What is an Inventory Management System? All You Need to Know

what is an inventory management system

Are you worried about managing all your inventory?

Then, opting for an inventory management system is the apt solution!

But what is an inventory management system?

Here’s your answer!

It is a business management system designed to facilitate time-consuming, post-purchase operations. It allows you to record, manage and track all your inventory, and aid with sales management, purchase management, accounting, and more.

Inventory management is of the utmost importance, no matter what size of a business! Not only it records the details of the goods present, but it can also help make decisions like tracking the most demanded item, highest sales points, and the best time of the year for sales and purchases etc. Though these decisions may look simple, they are the most complex in nature. By using an inventory management system, you can make the right decisions in a short time.

What is  an Inventory Management System and its Need?

what is the need for an inventory management system
What is the need for an inventory management system?

If you do not manage and track your inventory methodically, your business is prone to face situations like being understocked or overstocked. The excess stock has its own set of complications like fear of theft, expiration etc., whereas keeping a limited stock comes with a fear of being understocked.  In order to maintain a healthy balance of your required stock and for easy tracking of the required purchases, an inventory management system can come in handy.

What is an Inventory Management System and its Benefits?

This business management system comes with its fair share of ease and benefits. These include:

Avoid Data Redundancy

It keeps you from recording the same data several times, thus saving time, space and effort.

A Centralized Solution

For all your business needs related to inventory – be it stocking, purchase management, sales management or accounting, your inventory management system takes care of all.

Minimize Human Errors

It prevents you from making errors during data processing, leading to cost reduction that may result due to unnecessary purchases.

Optimize Business Efficiency

Recording all your inventory needs in an inventory management system optimizes the efficiency of your business. How?

  • By reducing the time required to process all data for making decisions.
  • As stated earlier, by reducing the probability of making errors in decision-making.

Accurate Data for Planning

Since there is no redundancy, the data provides an accurate insight into the inventory demand and supply. It helps to be precise while planning the inventory needs to meet the business goals.

Increased Transparency

Accurate data leads to a clearer picture of the organizational needs and helps focus on achieving the goals leading to the growth of your business.

what is an inventory management system and its benefits
What is an inventory management system and its benefits?

Provide SWOT Analysis

With the clear picture that an automated inventory system provides, it is easy to trace the strengths and weaknesses in your inventory management system. It not only helps to improve your system. But also, proves beneficial in tracking the products that are a strength of your business. Similarly, it gives you an idea of the opportunities that can help you grow in the market.

Detailed insight encourages you to track down the possible threats that may affect your business. So, in a nutshell, it not only serves you as an inventory management system but as a mechanism to have a deep analysis of your business.

Enhance Workforce Productivity

A centralized solution provides accurate data to all the employees that need it, thus saving time. It also streamlines a lot of tasks by automating them. Hence, helping your workforce to focus on other salient tasks.

Reduced Cost on Labor

Manually handling inventory management requires an increased workforce. An automated solution reduces the cost spent on labor assigned for data processing.

Better Organization

An automated solution for inventory management makes it easier to organize your data.

Improved Business Relationships

When you are clear about your business goals and needs, you will be better able to communicate them to the vendors, suppliers and other business partners. Hence, improving the business relationships in the bigger picture.

What is an Inventory Management System and its Challenges

As discussed above, the whole process of inventory management is a challenge. If the process of inventory management has loopholes; it can lead to dire consequences affecting your efficiency and productivity. The biggest challenge is the use of manual practices for document management and other processes involved. Not only the manual practices are inefficient, but also costly and time-consuming. It is also prone to inaccurate data and redundancy and occupies a large chunk of time and energy of your workforce in tracking down the stock.

The question arises, how can you minimize these challenges?

Well, here’s your answer…

An automated inventory management system tailored for your business!

But this does not end here. Purchasing good software is not enough. And implementing it in your business is neither easy. It is a complex process that needs consideration of the people and processes involved in your business. A comprehensive solution, keeping good practices in mind is an investment in itself that pays you time and again.

Keep reading to know what are the best practices.

What is an Inventory Management System Best Practice?

In order to achieve the best results in terms of productivity and efficiency, here are a few things that need consideration. An accurate inventory management system must have the following:

  • Labelled location names for every product and process
  • Labels must be easy to read and comprehend
  • A unique id for each item
  • Standard measuring units to be used company-wide
  • A starting count
  • Transparent processes and clear policies defined for your business
  • An efficient team who can support these defined processes and policies
  • A tailor-made software solution that adds efficiency and accuracy to your processes

 

Our Stance:

The key to accurate strategic decisions is error-free data. To ensure that YOUR data is precise, we recommend you go for an automated inventory management system that helps you undergo the SWOT Analysis of your sales, purchase and much more. Its benefits – are endless, and its uses – are numerous!

So, why wait?

Are you planning to automate your inventory management system?

We have got you covered.

At K&K IT Pvt. Limited, we provide the best-automated solutions for your business. Contact us to know more!