How does a company tell if they are in need of a product or they have stockpiled something that isn’t selling? Inventory management is the term that a company needs to have integrated into its system to answer that question.
A good system can massively boost a company’s cash flow. Let us look into the ways of an inventory management system and how it might need to be your company’s next upgrade.
What is inventory management?
Inventory management simply means the way a company keeps track of what they need to stock up on, and when. A company is able to look into the movement of its inventory and be able to purchase accordingly thanks to it.
It shows the flow of products, as it indicates how much stock a company has remaining and how much it is selling. A company is set to lose track and fall behind in inventory turnover without proper management in their inventory, and this requires a fast and functioning inventory management system.
What is an inventory management system?
An inventory management system is a company’s integrated software that automates the task of keeping track of inventory. An inventory management software is able to see the movement of the stock and its levels. It is also able to work with multichannel sales systems.
The system provides the company with optimized inventory tracking. Making sure the inventory levels and product availability across all the channels are up and working, the software makes sure that the company never has too much or too little of a product in their inventory.
It is also able to analyze data and generate reports on which product is bringing in the most profit and which is bringing the least. In a time when companies are laying behind manual work and moving towards digital transformation, an inventory management system is an absolute necessity.
Why is an inventory management system important?
An inventory management system acts as the backbone of a company that is at the very least concerned about positive inventory turnover. This being the general consensus, the software actually does a lot more for the company than it may seem. Here are some important mentions:
Efficiency through tracking
Inventory tracking makes it clear as day for the company to see where they have enough and where they fall behind. With all assets within the inventory being kept track of at all times, there is very little chance of overflow or shortage. Efficiency is increased as there are always just the right amount of products to deal with, no chaos of excess products or a product being stocked out on pending orders.
With software keeping track of inventory constantly, a company knows exactly where they excel and what they lack. An inventory management system gives the company invaluable insight into their strong and weak points, which can be extremely profitable for them if worked on. Knowing where the company stands inventory-wise is one of the key benefits it provides.
Cutting down on losses
A product that the company fails to sell is a product recorded as a loss. Inventory management software can help reduce that by updating stock numbers in real-time. This makes sure you don’t invest heavily in products that are not currently selling. It can also calculate the exact amount of products you need and when to place the order to meet customer demands in time.
The software can also help minimize losses through calculated projections made by analyzing sales. Even though not 100% accurate, these predictions can point towards possible losses by showing how much a product might sell in the future. This helps the company plan effectively moving forward into the financial timeline.
A proper inventory management system is almost synonymous with efficient warehouse management. Inventory tracking makes sure you use the space in your warehouse as efficiently and cost-effectively as possible.
Barcode scanning within the warehouse enables real-time updates on stock levels. Efficient use of space cuts down on whatever extra the company may be spending on storage costs. It borderline eliminates guesswork and provides control over the entire situation of a warehouse.
Improved multichannel management
An organized system helps you navigate effortlessly from one sales channel to another. The software keeps track of the inventory levels of each location, both as a sum and an individual. This way, you can rest assured that not a single product has gone under the radar, no matter where it may be.
Customer experience improvement
Inventory management not only benefits the company with internal issues, but also benefits them externally. The system makes sure mistakes are kept to the minimum and that the customers are satisfied. Customer satisfaction is entangled in more ways than one. Such as:
- Higher availability: Aforementioned automated features within the software makes sure the numbers within the inventory meet customer needs at all times. With high rates of availability, comes more customer needs fulfilled.
- More accuracy: inventory tracking within the warehouse makes sure all orders are taken accurately and counts make sure the correct product goes in and comes out. Accuracy within the inventory means accurate products going out as well, possibly eliminating the chances of wrong products being delivered to customers.
- Increased brand loyalty: Higher availability and good customer service being a given along with a good system, it results in customers being driven towards and being loyal to your company.
Such improvements in customer experience make sure you are ahead of your contenders in the industry.
With digital transformation in every sector imaginable when it comes to managing a company, falling behind in inventory management, one of the key processes within a company- is not something you would want. Enabling you to have all these benefits right within your reach — comes Nuport.
Nuport automates your entire inventory management platform powered by intelligence. Nuport also has APIs that can pull insights from your existing inventory systems. Creating efficient loading instructions following LIFO/FIFO/FILO processes, Providing real-time updates of the inventory and analyzing order trends and sales volumes- Nuport does it all. Schedule a demo today!