Best Inventory Management Software

Inventory Management Software Guide

Inventory management software is used to help businesses keep track of their stock and materials. It can be used to manage inventory in one location, multiple locations, or across an entire supply chain. With this type of software, businesses can automate their inventory tracking processes, reduce manual labor costs, and increase accuracy of their records.

Inventory management software typically includes features such as order tracking, product categorization, barcode scanning capabilities, reorder points and levels alerts, supplier tracking and billing information, lot/serial numbers control for unique items or kits that exist in the warehouse only once. Other features may include value-added tax (VAT) calculations for international sales transactions and multi-currency support. The software also allows companies to capture real-time data on the state of their inventory so they can make informed decisions about future orders and purchases.

The benefits of using inventory management software are numerous: it reduces administrative time spent manually entering data into a system; it helps lower overhead costs by improving efficiency; it also helps reduce errors as it automates tasks associated with inventory tracking; it enables companies to access accurate inventory data quickly; it makes predicting customer demand easier; and lastly, it assists in facilitating better supplier relationships due to improved communication between the two sides.

Ultimately a good inventory management system can save businesses time and money while also providing them with important insights into what’s happening with their products at any given moment. It’s an invaluable tool for helping organizations remain competitive in a global economy while allowing them to deliver goods on time without having too much or too little on hand - ensuring greater profitability overall.

Inventory Optimization

The primary goal of every inventory management software package is to optimize the inventory tracking process. This means ensuring the business maintains the ideal number of items in stock and making those items available wherever they may be needed along the supply chain. A good system will let the business keep needed items on hand, while minimizing the need to overstock items. By using inventory management software, facilities can reduce their inventory volume by up to 25% after the first 12 months. Cash flow can be improved by up to 50% in the first two years, reported IDC Manufacturing Insights in a recent study.

Additionally, implementing an inventory optimization program can produce a variety of advantages for almost any business. It can reduce the overhead costs of storage, product loss due to expiration, and maintenance and improve customer satisfaction by delivering products more efficiently. Business owners also use the software to make better use of warehouse space, as well as predicting changes in supply and demand.

Inventory optimization software can be used in virtually any situation. While it's commonly used in retail, it has also been applied to manufacturing industries, helping to keep track of available raw materials and finished products. It can even be applied for use by service-oriented businesses, helping them track the supplies they use to provide their services.

Advantages and Benefits of Inventory Management Software

1. Improved Accuracy: Inventory management software eliminates manual and paper-based processes, reducing the risk of human error in data entry, order processing and tracking. The high accuracy level provided by the software ensures accurate inventory counts and automatically calculates real-time stock levels.
2. Increased Efficiency: Using inventory management software reduces the amount of time required to manage inventory thanks to automated processes that can be completed quickly and easily. Automated low-stock alerts ensure products are quickly replenished and enable staff to focus more attention on other areas of the business.
3. Improved Visibility: Inventory management software provides a comprehensive overview of all inventory items stored within an organization, enabling users to access important information such as item descriptions, prices, stock availability and locations with just a few clicks. This centralized view also provides better control over purchases and ordering cycles.
4. Enhanced Analysis: Inventory management software opens up new opportunities for analysis thanks to powerful reporting tools that provide insight into past performance and help identify trends. Users can evaluate their key metrics at any time or create custom reports tailored to specific requirements.
5. Reduced Costs: Investing in quality inventory management software can lead to cost savings through improving efficiency and reducing waste due to improved visibility and accuracy. Automating mundane tasks will free up employees’ time allowing them to focus on more profitable activities while also reducing costly mistakes caused by inaccurate entries or mismanagement.

Features Provided by Inventory Management Software

From the very basic to the very complex, there are software packages to suit every business' needs. While the most basic packages do a good enough job of counting stock levels, they don't provide the transparency and management capabilities that makes switching to this type of software worthwhile. To obtain the best benefits of implementing a new system, it's better to consider a comprehensive business management system, which provides inventory management capabilities.

All inventory management software applications possess each of these features to one extent or another. Optimizing inventory levels, using barcodes or RFID numbers to track products at multiple locations, and refilling inventory through purchases and returns are some of the most common features. Additionally, packages typically include warehouse distribution tracking options, the ability to compare purchases to inventory levels, and the option of ensuring products are moved in a more timely manner. Managing equipment and other fixed assets is also possible, which helps the system analyze future needs and create reliable financial reports.

The software package each business chooses will depend on the specific needs of the organization. While some packages may favor certain features over others, a more generalized application may provide a broader sampling of features. Ideally, a comprehensive system that includes POS (point of sale) features, CRM (customer relations management, and basic accounting software will serve most businesses best. Since inventory management is just one part of operating a business, a package that assists with these other business processes will provide the highest level of optimization. This will make it easier to ensure more accurate reporting, improve financial planning for the business, and to help stay on top of compliance and tax issues.

The software system you select should be adaptable to your business and easy to use. Additionally, it's important to ensure the inventory management process is capable of changing as your business grows. A program that makes use of cloud computing can help ensure your needs will be met by the program even as those needs change.

Additional Features

• Stock Tracking: Inventory management software provides real-time tracking of stock levels, allowing businesses to always know when they need to order more inventory. This helps ensure that shelves are never overstocked or understocked.
• Reordering Automation: Automated reordering is another major benefit of inventory management software. It automatically calculates order quantities based on factory inventory levels, past sales data and current demand forecasts so companies can be sure they are stocking up with the right amounts at the right times.
• Purchasing Management: Inventory management software also allows businesses to manage their purchasing activities in one place. This includes tracking supplier details, setting purchase orders and monitoring delivery dates. This ensures that companies have all the necessary information at hand when it comes time to make a purchase.
• Supplier Performance Monitoring: With inventory management software, businesses can monitor their suppliers performance in terms of order accuracy and delivery timelines. This makes it easier for companies to identify any issues with suppliers and quickly take corrective action if needed.
• Warehousing & Distribution Management: Inventory management software enables businesses to track where items are located within warehouses by scanning barcodes on products as they move around from station to station during shipping and receiving processes. This helps staff easily locate items when needed and increases overall organization efficiency throughout the warehouse operations process.
• Quality Assurance & Quality Management (QA/QM): This feature helps manage product quality by tracking defects as well as testing incoming materials for compliance with set standards before accepting them into the facility for processing or storage purposes.
• Cycle Counting & Physical Auditing: Keeping accurate records of inventory is essential for any business, which is why cycle countings and physical audits can be included in an inventory management system’s featureset. These tools help ensure that inventories are accurately accounted for in terms of quantity and value while also helping catch discrepancies between what was ordered versus what’s actually on hand before items reach customers’ hands

Next, we'll take a deeper look at the three primary types of inventory management software.

1. Retail & Small Business

Small businesses and brick and mortar stores primarily use inventory management software to track sales and fulfill orders. The system helps them keep supplies and products stocked, while automatically reordering items that need to be replenished. The system also helps small businesses free up space by ensuring expired, damaged, or otherwise unwanted items are returned to vendors.

Typically, small business owners opt for a retail management system, or RMS. These programs integrate point of sale systems with accounting and inventory management to provide a broader range of services.

2. Warehouse/Supply Chain Management

Warehouse management and supply chain management are the systems that move raw materials through a process that ends with finished products being delivered to retail outlets. This is a complex process, which is why warehouses and production facilities rely on a larger range of features in their inventory management software. Tracking products from the beginning of the production process through warehouse storage and shipping helps maintain accurate records in regard to meeting customer demands.

3. Enterprise Resource Planning (ERP)

Enterprise Resource Planning (ERP) software is the most comprehensive type of system, which helps operate multiple aspects of the business. Larger businesses use this type of software to improve productivity through more efficient product planning, as well as using it to streamline marketing and sales efforts, control inventory, fulfill orders, and handle accounting needs. More extensive packages can even handle human resources needs.

Even smaller businesses often opt for an ERP program, because of the broad range of functions it serves. This type of system improves transparency throughout the organization, making it easier to see what each department is doing. This helps manage assets more effectively, while providing the necessary analytics to ensure more accurate reporting.

What Are the Key Functions of Inventory Management Software?

The primary goal of any inventory management system is to perpetually maintain accurate inventory records. As numbers are updated in real time, new purchases and new sales are recorded in the system. A system that relies on barcodes and a scanning system eliminates the need for manual inventory counts, as well.

Finally, inventory records are synchronized within a single system. This allows businesses to track their products from the manufacturing process through the shipping process and at multiple retail outlets. This means every product is accounted for, even as it's purchased by a consumer.

Trends Related to Inventory Management Software

1. Automated Reordering - Inventory management software is becoming increasingly automated, allowing businesses to easily create purchase orders and send notifications when stock is running low. This helps to eliminate manual work and streamline the supply chain process.
2. AI-driven Predictive Analysis - Intelligent predictive analytics algorithms are being incorporated into inventory management systems to give companies real-time insights into their stock levels, demand forecasts, and other data elements that can help inform decisions about how much of each product to order or store in their warehouses.
3. Real-Time Dashboards - Companies are now able to monitor their inventory levels in real time with interactive dashboards that pull data from multiple sources across their entire supply chain network. These dashboards provide essential information such as predicted sales volume, cost calculations, reorder points, item availability and more so managers can quickly identify potential issues before they become bigger problems.
4. Mobile Accessibility - Many inventory management systems are now available on mobile devices, allowing users to access them anytime, anywhere and make important decisions on the go with just a few taps of a screen. This makes it easier for both customers and vendors alike to stay informed about stock levels and ensure items are always available when needed.
5. Cloud Integration - By integrating cloud technology into their inventory management system, companies can gain access to data from multiple stores or warehouses located around the world without needing physical infrastructure in each location or having to manually transfer information between them all separately. In addition to this convenience, cloud storage also offers added security for consumers’ sensitive information since it’s stored securely offsite instead of locally at one centralized location prone to cyberattacks or other hazards.

Who Uses Inventory Management Software?

• Retailers: Inventory management software is used by retailers to help them keep track of their stock levels and sales. This helps them plan for future orders, adjust pricing and promotions, analyze customer trends, and manage return processes.
• Distributors: Distributors are companies that receive inventory from manufacturers and resell it to retailers or other buyers. Inventory management software helps them manage the physical movement of goods from warehouse to store, control the cost of their inventory, plan better delivery routes, and monitor supplier performance.
• Manufacturers: Manufacturers need an efficient way to track the production of products at each stage while minimizing waste. Inventory management software can help them with controlling costs, planning in advance for materials needed in production, and setting up automatic replenishment systems.
• Warehouses: Warehouse operators use inventory management software to automate packing and shipping processes, verify product accuracy during pickups, validate the availability of inventory items on order dates, and optimize workflow with accurate stock taking cycles.
• Hospitals/Health Care Facilities: Health care facilities often require a complex system for managing medical equipment and pharmaceuticals because shortages can be critical for providing quality care. Inventory management software can help hospitals maintain real-time visibility into supplies available as well as anticipate when certain items will need to be restocked or replaced.
• Restaurants & Food Service Companies: Restaurant owners use an inventory system to keep track of food usage so they know when ingredients need to be restocked or reordered before they run out. Some systems also allow restaurants to create unique menus tailored towards dietary restrictions or special events.
• Ecommerce Businesses: Inventory management software helps ecommerce businesses manage the entire customer experience from order processing to product delivery. The software comes with features like automated stock control, order tracking and analytics for better business decisions.
• Grocery Stores: Grocery stores use inventory management systems to keep track of thousands of products, monitor stock levels in different stores, and help optimize pricing strategies according to demand and seasonality. The software can also help with forecasting upcoming demand and create purchase orders accordingly.

How Much Does Inventory Management Software Cost?

The cost of inventory management software can vary greatly depending on the features, complexity and number of users. Generally speaking, the costs for these systems range from a few hundred dollars for basic solutions to thousands of dollars for more sophisticated solutions.

For starters, cloud-based inventory management systems typically require monthly or annual subscriptions and range in price from around $20/month to $200 or more per month. These systems are often geared towards small businesses and may include features such as tracking stock levels, creating purchase orders, generating invoices and tracking expenses. The more comprehensive packages usually provide access to advanced reporting capabilities and mobile apps.

At the other end of the spectrum are enterprise resource planning (ERP) systems that are designed to manage large inventories across multiple locations and warehouses. Enterprise ERP packages can range from several thousand dollars up into six figures depending on the size of your business, level of customization required and desired features. Generally speaking, these solutions are best suited for medium-to-large companies with complex operations who need robust inventory management capabilities. These systems often include real-time updates on product availability, barcode scanning technology for faster order handling and modules for warehouse management, financials, manufacturing processes and customer relationship management (CRM).

Finally, custom inventory software solutions can be built by third party developers specifically tailored to your business needs. While this is likely going to be the most expensive option up front due to development fees associated with building custom software from scratch - it will also offer you the highest degree of customization available so you can make sure all your needs are met perfectly in one system.

In all, the cost of inventory management software can range anywhere from a few hundred to several thousand dollars - depending on your needs. It is important to assess your current business operations and decide what features and capabilities are most important for you. Also take into account costs associated with implementation, support, training and other related services when considering an investment in inventory management software.

What Integrates With Inventory Management Systems?

Inventory management software can integrate with a variety of software types depending on the company's needs. These types include accounting and finance software such as QuickBooks for tracking sales, expenses, and inventory balance; customer relationship management (CRM) systems such as Salesforce or Microsoft Dynamics for tracking customers and their buying habits; warehouse management software for organizing warehouse operations, such as picking and packing; product information management (PIM) programs for managing product details across sales channels; enterprise resource planning (ERP) systems to monitor production schedules and inventory levels; ecommerce platforms to manage online sales; shipping software to track shipments from suppliers and customers; barcode scanning technology to track products in stores or warehouses; manufacturing execution systems (MES) or supervisory control and data acquisition (SCADA) systems to streamline production processes. All of these systems have the potential to help streamline business operations and automate manual tasks when integrated with inventory management software.

How To Choose the Right Inventory Management Software

1. Evaluate Your Inventory Management Needs: Identify your inventory management needs by outlining the main objectives of the software and what features are required for effective inventory management.
2. Research Software Options: Research the different types of available inventory management software, including both on-premise and cloud-based solutions, to determine which one will best meet your needs. Make sure to read online reviews in order to get a better understanding of how well each product performs in real-life scenarios. Compare inventory management software using the tools on this page and sort by pricing, features, user reviews, integrations, operating system, country, and more.
3. Compare Pricing Packages: Compare pricing packages across different providers in order to find an option that fits within your budget. Pay close attention to any additional costs associated with long-term use or additional functionality you may need as your business grows.
4. Test Drive The Software: Take advantage of any free trial periods offered by vendors so you can get a feel for how their product works before making a commitment to it. This will allow you to ensure that the software is easy-to-use and able to meet all of your specific requirements before investing in it.
5. Ask For Assistance: If you’re still having trouble selecting the right software, consider seeking professional assistance from an experienced inventory consultant who can help you make an informed decision.