5 benefits of Inventory Management
Last week, We posted a question on social media “At present, What do you think is the biggest Omnichannel Retailing challenge?”
Inventory management is without doubt one of the most challenging aspects when it comes to retail and eCommerce. The sheer intensity of keeping up with the stocks and noting inventory across channels and
Let’s start with the basic question: What is Inventory Management?
Inventory management refers to the planning and process of buying, storing and selling of logistics or stock regardless of whether its raw materials, parts of products or final goods. It’s basically what happens behind the scenes of any successful omnichannel company. It consists of balancing supply and demand within and managing the supply chain in such a way that the company always have enough to stay in the realm of excess profit.
The second question we need to tackle before understanding its benefits is why It’s important?
An efficient inventory management software is important to enable a company to procure the correct amount of stock without holding or wasting excess stock.
When carried out efficiently, Inventory management saves companies both time and money, valuable resources in the current generation of ecommerce.
Finally, it’s important to understand the primary and secondary purpose of inventory management software. The primary purpose is to make sure that the logistics supply meets demand without overstocking the inventory. The Secondary purpose is to ensure the organization of stock through detailed planning and records or data management which would be a hassle manually.
The 5 benefits of Inventory management software are as follows:
- Better product visibility: At times, product refunds or recalls are inevitable and expected. Having an automated system for inventory management eases this process manifold by eliminating the effort and time it could take to track down affected or damaged products. An automated product tracking functionality is a boon in disguise during such situations by saving immeasurable hours and countless headaches. Without full product traceability, resolving a problem with the supplier can get complicated and the supply chain may get confusing when handled manually which is not ideal when trying to run an Omnichannel business.
- Organized warehouse: An organized warehouse is also efficient in saving the company’s time and money through fast communication procedures and high productivity which eventually turns out to be beneficial for the company. A proper Inventory management system tracks inventory and supply chain movement with meticulous attention and high accuracy. This can help speed up order fulfillment and keep customers happy.
- Reducing Inaccuracies: Inventory management consists of a wide distribution of internal management processes. Doing calculations manually can be daunting and lead to inaccuracies. An automated inventory management system solves this issue and eliminates data duplication completely. Once an inventory management software is adopted, it will automate data recording, management and tracking processes which often leaves no room for errors.
- Time saving: An inventory management system with divides like mobile phones and barcode scanners, along with integrated data storage and analysis can lead to a speedy supply chain with accurate record keeping using specialized software. This eliminates the tedious manual Work which may be time consuming. Instead, an automated inventory management system saves time by automating tasks and allowing employees to focus on other priorities in the company. Keeping track of the procut in real time also saves the time it takes to recount stock and re-record its accuracy.
- Cost saving: One of the biggest benefits of an automated inventory management system is that along with saving time, it also saves labour costs and company funds. Being one of the largest assets of a company, inventory management is important due to the expensive purchase and cost of storing it. The company stays in the red light until the products are sold and profit is made. Only then can the company turn their green lights on. If the company doesn’t sell all its stock, it has to eat the costs of the stock along with the cost of warehouse management with all the storage requirements, rents and handling costs; a complete waste or loss. Ordering too much can lead to a major loss for the company. This can be prevented through an efficient inventory management system which constantly keeps check of inventory with minor to almost zero errors in automation and inventory records. When you streamline the inventory management, you eliminate both stock expenses associated with human mistake and also earn profit by further savings costs. Deadstock and overstock situations are avoided due to constant tracking and hence prevent a revenue loss or overspending company funds. Inventory management lets a company avoid this risk by ordering just the right amount to meet demand – no more, no less!
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