Companies that store products or parts can use inventory management software to help ensure that they remain profitable and that their operations continue to run smoothly.
Inventory management tasks like managing inventory levels and tracking product locations are essential for organizations of all sizes that sell products. Carrying out inventory management helps streamline operations and activities within warehouses, inventory rooms and distribution centers.
Here's more about inventory management software and the advantages of using it.
What is inventory management software?
An inventory management system is software that stores information about a company's products or parts, which are potentially located at multiple facilities. These items can range from equipment parts and computer hardware to ingredients for manufacturing, such as liquids or raw material.
The software stores the details of each product, such as its quantity, location in the warehouse and expiration date, if applicable.
Inventory management systems also enable users to carry out the following processes:
- Tracking inventory levels.
- Tracking product movement throughout the warehouse.
- Determining whether all needed items are available for production.
5 benefits of using inventory management software
Some of the advantages of using inventory management software include the following:
1. Improves demand planning
Inventory management software is particularly helpful for manufacturers that require multiple components to produce finished goods. To start a production run, employees must confirm inventory levels to ensure that all needed parts are available, and lack of inventory results in production delays.
Inventory management software makes it easier to carry out demand planning so users can forecast the number of components that the company will need in the future and purchase them, ensuring the parts will be available when needed.
2. Improves quality control
Inventory management software makes it easier for a company's quality control department and compliance department to carry out their tasks.
The system stores data like product movements, which can help employees find certain components or finished products in a recall situation. The information will help employees find the damaged items before they are shipped.
3. Helps reduce costs
Inventory management software can help save companies money in various ways.
The system's reporting and analytics capabilities, including on-hand inventory reports, trends over time and cycle counts, can all help users identify areas in which the company can reduce costs. For example, companies that store perishable products like food can use inventory management software to analyze the amount of food that expired because employees did not store it properly.
In addition, inventory management software provides insight into available capacity for distribution centers. Companies without this capability must hire additional employees to physically walk through the warehouses and document any free storage.
4. Increases efficiency
Inventory management software can help companies make operations more efficient. For example, many modern inventory systems are available for use on mobile devices, enabling users to scan products on their phones while on the warehouse floor. This eliminates the need for paper forms.
In addition, inventory management software helps users locate products quickly in a warehouse, avoiding delays during the shipping process. It also enables the sales team to check inventory levels on specific items without having to contact warehouse staff about product availability, saving employees time.
5. Improves customer service
Customer service suffers if a customer places an order and an employee must then inform them that the product is not available.
Inventory management software gives users real-time visibility into inventory levels, ensuring product information on the company website is up to date.
Reda Chouffani runs the consulting practice he co-founded, Biz Technology Solutions, Inc. He is a healthcare informatics consultant, cloud expert and a business intelligence architect who helps enterprise clients make the best use of technology to streamline operations and improve productivity.