Inventory management software makes inventory handling super easy. Inventory handling programs track the overall movement of stocks in your business. An inventory management program is helpful to list products online.
For retailers in multi-channel, e-commerce, omnichannel, and brick-and-mortar, an inventory management program is the key to success. With new storerooms opening every day, the amount of workers for management also grows.
However, such growth comes at a cost to the business. A good inventory management application can save time and money.
The Definition of Inventory Management
Inventory management is a process in the supply chain where warehouse inventory checking takes place. The inventory management software can show a clear picture of the stock at any given time.
The program suggests getting new stocks to maintain proper inventory levels. Inventory management using the software could boost the overall movement when using barcodes to scan stocks.
Inventory management software focuses on the supply chain route. It can also merge itself with other applications as follows:
- Point of sale channels at retail stores
- Online order management channels
- The shipping of orders from the warehouse
The Working Process for Inventory Management Software
Followings are the key processes that make a successful inventory management program:
- Ordering at Economical Quantity
Economic Order Quantity or ECQ is the formula for managing proper inventory levels. It helps in deciding the ideal quantity of purchase through the following variables:
- The total cost of product manufacturing
- The rate of demand for that product in the market
- Other supply chain factors
- The Minimum Quantity for Ordering
Minimum order quantity or MOQ is for the supplier side. It is the smallest quantity at which retailers can sell items to the buyer. Usually, MOQ is less for costly items.
- Just-in-time (JIT) Management of Inventory
Inventory management software can reduce stock management costs through the JIT process. Raw materials sitting idle in the warehouse are costly for businesses.
An automated program can sync production lines with inventory appropriately. New stock will arrive just in time when the production line needs raw material.
- Backup Stock Inventory
Sales and production line forecasting may not be correct all the time. Also, certain products may attract huge demand without any advance signals.
An efficient inventory management software analyzes sales, production, and market data. Then it suggests backup stock keeping of raw materials.
- Design the process for Inventory Clearance
An inventory management program also examines the product type and shelf life. Then it suggests an optimal schedule for product clearance.
First in and first out is the method of selling old products first. It is the way to keep stocks fresh in the warehouse.
Last in first out is the method of selling the newest product first. Commodities that have lesser shelf life need such a plan.
Wrapping Up
Businesses are sensitive to changes in product demand. The demand for a commodity in the market depends on many data points. An inventory management software is capable of analyzing all of these data. Therefore, such an application can suggest a proper schedule for production and stock keeping. Ultimately, business revenue increases through savings and an increase in sale orders.
