinguish between high-volume and low volume requests
- The ability for customers to track orders
- Multi-level bills of material for manufacturers
The above features aid business management by creating a much more detailed analysis of inventory levels. Retail ERPs remove the guesswork from the equation of making informed stocking decisions. When you can optimize your stock levels based on demand and cost and pick the frequency, you can improve your turnover rates.
Does Your Retail ERP Accurately Manage Your Inventory?
Automating inventory management as much as possible is critical to the growth of any small to medium enterprise. Organizations grow in complexity as they grow, which makes it more difficult to track inventory levels, maintain adequate supply to satisfy demand, and have an accurate account of the business.
A sophisticated retail ERP system like AltheaSuite can streamline many of the inventory management systems an organization needs to run efficiently. A single, all-in-one suite of integrated systems reduces errors, ensures the integrity of data, and helps maintain proper stock levels.
It’s easy and intuitive to use, so staff can quickly get up to speed. Don’t tie your profit up in stock you don’t need, visit today to discover how affordable it is to modernize the inventory management for your organization.