Inventory Management Software

Inventory control software can automate, track and optimise every aspect of orders, sales, deliveries and stock control. For retailers, distributors and manufactures, the pressures to meet changing consumer demand, means being able to deliver products or parts to the point of sale. Inventory software can help businesses optimise stock levels, accurately track shipments, reduce product write-offs, and avoid missing out on unexpected large orders from key customers.

An automated stock software package adds greater value to businesses trying to grapple with a wide range of products, large number of suppliers, and disparate geographic operations. To implement such software, a mobile bar code handheld scanner is used to track product or parts through a supply chain. Barcodes can help to pinpoint exactly where inventory is located in a warehouse or off-site. The bar code can show items by serial number, date code, palette number or lot number. All this data simplifies the management of key suppliers.

Unfortunately, most business owners perceive that using inventory management software is either too expensive, too complicated, or simply not relevant to their operation. It is true that stock software systems, were originally designed around the needs of large supermarkets or manufacturing operations. These days most software packages are marketed to cater for small retailers or distributors. Retail operations usually have a larger selection of products or spare parts, in their manufacturing or distribution supply chain.

Most smaller companies rely on excel spreadsheets, or modules contained within their existing accounting software, to track inventory levels. The barrier to using new software, is usually the 'fear of the unknown', as well as the desire to change the way a business operates. Yet semi manual record keeping using spreadsheets' is not always an accurate way to track inventory through the supply chain. For example, many processes would not be possible without some degree of automated tracking. For instance, keeping tabs on goods movement, its physical location in a warehouse, whether it's been picked for shipping, sold already, pre-order date, sell by date if perishable.

It is extremely difficult to quantify the business benefits, relative to the investment in new stock-based software. This is because every company's needs are different. It is unlikely small firms without any inventory software system, will be able to accurately calculate existing stock control costs. Therefore, it is difficult to pick a starting point, to justify investment in a new software program. However, the business benefits of using an automated inventory software, (relative to manual stock management checks), can be categorised as follows:-

• Reduced Stock Levels - the software will make it easier to calculate the proper stock levels, relative to seasonal or fluctuating demand. This is essential if working capital is not to be tied up unnecessarily in unsold stock, sitting idly in a warehouse. Secondly, as less manual intervention is required to follow all parts and products through a supply chain.

• Improved Order Management - when stocks run short, inventory software can alert a manager that a product or parts need re-ordering. This in turn avoids turning new business sales away, simply because there are no stocks available. Knowing the product is in stock, avoids the unnecessary expense of speed shipping a rush order to an important client. Conversely, when overall consumer demand is weak, a manager can do a quick check to determine what stock is left over to sell. He can be then proactively delay or cancel regular orders of raw material supplies or parts.

• Improved Service Levels - managing a complex regional or even national distribution process, involving moving spare parts around between depots, can only be achieved using an automated inventory software system. Most customers hate waiting for their defective products to be fixed. So organisations that can improve the level of service they provide to their end users. This is likely to improve their business reputation significantly. By making sure the right spare parts, are delivered to the right place at the right time, technicians or engineers can get defective products fixed faster.

• Efficient Warehousing - inventory software can help managers keep their warehouses well-organised (as products can be organised according to popularity, sell by date deadlines or any other factor deemed appropriate). This in turn reduces inventory write-offs due to inefficiencies. It also minimises unnecessary reordering, due to the fact staff can more easily find products or parts they are looking for. In addition, the drudgery of doing the monthly stocktaking can be considerably speeded up, by the use of bar-coding scanner devices, linked into your new software system. It will also allow you to more accurately price your stock. This is turn helps end of year financial reporting in your balance sheet, as well as provided critical information if you are planning to sell your business.

• Improved Employee Productivity - if your employees have access to the inventory software, they will be in a position to update customer requests for delivery dates. Without this information at their fingertips, your staff may need to waste valuable time hunting around a warehouse or store room, because they do not know whether or not the product is in stock.

Good luck implementing an inventory management software system in your business!