Whether you deal with finished goods, raw materials, or any other form of products, inventory management is crucial for planning, storing, organizing, and tracking these assets. Without efficient management, how else do you plan to ensure an equilibrium between supply and demand? How would you forecast stock needs? It is therefore essential to erect an inventory management system to manage and plan the processes of your business.
If you are still wondering why proper inventory management is important, read on to find out more reasons.
1. Assets Tracking
Keeping track of your inventory is the key to a successful stock-based business. When you know where everything is located, how much it is available, and what is the magnitude of sales, it provides you a centralized scenery inventory. Consequently, it will allow you to forecast your needs and make the right decision at the right time.
Moreover, with inventory management software, one can track products using barcodes, serial numbers, and tracking criteria across the store or a warehouse —in real-time. Some modern inventory management software even includes wireless tracking tech for ultimate efficiency.
2. Accelerated Productivity
Organizing the products based on demand accelerates the frequency of order fulfillment. It saves the time and energy of your team, allowing them to utilize their spare minutes to enhance productivity. Not to mention, good inventory management will keep the system running even amidst great workloads.
Also, when you are fulfilling orders quickly, it will help you enhance customer satisfaction and retain their loyalty. No wonder the giants of the industry put extra emphasis on setting up an efficient inventory management system.
3. Task Automation
A business relying on manual tasks may not produce as much as a company that has automated the unnecessary human input. For instance, techniques like RFID and barcode scanning accelerates the acquisition, movement, and tracking of assists, which is only possible by incorporating a reliable inventory management software system. Additionally, the software will also be minimizing human errors and will free the employees from exhausting repetitive tasks.
4. Improved Inventory Forecasting/ Demand Planning
Using the historical data of past trends and sales, you can predict the demand for the stock by using inventory management software. It is one of the biggest advantages of this system that allows the business to make the most out of events and sale seasons.
However, calculating the future inventory needs does not always turn out to be accurate. For this to work, you must place a trustworthy system of tracking before analyzing the gathered data and forecasting.
5. On-Point Accuracy
Without finding out what is in the stock, it is impossible to analyze the difference between incoming supplies and demand. Fortunately, inventory management systems are efficient enough to track everything from backordering, the demand, and the sales. Since they are highly accurate, businesses can easily figure out the exact amount of stock needed for the inventory.
Also, as mentioned above, if you have accurate figures of past deals and sales, you can even forecast stock needs for upcoming events with high precision.
6. Ensures Bulk Sales
Ordering in bulk is a common practice amongst businesses that do not possess efficient management and planning systems to deal with demands. The extra stock ends up costing a fortune, considering the cost of transportation, handling, storage, and supervision — not to mention, they are also at great risk of loss, theft, obsolescence, and facing natural disasters. Therefore, a portion of the stock may end up rotting if you are unsure of the sales.
Bulk shipment only helps when you know the amount you are ordering will make it to the market and that is only possible when you have a reliable inventory management system.
7. Saves Time and Resources
Excess stocks and stock-outs hurt the business profit, especially when the problems are left unfixed. But when you know the needs with high accuracy, you can minimize the loss to a great degree. Also, the time spent handling the extra stocks and to manage the losses can also be cut down, which ultimately improves your business efficiency.
8. Understand The Need for Multiple Inventories
If you own multiple warehouses in different locations, there is no better way to overview these multiple inventories and stock levels than a digital management system. Not only can you keep an eye on your warehouses but also distribution centers, making it easy to manage an expansive setup. This way you can harmonize your business and keep a tab on everything.
9. Accurate Decision-Making
Inventory management software comes with amazing analytics capabilities that allow you to make sense out of the acquired data. For instance, if you have been tracking sales for some time, you’d be able to predict the rise and falls, allowing you to make the right decisions timely.