Manufacturing Inventory Software - Everything You Need to Know for an Effective Inventory Management
Inventory management refers to the process of keeping track of and controlling your company's inventory while it is purchased, manufactured, stored, and utilised. It controls the entire flow of products, from purchase to sale, ensuring that the proper amounts of the correct item are always available at the right location at the right time.
Types of Inventory
There are numerous types of inventory, and which ones you'll deal with is determined by the products you sell. Here's a rundown of some of the most common varieties you'll come across:
Finished/for-sale products: The items you sell to your customers
Raw Materials: The inventory you employ to create your final products
Work-in-progress: Unfinished products are inventory that is in the middle of the manufacturing process.
MRO (maintenance, repair, and operation) goods: This is the stock you have on hand to help in the manufacturing process.
Safety stock: this is the extra inventory you keep on hand in case of supplier shortages or demand spikes.
Every business that deals with inventory will require some sort of stock management system.
How Does Inventory Management Work?
Inventory management, at its most basic level, involves tracking items, components, and ingredients among suppliers, stock on hand, production, and sales in order to guarantee that inventory is used as efficiently and effectively as possible. It can go as deep as you need it to go, such as evaluating the difference between dependent and independent demand or estimating sales in order to prepare ahead. But it all comes down to your stock at the end of the day.
Why Your Business Needs Inventory Management?
Without an inventory, a retail business would be pointless. So, though inventory management may not be the most interesting topic, it is critical to the long-term success of your company.
Manufacturing management software system helps in the following areas:
Having insufficient stock to fulfill orders for which you have already received money can be a major setback.
Increasing your financial flow
When you invest too much money on inventory at once, it becomes unavailable for other purposes, such as payroll or marketing.
Shrinkage is avoided
Buying too much of the wrong inventory and/or not properly keeping it might result in it going ‘dead,' spoiling, or being stolen.
Getting the most out of your fulfillment
Inventory that is properly maintained and put away can be picked, packed, and dispatched to consumers more rapidly.
3 Benefits of Effective Inventory Management
Keeping track of your inventory is critical to your retail performance. After all, your duty is to produce things to meet consumer demand at the most basic level. You won't be able to do that without good inventory management.
The top 5 advantages of good inventory management are listed below. They all add up to demonstrate the significance of accurate real-time stock tracking, which is simple to accomplish with dedicated inventory management software.
There will be fewer sales missed
It's easy to run out of products and miss out on sales if you don't keep an accurate inventory report. Use an up-to-date inventory report instead of depending on your memory or a trip to the warehouse to decide what to reorder:
See what products you're running low on in a flash.
Compare your current inventory to what's been selling well.
Before you run out, place reorders with wholesalers.
Invest your money wisely
To be successful in retail, you must strategically invest your money by purchasing the correct amount of each product — enough to keep sales moving and avoid stock-outs, but not so much that certain things remain on the shelf and increase carrying costs.
Maintaining accurate inventory reports is beneficial. You can rapidly identify slow-moving products so you may mark them down and get rid of them to make room for new items, marketing, and other investments.
Keep customer satisfied
Accurate inventory reports can also help you in providing better customer service. It's not enough to check in with your supply chain management when clients report they haven't got one of the products they bought within a certain amount of time. You must be able to check your report and ensure that you have one extra in the warehouse if the product is lost.
You'll be able to sell customers the products they desire since you'll know new inventory is on the way if your inventory system is up to date with purchase orders. This type of communication encourages your clients to trust you, which is a key advantage in these competitive times.
How to Choose the Best Inventory Management System for Your Business?
Determining whether you'll require dedicated inventory management software is an important stage in your company's development.
It's a simple matter of determining which features your company requires in an inventory management system. Do you need to keep track of stock movements and locations within a warehouse, or do you need to plan inventory and keep track of trends, or do you need to do both?
Remember to check for three crucial aspects when assessing a system: real-time demand planning, data analysis tools, and near- and real-time data reporting.