Many businesses across the world have started upgrading their traditional inventory management systems from inventory reporting and records management to planning and projecting inventory levels to improve productivity and profitability. Modern inventory management software solutions provide businesses with a suite of tools that helps businesses in controlling the inventory ordering, monitoring, and handling.
Every business has its unique needs. The set of features one business incorporates in its inventory management software might not work for other businesses. Therefore for many medium and large logistic enterprises, it is necessary to have a bespoke inventory solution. However a decision of what features should be included in the custom bilt inventory software solution still needs to be made. To make the selection of features easier, we’ve created a list of the ROI driven most popular inventory management software features. You can find that in the later part of the article. But first, let’s discuss why it is necessary for businesses with loads of inventory to have an inventory management system.
Why do you need an Inventory Management System?
But first, what is inventory? Often called merchandise or product, inventory refers to the finished goods and materials a business holds to sell it to its customers in the future. There is no other purpose of these goods except to maintain required demand-supply gaps. Usually, the total value of inventory is one of the largest numbers in the company’s balance sheets.
For manufacturers, wholesalers, and distributors, the purchasing department is the one responsible to procure new materials and reorder the existing stock. For e-commerce and traditional retailers the merchants or inventory control panel department is responsible for purchasing and reordering the inventory.
Inventory management software solutions support the activities of ordering products, analyzing the sales trends, and in-hand inventory availability. The software solutions also help in liquidation of products for the wholesalers, distributors, e-commerce retailers, and manufacturers. Inventory management software solutions are also helpful in ensuring the safety and security of the goods.
Read this before you buy any Inventory Management Software
If you’ve found this article on google, you might have been searching for best inventory management software solutions or something similar. You might have found many inventory management systems populating the search engine results page, which doesn’t seem suitable for your specific needs. A typical search will get you potentially unnecessary software solutions including those made for raw materials manufacturing and work-in-process inventory; warehouse inventory management systems; and many such standalone systems.
Before opting for an inventory management software, It is crucial to analyse will the software solution be tailored to meet the needs of your manufacturing, wholesale and distribution, retail, or direct marketing processes? It is also important to see the performance of the solution in your industry vertical.
If the existing solutions do not fit into your existing infrastructure, or do not meet the specific needs of your business, then it is definitely worth considering inventory software development If you are opting for custom inventory management software development, then you should consider asking your software development partner about how a inventory management system can be implemented to help the efficiency of your business..
As businesses are getting online, the inventory management methods are also required to be adjusted accordingly. Gone are the days when inventory control was a “back office operation”. The internet revolution required businesses to record in-hand and vendor inventory or order sales to be customer-facing. The customer-facing inventory management software applications provide SKU (Stock Keeping Unit) availability in respect to delivery location, retail stores, delivery dates, and many such parameters to make customers’ purchase process seamless. Don’t forget to include such questions in the search and request for Proposal (RFP) preparation.
1. Inventory Management
Inventory management software centralizes your basic and necessary warehousing functions. It allows you to keep a check on inventory details such as product specifications and history and stock levels. The data captured from different areas of business activities are synchronized to the system, ensuring that all your business functions use the same information. The synchronization becomes very crucial in breaking down data silos within the operations. Identical information to all will ensure a deeper collaboration among your departments.
Speaking of collaboration, modern inventory management systems should offer collaborative inventory management that empowers the vendors to manage their inventory levels for you. This feature becomes very helpful in situations where you frequently require sending your supplier’s product to your customers. The e-commerce industry coined a similar feature as SKU (Stock Keeping Unit). It allows the system to show the availability of stock on the online shopping store. Giving the authority of managing the customer-facing stock values to the vendors will mean one less burden for you.
The advancement in technological space is also getting reflected in warehousing technologies. The inventory management software solutions also feature stock shortage alerts that are powered by advanced machine learning algorithms. The systems learn your usage patterns and alert you on the basis of that. The system also allows you to manually set threshold values with buffer stock limits, so you never run out of stock.
2. Inventory Tracking
At every stage of the inventory life-cycle, it is important to track the inventory. Ideally inventory management systems should allow you to keep track of your inventory by RFID tags, serial numbers, QR code, barcodes and other such methods. Making use of such technologies will make your inventory tracking process seamless as there will not be much manual work required other than scanning the barcode or RFID tags. If you ever need to recall a certain product or batch, you can trace down the affected lots within the inventory management system.
An advanced tracking capability would allow you to locate your stock in the warehouse just by scanning the tracking tags. Then the system will use the information to streamline the pick and put away process by optimizing the routes for your team. It reduces the involvement and movement of labor in your warehousing activities, boosting the efficiency and productivity.
3. Transfer Management
Businesses managing multiple sites in different geo-locations leverage the advantages of moving their products where it’s demanded. Having multiple warehouses in different locations will create an issue where there will be a lack of transparency of inventory levels at different locations. Things get more complicated when you bundle the products during certain times a year. A transfer management feature will help you manage the inventory flow between multiple warehouses.
Transfer management allows you to track your inventory as it moves to multiple locations and warehouses in the overall transferring process. Such a feature can help guide and direct your workers by improving transparency and reducing the confusion.
Any production facility that heavily depends on raw material purchases to produce their own products should use an inventory management system that features a purchase management feature. This feature solely helps workers to create and manage POs (Purchase Orders). Creating and managing POs manually is time-consuming and less efficient. Inventory management systems for companies that frequently purchase materials, should include templates that can automatically populate with the relevant data from other parts of the inventory management system. Your employees should also be able to send email/messages to the suppliers using the system itself, reducing one more task for your employees.
The advanced purchasing system feature can automatically create POs for you based on the level of inventory. Whenever the inventory level is low, the system automatically notifies you and sends POs to the suppliers.
It is important for a business to ship the orders in the best possible way to ensure overall customer satisfaction. Customers often experience issues such as late deliveries, damaged products, or incorrect packages. You should opt for a software solution that can streamline the shipping process while making it as automated as possible.
Businesses often use standard shipping tools that include printing product labels and barcodes. If customer satisfaction is crucial for your business, your software solution should integrate with top third-party logistics companies such as FedEx and UPS.
There are more features you can desire for including dispatching orders as multiple shipments. This allows you to quickly deliver the in-stock products while the back-ordered goods can be dispatched at a later time. The system also allows you to ship the orders by lot ID, which is very useful to implement FIFO (First in First Out) and LIFO (Last in First Out) shipments.
6. Order Management
Traditional inventory management systems have the capability to help you manage your sales orders. These tools are helping businesses to customize pricing, send price quotes, track the orders, and simplify the return process. Some modern-day advanced inventory management systems can sync your sales orders with inventory levels, mark shipping ready items, and support omni-channel sales.
7. Reporting and Analysis
With the data being the new precious stone, businesses have already started utilizing their data related to business processes and customers. Inventory management software solutions come equipped with data analytics and reporting capabilities that evaluate the data patterns to forecast the future product demands. Predicting demand helps you to reduce the amount of safety stock that ultimately decreases your amount of money blocked in carrying the stock.
Data analytics also helps you know the demand anomalies that might happen during holidays or festivals. Using such insights will never let you miss any potential business opportunity. The software provides insights that are easy to understand and can be downloaded for offline purposes including PDF.
8. Cloud-based Deployment
A custom developed inventory management system can be deployed both on-premise and cloud-based infrastructure. Both options have their own advantages and disadvantages. The on-premise deployment is favorable for the companies that are more concerned about their privacy and industry compliance standards. Whereas the cloud-based deployment offers better accessibility, visibility and data backup for an organization.
There are SaaS, Paas, and IaaS inventory management solutions available in the market that are based on cloud-based infrastructure. Benefit with such a software solution is that the deployment cost for these solutions is very low as compared to building a custom inventory management software from scratch. However as an organization grows, they often find that off-the-shelf solutions do not fit the purpose and needs of the company due to the specific type of customers that they have, the challenges they face and the structure of their organizations both in terms of IT infrastructure and human resources. This is why medium and large organizations often turn to custom software development for their inventory management software.
Managing the inventory management process isn’t just about sitting at the computer desk and viewing dashboards. To automate warehouse processes, you would need to equip your workers/labourers with mobile devices on which they can access the inventory management software. If you want to utilize mobile phones, tablets, and other mobile devices at your warehouse, you can opt to build an inventory management software solution that supports usage on mobile apps or choose to build a PWA (progressive web application). Another crucial thing is that you should ask your software development company to create a inventory mobile app that is compatible with your existing software and hardware. This will minimise the disruption to your current processes.
If you already have an IT infrastructure for your business operations with systems such as a CRM or e-commerce platform, you should analyse if it is worthwhile integrating with your inventory system. If you decide that it is worthwhile, you should check with your software agency that the inventory management software you are creating can be integrated with your existing systems. If these other systems are integral to your business, you will need data to be shared amongst them easily, or you won’t get the most out of them.
Configurability in inventory management refers to a feature that allows a system to be configured for your use in two or more different locations. In this manner, you can use one software solution throughout your processes of inventory management. You might already be using systems that have configuraility to some degree. The configuration in inventory management software solutions include:
- You can configure a product based on its style, base product, size, colours, as well as SKU.
- A role-based employee configuration table that allows administrators to grant or restrict users within the organization to update or view the data.
- Ability to control different types of hardware and interfaces connected to the system.
Inventory Management Software Solution Development Cost
The cost of inventory management app development basically depends on the project requirements and the scope of work. Whilst the total cost is directly proportional to the number of man-hours required for the software development. The more features the solution incorporates, the more man-hours will be required. The hourly rate for a development team for inventory management software differs as per the country/region. The average hourly rate in Australia, Europe, and North America is $190, $130, and $150 respectively.
Depending on the various features, panels, technologies, and functionalities, the cost of inventory management software development ranges between $15000 – $30000.
Implement the Right Functions
While it is possible to include a variety of features and functionalities in the inventory management solution development process, you will need to decide which features will be valuable to your company and provide the necessary ROI to make the project worthwhile. This careful analysis will ensure you implement the right features and functions in your inventory management software solution. You know the major challenges that your business faces better than anyone else. Therefore you are suitably qualified to draft the solutions that you believe your business needs to make to better serve your customers and achieve business growth. However if you want to get the opinion of one of our business strategy consultants on the right features to select in accordance with your specific business challenges, then please get in touch.
However, the inventory management software vendor will help you understand how you can overcome your existing business challenges by using some advanced features such as demand predictions and advanced analytics.