Advantages of Inventory Management System for Small Business
Importance of Inventory Management System for Small Business Owner
Today’s world is running like a hurricane. Nobody actually knows how fast the world is being run. Globally the whole world is moving. Technology industries are growing up with very numerous way. There is no alternative to living without technology. Field of Artificial Intelligence, Machine Learning makes the world most suitable place for the human being as well as tech freak also. Besides all of these, we need something important when we are going to start with our own business that is related to technology. And one of the important things is inventory management system.
Let’s see what is actually an inventory management system.
An inventory management system is a kind of combined result of use the desktop related software, some kind of barcode scanner, barcode printers and as well as mobile devices management of inventory based on streamline. Such as different types of goods, consumables, supplies, stock etc.
It is basically a kind of computer-based tracking system level of inventory on different orders, sales and others those are related to deliveries. This kind of software is being used for manufacturing the industry to create a work order, bill of materials and other types of documents which are related to production.
This inventory management system is being used from a very basic level for small business to high level company. Because the companies are using inventory management system for avoiding the product overstock and outages. This is an essential tool where a company can organize the inventory data which is generally before stored and get a hard copy of the form or in some kind of spreadsheets.
History of Inventory Management System :
Besides going to depth, let’s have a look at some history behind it. The universal product code (UPC) was very firstly adopted something for the industry of grocery. This adoption was made in April in 1973. On that adoption, it has been declared that a standard barcode had been applied for all grocers but that was not being introduced so much as retailing locations until 1974. This kind of steps was being really helpful for the inventory management especially for the United States as well as Canada too. This helped drive down costs of retailers of the above country. By this, there was now one primary and basic barcode system for the grocers and as well as other retailers to buy one type of reader for.
After that, in the era of 1980s, the personal computer was being very popular on that time. By the help of the personal computer, the cost of barcodes and readers also pushed down. This the first time where the very first versions of the inventory management system were being allowed in some kind of places. Besides this, one of the biggest hurdles in the purpose of selling readers and the barcodes to the retailers because on that time they didn’t have a place to store the information actually they scanned. After the times passed, when the computer is being become common and popular, this kind of hurdles was overcome. Because, the inventory management system is being spread through different grocery stores, the inventory management by hand become less practical then. Very soon, the writing off inventory data by hand on paper rarely replaced by digital scanning products and started to input the information into the computer by hand.
After the early 2000s, the inventory management system is being started to progress to the point. People use, especially the business people are no longer needed to input data by hand, they start to input data by computer and very instantly update their database with some kind of barcode readers.
And now, the modern era, by the existence of cloud-based business software like Megaventory, Handshake or Unleashed and the increasing adoption by business mark, the inventory management software has a great contribution to it. Now they usually allow integration with other business backend process, like accounting and another kind of sales those are very related to online sales.
Actual Purposes of Inventory Management System:
There are a lot of companies around the world who are very concurrently and often use the inventory management software. They use this kind of software or system because of reducing their carrying costs. Because, inventory management system or software is being used to track the products they actually produce and also the parts as they are transported from a vendor to a warehouse, even between in warehouse and as well as from the warehouse to a retail location or directly to the valuable customer.
Inventory management system is being used for various purposes, including:
- Via an inventory management system, it has been easy to track inventory as it is transported between many locations also from different locations.
- With this kind of system, it is very easy to receiving items into a warehouse to other locations as well.
- Companies can also interact with picking, packing and shipping items from a warehouse by this kind of management system
- Also, have a good track which can be kept of product sales and other inventory levels.
- Companies can be cutting down on product obsolescence and spoilage.
- An inventory management system is really helpful for avoiding missing out on sales because of out of stock situation due to sales.
Features of Inventory Management System:
An inventory management software has some several basic key components. Which components can work together to create a very cohesive inventory for many organization systems. These features are including:
An inventory management system can supervise the order of a company. Sometimes it has been reaching a very specific threshold of a company. Like, it sometimes says, to tell managers to a recorder that product. So, a company can get the help of avoiding running out of products things, so it can be trying up too much capital on its own inventory.
For example, a product is in a warehouse or a store. So, the consumer likes to track the product where it is being actually located. Via an inventory management system, often can be utilized to track the product through the barcode, some kind of radio-frequency identification (RFOD). And or some kind of wireless tracking technology.
Companies can supervise the service of a product via an inventory management system or software. Companies which really serve a primary basis service rather than product oriented service also can use inventory management system or software for tracking the cost of the material which they actually use to provide services to the customer. Such as, cleaning supplies. This is the only way where they can attach themselves on the prices of their services that really reflect the total cost they formally performed.
Barcodes are the very essential thing on the inventory management system. On inventory management system, these are often mean the whereby data on products and another kind of orders are being inputted into the system. After inputting, a barcode reader can be used on there to read the barcodes and have a look upon information of the products which represents the products. Besides this, a radio frequency identification like RFID tags which is come up with wireless technology method of product identification become very popular day by day.
Besides, in the inventory software modernization, the program is being a little bit high. Cause, besides barcode technology a new invention may use there. It is QR codes or NFC tags, which kind of tags is being used to identify the inventory items and smartphones as scanners. This is the method which provides an option for a small business to track inventory using barcode scanning.
A fully automated demand forecasting and inventory optimization system to attain key inventory optimization metrics such as:
Reorder point: the number of parts that should prompt a refill order.
Order quantity: the number of parts that should be reordered, based on the reorder point, stock on hand and stock on order.
Lead demand: the number of parts that will be vended during the prime time.
Stock cover: the number of days left before a stock out if no reorder is made.
Accuracy: the expected exactness of the predictions.
Key Points of Major Advantages of Inventory Management System:
Inventory management system is being used for the very high level business purposes to a low level of business purposes. On the both situation, this system is very helpful. Here are some major key elements of advantages of inventory management system. These key elements of advantages are the basic key points of advantages of inventory management software from the very basic level to top level.
- The inventory management system is a primarily which is about to so much specifying the shape and a good percentage for the goods are in stock both in grocery shop as well as warehouse.
- Via an inventory management system, companies are going to lead the stock of good to optimal inventory levels.
- The primary objective of inventory management system is to determine or control the stock level which can be helped the physical distribution system. Besides, the physical distribution system, the functions are also helpful for balancing the need for the product availability. This availability is totally against the need which is good for minimizing the stock of holding and other handling costs.
- The inventory management system can be also helpful for the companies for improving the above cash flows. This is very good point of view of perspective of inventory management system.
Advantages of Inventory Management System for Small Business:
If you have a company with some good stock of product. Now, it is time to write the quantity on the hand and all times is essential to any kind of product based business. Sometimes, it is not too much mandatory to meet the 100 percent consumer demand. Because, being too much, you will face the cash flow of issues.
So, in this situation, inventory management may have been some kind of limited to trial and error in the past. Because, you know, modern technology has some greatly improved system or software in this process with some kind of small business inventory management software.
Here are some good ways those ensure the real or actual benefit from this software and you can also find out the actual reason why it is a best valuable asset.
Expedient of Record Stalking
In every inventory management system, there is some manageable thing which is more outdated techniques. This can be described as inventory management techniques. These can be like as stock card. For the help of the most system utilization bar codes system or wireless tracking technology, this can be possible to make easy to keep up with the inventory counts all the times. Like, when you like to find out the how much product do you have in your inventory, you can search it just a few clicks of a database and find out the result very easiest way.
Besides, you can also locate your product or even a particular product in storage via the help of inventory management system. It should be some few clicks. Like, you just enter some brief information and the pinpoint things within in seconds. At the time you will get another result of quick scan which will provide you the best pricing information from the products that you already on the shelf. This is really a time-saving things throughout the day and also prevent some kind of confusion.
Resourceful Order Settlement
Sometimes it has been seen then, trying to keep the inventory quantities with some kind of numerous products list items which can ensure some arduous task. And this can be prone to the mistakes of life without careful attention to the detailing thing. By the help of inventory management system or software, a person can easily find the helpful solution in this case. Because most of the time systems will automatically notify you when some of the product that has been listed in really be in low of stock or high in stock. Besides, you can reorder with different amount of product with very confident and convenient way.
You can also find out the sudden surge of any product that is sold at an above average rate which becomes a very essential and necessary to catch the time and place the perfect order that is really running out of time. At the end, the result should become the shelves that are a very stoked thing and for this reason, customers are always getting to able to get the perfect product what they really need.
An inventory management system is really necessary when you are going to build a small business. For the reason of wide-ranging reporting with some analytical report as well as some sell statistics. Because analytics is very popular and really important for tracking the all area of business and inventory is no exception. In small business inventory software, this really needs to produce real time reports which can display how much each product have to be sold. On this way of comparing the products is really against with one another. Because this becomes so much clear on the circumstance of profitable and hardly selling the thing.
Besides, you can also keep tracking the other kind of orders in the sector of transit and the location of the products. This ensures the actual and enough workers on hand to put products in the storage and stock shelves after an order arrives from different clients.
Sometimes for the small business, an inventory management system or software is really important for monetary saving things. Because based on the report which ultimately provides to the company with some necessary data that make a highly informed decision when you are going to purchase the inventory in the future. If you think something very consistent for your certain kind of product selling, then you should also think some bigger orders which are being placed by your company and you also need more shelf space.
Besides, to keep your performance record of your small business or startup you should reduce the order taking from your client and also level up the frequency of the order from preventing a poorly performing product or even scrap it altogether. This types of step help you to place orders from the client more intelligent and convenient way and you can prevent the need to mark down prices where you end up losing money or loss of invest.
Sometimes it is impossible to control the better performance on the small business thing. Because everyone wants to able to keep a good control over the inventory quantities with the inventory management system. On that case, it should prevent some kind of needless errors from being made. For examples, sometimes it has happened that, a customer has already paid for a product but the customer couldn’t pick up the product yet. On that case, the product should be in the warehouse. For that situation, an employee who is under on that warehouse should be alerted that it doesn’t get sold. And this really a serious, reputation damaging issues for the startup business. In this case, an inventory management system can be helpful to the startup business.
Inventory Management Software:
There is some popular and handier open source inventory management system software. These are really helpful for customization about you small business purposes. One of them is inflow.
Inflow is an inventory management software basically focused on small and medium business purposes. The company is being grown up since 2007 and at present, it claims about 750,000 users. It has a free option which can limit you to up to 100 products and customers and also a baker dozen report as well. Besides, there are some advanced user features which are really not missing out for the purpose of inventory management system on small business.
Besides, inflow there are several open source and very popular inventory management system software, like, carta, right control lite, odoo, abc inventory. All of these are open source and really helpful for the small and medium business purposes of inventory management system.
There are several paid applications which can be found on online. But for the small business purpose try to use the open source product for less investment.
Inventory Management Techniques:
Sometimes it becomes important to know about the tools and techniques when you are going to apply something new to you small business purposes. Here are some major techniques which are really helpful for inventory management system.
Set Per Levels:
Make inventory management cooler by setting “par levels” for each of your products. Par levels are the slightest amount of product that must be on hand at all times.
First in First out:
“First-in, first-out” is an important principle of inventory management. It means that your oldest stock (first-in) gets sold first (first-out), not your newest stock. This is predominantly significant for unpreserved products so you don’t end up with unsellable decay.
Regular auditing of your products or stocks is really necessary. Because a regular reconciliation is vital for any business purposes. Sometimes, when you are very much relying on software and other kinds of reports from the warehouse, that how much products have you been on your stock. It is really important to make sure that, when you are an audit in practical operation, that should match with real life inventory.
Consider Drop shipping:
Drop shipping is really the ideal scenario from an inventory management perspective. As an alternative of having to carry record and ship products yourself—whether within or through third-party logistics; the industrialist or supplier takes care of it for you.
How Inventory Management System Works:
Sometimes it really needs to know how a method or system actually working on. Because without knowing a method or system so much it is really impossible to take a good part of the system. Let’s have a look how actually it works.
From the very beginning, at its core, the inventory control working by tracking with the help of two main functionalities. One is of you stock room or warehouse, which can be used as receiving or incoming and shipping or outgoing thing. The other goal part of inventory control is to make some accuracy to know the current inventory levels and these levels can minimize the understock thing and as well as overstock the situations. With observing the entire process with some efficient tracking quantities across some stocking minimize the understock thing and also the overstock situations, it can be possible to make smarter inventory decisions for your small business purposes.
At the end, it has to be said that, by implementing the right small business inventory management system or software, a person can easily make a streamline of some kind of operations. This helps a young entrepreneur to make right decisions for himself as well as the employees. Besides, it also keeps the storefront which can keep the product on stocked in a good order. If you follow the right track and research yourself with the inventory management system, definitely your customer will get a consistent satisfaction.
Ready to choose the best and very right inventory management system techniques for your small business purposes and start to implement the all the techniques you get.