There are several reasons why inventory management is important and why it’s continually becoming more important as time goes on.
One of the biggest reasons inventory management is important is because it will always directly affect your companies profitability and scalability. Below are the things you need to know about inventory management in 2021.
What is Inventory Management?
Inventory management is the process of tracking and managing inventory for the good of your business. When inventory management is done right, you’ll maximize your profits, efficiency, and the effectiveness of your warehouse.
The best way to ensure that your inventory management is on point and done right is through an inventory management software solution. Software designed for inventory and warehouse management can offer you more benefits than just tracking inventory.
Inventory Management Software
Inventory management software will allow you to track your inventory, availability, sales, trends, and more. With a good inventory management software set up correctly, you’ll be able to ensure your business stays more profitable by selling more inventory before recording, never missing an order, and limiting the amount of dead stock or obsolete inventory that your warehouse comes in contact with.
You’ll also be able to increase your customer satisfaction by ensuring that products make it to their destinations on time. All in all, inventory management software is going to make your business easier to run.
Things You Need to Know in 2021 and Beyond
Here are the benefits of inventory management and why it’s important to practice good inventory management. Keep in mind, these are some of the most important benefits but not necessarily all of them.
Storage Costs
It costs your business to store inventory. If you aren’t storing the right inventory, you may find that your business becomes less profitable because the inventory taking up your warehouse space is obsolete or simply not selling fast enough.
With an inventory management system in place, you’ll track what inventory is selling faster and where you should be placing more of your funds to be more successful as a company.
Minimize losses
By not storing obsolete stock or purchasing more stock than you should be based on current purchasing trends, you’ll be able to minimize your losses and ensure that your business is run at the highest possible profitability.
Sell More
When you double down on the right inventory, you’ll be able to make more money and continue selling more and more over time.
Boost Efficiency
A lot of time in a warehouse is spent working on tasks that could be automated or done by AI technologies. We’re not saying that you need to replace your employees with robots, but what you should do is employ a warehouse and inventory management software that takes care of counting and tracking all of your inventory from point A to point B. By doing that, your employees will be able to spend more time on tasks that bring more value to the team and keep your business running smoothly.
Improve Order Accuracy
When a customer orders a product and receives the wrong item or the wrong variation of an item, your business will need to eat the cost. This will not only cost you a lot of much-needed profit upfront but will also lead to unhappy customers.
Order accuracy is essential for growing any warehouse or e-commerce business.
Balance Sales Channels
In many cases, e-commerce companies have their products listed on several different websites. For example, some companies list products on Amazon, eBay, and Etsy all at the same time. While this is a great way to gain more exposure for your products, it can be difficult to manage orders when they’re coming in from multiple places.
Inventory management software will collect all the necessary data across multiple sites and ensure that you always have the necessary stock for the sales made across those channels.
Warehouse Management
Keeping track of employee time cards, time off, capacity tracking, and manage schedules are all frustrating menial tasks that can be easily moved into automation and only systems. Some software will also allow you to map out your warehouse and help your employees storing inventory and picking inventory from the right locations.
More advanced software can also help you track inventory through several different warehouse locations. You won’t have to worry about having two or more separate systems for every warehouse. One cloud-based inventory management system can track your inventory through a number of warehouses with ease.
Integrations
If you need your inventory management or warehouse management tool to also communicate with your point of sale system or accounting system, there are simple-to-use integrations for these as well. Here are a few of the common integrations that can be used.
Point-Of-Sale Systems: Tracking what’s selling and where is one of the most common POS integrations that’s used alongside inventory management software.
Accounting Systems: Having accurate numbers, keeping your working capital straight, and knowing the value of your current inventory are all things that can easily be automated and integrated into your accounting software.
Orderfulliment and CMS tools: Informing customers when packages arrive, offering order tracking, and answering customer questions are all easy integrations that can be used alongside your inventory management software.
If you want to learn more about inventory management and its benefits, be sure to check out the rest of our blog. We’re always writing more content about inventory management and its benefits. You can also learn more about our inventory management solution, Extensiv Warehouse Manager, and receive a free demo by reaching out to us today.
