Right from planning through its execution, business owners meticulously work on every aspect of the business to achieve their goals. They design business strategies to ensure that every penny invested in the business is utilized properly and there is no drainage in the business process. They put every effort to make business cost-effective and less debt-ridden. Too often, they implement a cost-reduction strategy on various business processes to increase cash availability and improve services. One of the critical business areas that business owners focus on is the inventory management process, and it is quite understood as it consumes a fair amount of business funds. Those who indulge in manually managing every single process of the inventory management do face huge challenges. Millions of companies globally have incurred huge financial losses due to poor inventory management practices.
An unorganized inventory management process can become an overhead cost for any business. In order to make them efficient, there are many things that business owners need to consider. They need to track inventory in real-time, manage suppliers and vendors, identify dead stocks, reduce overstocking, etc. Although businesses are following best practices for inventory management, a gap still exists somewhere in managing inventory in a cost-effective way. This gap can be filled by adopting a robust inventory management software (IMS) that uses its advanced features to tap on the uncharted territories of the inventory management process and overcome its long-standing issues in a cost-effective way.
This article sheds light on how an inventory management system can help to save costs and improve service.
How Can an Inventory Management System Help to Save Costs and Improve Service?
- Tracking inventory in real-time: The inventory management tool allows business owners to get real-time insights on the stocks. It is beneficial for businesses to know which items are more in demand and which one is less. Based on this information, they can stock their inventories before they run out of them and ensure that businesses meet the sales order in time. It also helps business owners to save costs on ordering excess inventories. Staff can even track the physical location of inventories’ and reduce the chance of misplacing them.
- Manage suppliers and vendors efficiently: Managing suppliers and vendors is essential for business owners to run business operations seamlessly. For instance, if there is a delay in delivering goods from one supplier, the IMS (Inventory management software) that has stored information diverts the order to them. With all the information available about the suppliers and their products, it is easy to claim a refund for return products without any disputes. It improves the relationship with suppliers and minimizes the revenue loss due to the supply of low-quality products.
- Saves labor costs: With a centralized inventory management system, there is no need to maintain the inventories record manually, and everything can be managed through software. Besides that, advanced inventory management software automatically tracks the stock level and places an order if the stocks are not enough. It helps to save time and labor costs required for documentation and taking approvals.
- Unproductive inventory: Unproductive inventory or dead inventory is used for inventories in less demand or slow-moving. It causes more problems for business organizers as it consumes unnecessary space and money. For good inventory management practice, it is essential to identify and eliminate the idle sitting inventories from the business. Inventory management software can be a useful tool in identifying the dead inventory. Once it is identified, the business owners can prioritize whether they have to retain the inventories or sell them. It helps them to release the funds blocked by the unproductive inventory and enhance cash flow. Usually, to eliminate these inventories, retailers use various tactics such as selling at a low profit, returning to suppliers if they allow, diverting it to other units, putting it for auction, etc.
- Warehouse costs: The inventory management system gives a clear picture of the inventories and stocks them as per requirement. Estimating and ordering the right amount of inventories means that the business owner does not need extra space or a big warehouse to store the inventories. The right inventory management software allows business owners to manage inventories within the small warehouse and save costs on renting a huge warehouse or buying a separate warehouse space. On the other hand, business owners can make more revenue with warehouses by leasing out the space freed up by efficient inventory management.
- Data-analytics: Most business owners are confused with one question, how much inventory is sufficient for running their business. Their answer lies with data analytics. Modern inventory management systems come with advanced data-analytics features that not only give details about the inventory consumption but also forecast the inventories required for the business. Further, it highlights the mistakes early on committed during inventory management and provides enough time to mitigate them before it goes out of control. All this information is useful to utilize the existing inventory more efficiently and saves costs on buying additional inventories.
- Cloud-based inventory management system: With a cloud-based inventory system businesses can access the common data about the inventories and allow them to order goods from anywhere. It helps to bring consistency to the business.
- Fast pace periodic cycle counts: When inventories are well managed, then periodic cycle counts can be fast-paced. It protects the organization from paying huge penalties that they are liable to pay when they fail in maintaining the quality of the inventory. Inventory management software can support organizations in conducting periodic cycle counts and improving inventory quality.
- Integration with other software: By integrating inventory software with other software such as accounting software, it is easy to process financial reports. It helps to streamline the tax-filing process and claim for exemption if applicable.
Efficient inventory management facilitates cash flow optimization and fine-tunes the sales process. However, the evolving business trend is complex and demands an inventory management system that reduces product delivery time and increases customer satisfaction. It should also minimize the capital costs for inventory management. Inventory control software efficiently addresses issues that modern businesses face and bridges the gap in quantifying inventory needs. Their exceptional features improve accuracy and bring transparency into the inventory management process.
Head on over to the Stock Sync website to get your online shop synced up with the future. stock sync is changing the game for e-commerce inventory management. With a huge number of integrations, your e-commerce store can now sync stock from various suppliers and sources such as Etsy, Walmart, eBay and more. Your intelligent Stock Sync app gets all your stock nicely fitted into a format and you can even set it to automatically download the latest stock items from your suppliers via download links. There are plenty of other features and functions that you shouldn’t miss out on as well. Head on over to the Stock Sync website to get your online shop synced up with the future.