What are Different Types of Inventory Management Systems and Their Pros & Cons?
Departmental overstocks and overfilled warehouses is a challenge that growing businesses face today. One of the most common causes of overstocking is the lack of centralized systems. That’s why it’s important to use inventory management software that will sync and connect all your multi-locations, as well as brings automation in the system to save time and effort. In case you are looking for the best inventory system in India, then you should know about major types of inventory management systems. Let’s now discuss these major types of inventory management systems and their pros and cons.
1- Using Inventory spreadsheet
Many small businesses use spreadsheets like excel for keeping track of their inventory. This type of inventory management system can cause many errors & issues like human errors. This method is easily accessible but costly because you have to hire extra staff to manage your inventory on excel.
Pros :
- There is no need of installing or purchasing any new software/set-up. Spreadsheets are available free of cost on the cloud, which provides easy access.
- Available for Free
- Easy access. No installation required
Cons:
- Generally doesn’t fulfil your management needs
- High chances of human errors
- Not easy to scale
- Have very limited functions
2 – ERP Systems
Erp systems refer to an integrated approach to business planning & operations of inventory management. With the help of inventory management software businesses can efficiently manage logistics, finances, inventories & operations. ERP is a complete package of business management solutions. Marg ERP is an integrated inventory management software that empowers the business owners of small & medium businesses to manage their business operations in a productive & concise manner. Using the software the businesses can track every inch of their inventory. Therefore if you are looking for inventory software for small or medium businesses, so you could choose Marg ERP. Marg ERP has modern features in addition to the basic ones, so it will grow with your business.
Pros:
- It is a complete system to manage accounting, inventory, supply chain, HR, and more effortlessly.
- Provides greater data security
- The software is able to handle complex and large supply chains
- Helps in advanced location and warehouse management
- Affordable in cost
- Chances of human errors are none
- Can be customized as per the requirements
Cons:
- Can be a complex workflow
- Need setup & installation
- Need training time to learn the software
3 – Cloud-based Inventory Management System
Cloud-based inventory management system is different from spreadsheets. This system is hosted on the internet, in which all the data gets stored on third-party servers. The software is an ERP software or only inventory management software that allows the user to access the records from anywhere anytime.
This software reduces the chance of errors, delays, and other complications, which are commonly faced in the case of spreadsheets.
Pros:
- Shared across the company, this works as a single source of data which improves the visibility and truth of data across team members
- It is oriented to perfectly manage the supply chain functions
- Get real-time updates
- Minimum risk of errors
- Automated function & processes for repetitive tasks
Cons:
- You need a set-up
- Costs higher than spreadsheets but more effective
- May require maintenance fee or charges
The inventory management system can be considered the backbone of an organization.The method of organizing and maintaining inventories across the production chain is known as inventory management.
Businesses must effectively track inventory stocks in financial records as well as by regular audit to maintain effective order processing.
This gives the foundation for making inventory consumer choices and excellent product stocking levels to better satisfy inventory demand.A business must consider the characteristics of the product to improve it by maintaining the proper goods to strengthen the inventory management system.
Let’s look at how we improve inventory management:Delivery to CustomerAn excellent strategy to manage your sales volume and delivery speed are to use customer delivery.
Inventory management solutions and control require track of the inventory records of the quantity of stock on the store at any one time.Perform frequent cycle countsRegular cycle counts enable detection of minor inconsistencies as quickly as possible.The product should be labelledA well-organized and systematic warehouse sorts half the problems.
Labelling items makes it easier.Eliminate unwanted traffic to the warehouse.Access cards and standardized clothes help ensure that everybody managing inventories have been qualified and authorized.
Let’s be honest: all-night stock take blitzes and over-complicated excel spreadsheets are painful to use, unnecessarily labor-intensive, and incredibly outdated.Why torture yourself and your team when there are cheaper and faster options available online?
Luckily for you, cloud inventory management is actually more affordable than the old-school methods you’re currently using and that’s just one perk.Below we’ve compiled seven reliable ways, cloud inventory management is a smart investment for your business.
Instead of combing through piles of reports from different systems and departments or worse making “educated” guesses cloud software lets you view up to the minute data on inventory levels through easy-to-understand reports and dashboards.And instead of relying on special, manual stock-takes that require extra labor and could interrupt your operations (costly for growing businesses and large, multi-location companies alike), cloud inventory software often includes features like QR code tracking that allow you to actively measure stock as it flows through your operations which can save you much more than the cost of a monthly software subscription.But the time-savings don’t end there the automation cloud inventory systems bring can drastically reduce the number of costly human errors you and your team make.2.Get Up-To-Date Inventory Reports & InsightsIf you’re business savvy, you probably know your top 5 best-selling products but do you know your lowest-selling?
You may notice how well you sell during Christmas, but do you know when demand actually peaks and troughs?Questions like these are answered by inventory reports automatically generated by cloud software.
By knowing your lowest-selling items, you can make strategic decisions like upgrading those products, changing your marketing tactics, or ditching them altogether to focus on something new.And knowing when demand for your products is actually at its peak, you’ll be able to order enough stock without overdoing it, saving money and storage space while also maintaining enough safety stock to prevent “out of stock” notices that cost, you customers.With the inventory reports, you’ll get from cloud inventory software, you’ll be able to deeply understand the last quarter so you can effectively forecast for the next, which means better customer service and faster business growth.3.Speed Installation & Easier Employee TrainingThe old way of doing business required you to install software on each and every computer your team uses and have a dedicated IT department to keep that software running.This cuts into profits slow down training time and increase labor costs.
Cloud software doesn’t require any additional employees or special hardware you just log in and get to work!And since they don’t rely on dedicated in-person training to teach your team how to use the new software, most cloud companies have streamlined their software’s learning curve so that everyone can understand the basics and start using it on day one.4.Quick QR Code Tracking SystemsQR and barcodes are essential to modern cloud inventory management; if you’re not using them, you’re practically living in the supply chain dark ages.Paired with the right cloud software, they provide detailed, real-time insight into your inventory levels across your operations, saving you from ordering too much (which forces you to sell at clearance prices) or ordering too little (which forces you to break out that costly “out of stock” sign).While this is a more effective strategy than depending on educated guesses, with a reliable cloud inventory management system that uses QR or barcode technology, a few simple changes to your production processes can provide much more accurate data that lets you know exactly how much inventory you have in stock – saving you hours of time and reducing human error.5.Smooth & Continuous Ecommerce IntegrationCan you imagine manually entering all the data from your e-commerce platform into your inventory management system, and then again into your accounting software?
With inventory levels fluctuating on a daily basis, it’s no wonder that many retail businesses operate on inaccurate numbers.
The majority of inventory problems stem from poor inventory management practices.
When you have poor inventory management practices, the likelihood of lost sales increases significantly which often leads to an inaccurate ordering process that results in late deliveries of stock to your suppliers, which then damages your business’ reputation among them.
Fortunately, there is a solution: inventory management software.
This essential tool helps companies identify trends in their inventory and allows them to better plan for fluctuations.
If false orders are regularly being made, then having an inventory software that helps you regularly reconcile orders with your physical inventory will result in fewer instances of false orders being placed.
Is your #InventoryManagementsoftware Modern, Unified, Intelligent and Adaptable?No?
Then try Tech Cloud ERP software.With #TechCloudERP inventory management software, businesses can manage all their finances, logistics, operations and inventory in one place.Schedule a FREE online demoEmail: [email protected]: IND: +91 8919439603USA: +1 442 285 0780UK: +44 131 510 8706Website: www.techclouderp.com
