Many tips and techniques have been applied by enterprises to make inventory management more manageable and efficient. But for the best businesses, the secret to their success is simple: inventory management system.
With the onslaught of trends present in inventory management platforms, it’s no surprise that leading organizations have turned to inventory management tools to increase their service level. Let’s take a look at five of these trends and discover the role of technology in inventory management and how your business can benefit from them.
1. Advanced forecasting
Forecasting is the heart and soul of inventory management.
Picture it this way: You receive an overwhelming number of orders for your Black Friday Sale. You’re thrilled, so you decide to celebrate with a quick weekend getaway to the tropics or a lowkey dinner with your family. After all, who wouldn’t want to sneak away a little moment for self-care or some quality time with your loved ones?
Suddenly, an order notification comes and pulls the rug out from under your feet: your products are out of stock. And on a Black Friday!
Your weekend quickly shifts from a relaxing holiday to your worst nightmare: sending out refunds, dealing with customer complaints, and spending more time and money to fix your mistake, which could have been prevented with simple inventory software.
Accurate forecasting makes all the difference when running a business. In fact, inventory forecasting is considered as the most important inventory management practice by 61.3% of retailers and manufacturers, as per data from Statista survey.
While it is an incredibly daunting task, the best software for inventory management will help you get it done. Plenty of inventory management tools include features that enable you to sort different items into demand patterns on the basis of their characteristics and maturity. Some even allow you to chart demand and forecast history between your old and new products while others provide insightful analytics that present top-selling areas, order revenues and costs, inventory days, and customer demographics, among others.
Most importantly, automating your inventory guarantees an improvement in forecasting accuracy, thanks to the presence of the statistical algorithms incorporated in a digital inventory management system.
As your business grows, you need to be able to predict your customers’ behavior and understand your inventory’s history. With the right tools and practiced skill, you’ll be able to master these tasks in no time, ensuring both accurate short-term and long-term plans for you and your business. You can finally say goodbye to ruined holidays and all the quality family time you’ve missed out on.
2. Streamlined inventory
Cutting costs, improving efficiency and effectively rationing resources are essential in day-to-day inventory work. To foster business growth, you need an effective management system that optimizes your inventory and adopts a robust approach that is geared towards boosting your warehouse’s productivity from the first step to the last.
Using inventory management software streamlines much of the process. Most inventory management platforms include features that help you in reaching your target customer levels with the least tied up capital and the lowest inventory costs. They also have tools that compute aspects such as reorder points and predict which items you ought to have in stock and which items should not need to be stocked. This is essential in inventory management processes, for instance, for online grocery stores.
Inventory parameters embedded in the system also take charge of your products, thereby driving stock level optimization. The previously discussed forecasting feature also increases information on demand patterns, which provides you a well-rounded footing between capital and service levels.
Apart from these, a digital inventory system also allows you to perform inventory simulations. This allows you to dodge what-ifs when it comes to incorporating strategic changes and brand new tactics. These simulations test various parameter settings as well as multiple situations for inventory policies and service levels, giving you foresight on the possible effects of the change you wish to implement.
The truth is, ignoring automated inventory management is killing your supply chain. The move to optimize your inventory will become even more necessary as your business thrives and changes. And what better way to begin than obtaining a simple inventory software.
3. Automated restocking
Do you spend a good chunk of your time mulling about replenishing your products? Do you feel like a hefty portion of your productivity just goes to calculating how much orders do you need to place for your warehouse? If you do, then you need to oversee your product replenishment in a more efficient way, and there’s no better way than riding and relying on automated restocking, a feature present in inventory management software.
Replenishment has never been easier, since you can now automate order proposals if they meet particular factors. With the right inventory management platform, the only thing you need to worry about is reviewing order notifications to approve your order proposals. Manually filling up orders has also become a thing of the past, since inventory management tools take care of all that for you. Talk about boosting productivity and making more well-informed purchasing decisions.
4. Plotting and redistribution in compound locations
Selling through a bunch of channels is a dime a dozen when you own a business, and as your enterprise thrives, you add more channels to accommodate your organization’s growth. That’s a good thing, but combining the operations of two or more locations is not as easy as flipping a switch.
That’s why business owners are looking for solutions to remain globally competitive. An annual survey conducted by Peerless Research found that 93% of its respondents incorporated some type of warehouse management system, topping previous data that only showed 90%.
Automating your stock operations allows you to oversee your inventory across all channels in one platform. This is one of the remedies of technology used in inventory management. It also allows you to redistribute excess inventory from one channel to another where the product is more in demand. Thanks to this feature, you can dodge unwarranted purchases and use your warehouse space more wisely.
Inventory management software also set up virtual warehouses which incorporate inventory pooling strategies for low demand items located in various stock locations. Physical warehouses in a certain area cluster and act as a virtual warehouse, which cuts down supply chain inventory levels while fulfilling the demand for the entire region.
5. Getting the latest reports and analysis
Reporting and analytics are crucial to any retailer because they tell you about your business’s performance. Obtaining data and analyzing them correctly enables you to make well-rounded decisions when it comes to aspects such as stock ordering and replenishment, among others.
However, mishaps can happen if your data is not up-to-date and properly consolidated. To avoid business headaches, it’s best to turn to an electronic inventory management system that can provide you with the latest updates on your inventory performance in one glance.
Most platforms have customizable dashboards ingrained with key performance indicators such as service levels, rate of inventory turnover, and stock value, among others. The best inventory management software also alerts you with situations that demand attention, so you can be complacent on your warehouse’s overall state.
Choosing a Tool for Inventory Management
There are plenty of inventory management tools out there, but make sure to purchase one that is capable of tracking, routing and managing inventory in every location. Don’t forget to take in your enterprise size as well.
If you’re only starting out, it’s great to check out the best inventory management software for small businesses. Here’s a list of top 10 inventory management software from CompareCamp that you can check out.
Don’t let your inventory fall out of hand and hop on these trends to optimize your operations.
