Small and medium-sized enterprises must practice great inventory management to compete with global corporations. Inventory mismanagement can raise expenses, reduce efficiency, and harm customer service. Which is why accurate inventory data collection and organisation are facets critical for small firms to stay competitive. To improve order management, increase profitability, and streamline supply chain management, small enterprises must use a variety of approaches and tools. Here are 7 tools that take priority when it comes to cloud inventory management tools in the UK and the rest of the world:
The ability to track inventory across warehouses and in real-time
This is the most important and fundamental requirement for inventory management software. When choosing any cloud inventory to manage your stock; make sure it’s one that reports on stock movement in real-time and tracks it in-between warehouses, delivery vans, shops, and other storage locations. It’s also necessary that your stock positions are able to reflect sales orders. Why? For instance, you don’t want to sell stock that has technically been “sold off” to someone else where your system has failed to record it. A system that relies heavily on manual input through human involvement could result in this situation happening time and time again – which puts your business at risk of not being able to deliver promised stock to a customer, delays in shipping and a negative impact on customer satisfaction. The perpetual inventory technique is an example of how automation helps in the inventory tracking process. While a periodic inventory (a more manual method of tracking used by traditional businesses) relies on employees to conduct regular stock audits – perpetual inventory tracking gives you a detailed and live analysis of stock fluctuations that always reflect the exact goods on hand.
The relationship between your inventory and accounting
While your warehouse managers and operations are concerned with what goods they have and where it is located – your finance team needs to know how much they’re worth.
A positive bonus to have included in your inventory management system would be a tool that tabulates accurate inventory values that consider account price and volume variations in all your transactions.
A few other tools that prove beneficial are:
Multicurrency support if you buy and sell stock worldwide.
The ability to track expenses (courier fees, production waste, etc.)
Viewing the Cost of Goods Sold (COGS)
In-depth purchasing & supplier management
Having proper inventory management software allows you to obtain control over your purchasing, which is a critical business efficiency. Naturally, knowing exactly what you have, how much it’s worth, and where it is allows you to make substantial business decisions. A tool that comes in handy here is one that helps your business manage procurement and all supplier transactions seamlessly. With this in your arsenal, you avoid making costly errors that cost you time and money to rectify (i.e. mistakes that come with entering inventory data or supplier details into your system each time manually.) Your best bet? The inventory system with a central repository for supplier details connected to your purchasing processes. This will allow you to autofill purchase orders with the data stored, enter specific quantity discounts, and view transactional history with every supplier you have.
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3. Transparent batch traceability is always a win
Any business that sells and delivers goods faces the risk of a product recall if things go awry. This happens when a product comes into contact with contamination (biological, chemical, physical contaminant, etc.) or is mislabeled. More often than naught, a customer would lodge a complaint, a risk of tampering is detected or when an anomaly comes up from routine inspections. The key to minimising product recalls and exercising good quality control is through an inventory system that performs top-notch batch traceability. Batch tracking is a helpful tool for quickly identifying and tracing product batches that you make, sell, and deliver. It’s a simple method for improving supply chain management while maintaining quality control. For example – if your organisation manufactures, distributes, or sells manufactured items or prepared foods, having a reliable batch tracking system is critical. This is then used to quickly identify and locate items in storage, during shipment, in stores, or in the hands of customers – whether daily or during a product recall.
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4. A tool to handle your BOM’s
A Bill of Material (BOM) is what specifies the exact proportions that go into making one finished product. The characteristics of a powerful inventory system is one that can manage BOM’s – so that the entire process of acquiring the right elements for manufacturing your product is run seamlessly. With this backing your business; your inventory software can automatically fill purchase orders from your BOM’s whilst allowing you to monitor the stock on hand. More complicated products that need to be assembled will also benefit having a BOM management system to handle multiple levels of BOM’s and reduce production waste.
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5. Reporting and analytics on every facet of your inventory
Do you know your inventory turnover rate? What are the average days it takes you to sell stock?
These are the reports and analytics your inventory system needs to have on hand at all times of the business.
The point with whichever software you choose is to eliminate the need for your team to manually extract and compile data each time you need to access information – so you can operate at a greater efficiency than before.
Other metrics that your software should show you are:
All margin calculations
The state of your backorders
Average inventory age
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6. Support for an omnichannel strategy
If the pandemic taught us anything, it’s that having several sales channels is essential for dealing with disruptions. In the context of inventory management software, this means that your platform needs to incorporate goods that are sold both physically and through online storefronts. Make sure that the software you choose has the capability to integrate with Amazon and Shopify for the purpose of business-to-consumer (B2C) or business-to-business (B2B) selling. Other supported integrations (like Square POS) would also come in handy at this time – so your business is able to receive payments from multiple outlets, and have stock reflected at the same time in all your warehouses when goods are sold. Your inventory system would then need to have an order management dashboard built-in, so that activities and reports from all your diverse sales channels can be viewed immediately.
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7. Mobile apps that increase convenience for yourself and the rest of the team
Your inventory software could be accessed from a desktop app or Internet browser – but that doesn’t mean the same solution would be available to you via mobile. This might create a bottleneck for business owners as well as shop-floor staff and the rest of the team who need to pull up critical data quickly; but must wait for access to a laptop or till they get back to the office. With the availability of mobile apps, everyone in your team can pull up stock quantity from their smartphone, sales staff can check what’s in storage with full visibility and estimate lead times, etc. This makes your overall workday much more efficient – whilst allowing your team to make faster business decisions while you’re monitoring everything from your own mobile phone.
It’s critical to consider the direct impact of implementing new software. Then, there needs to be a step-by-step process for the installation of the system as well as staff training before running with your new inventory management software. Before hand – you’d want the answers to whether it’s possible to execute an in-house rollout with your current IT infrastructure and knowledge, or will you need to outsource it. The ideal inventory management software will be user-friendly enough to be implemented company and employs an uncomplicated, clean, and powerful system that the team can understand.
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