The Best Guide to an Inventory Control System for Your Business
Monitoring inventory can start easy enough with your pen and paper or – for the more advanced – an excel spreadsheet! But, as your small business grows (and you know it will), you’re going to need a more sophisticated inventory control system. Some really top-quality software options take all the hassle out of inventory control. Here’s a simple guide to inventory control systems and which will be best for your business.
What is an inventory control system?
If you’re still questioning ‘what is an efficient inventory management system?’ and ‘what does an inventory management system do?’, we’ll clear this up from the start. An inventory control or management system is the process by which you track your goods throughout the supply chain. This means from the moment you purchase them through to the end sales. Every company has its way of managing inventory, depending on the size and nature of the business.
What is inventory control software?
There’s a technological solution for absolutely everything in this modern age, and inventory management is no different! Dedicated computer inventory management software helps you track and control inventory, with many cloud-based applications being the first choice. Inventory control software – or an automated inventory control management system – is the next step up from spreadsheets and the ideal way to futureproof your business.
This allows you to access your inventory data, any place and anytime!
What are the different types of inventory systems?
There are four different systems of inventory control. These include:
- Periodic inventory management tracks your inventory level at the end of an accounting period rather than daily. This can be done weekly, monthly, quarterly or annually.
- Perpetual inventory management: This tracks your inventory continually, allowing for automatic updates on inventory management as soon as stock is received or sold. This is usually inventory management software or a POS system. and allows you to maintain accurate and updated inventory levels.
- Barcode inventory system: These use barcoded numbers to identify and track products sold. The barcode includes useful information related to the supplier, manufacturer, product location and weight. There are two barcode types:
- Universal Product Code (UPC): This has the manufacturer and product code.
- Stock Keeping Unit (SKU): This is created by individual retailers for internal stock control.
- Radiofrequency identification (RFID) systems: This is where a tag in the stock contains all the relevant data, and a reader identifies this. Great for big warehouses and distribution centres.
Who uses inventory control software?
Inventory control software or an inventory control information system is used by many industries, from small-scale operations to massive warehouses. Here are some of the industries that should be prioritising the implementation of inventory control software.
- Food distribution: If you’re in a restaurant, grocery store or educational institution, then you are dealing with food on a daily basis. The difference between too much food and too little is key, which is why inventory automation is vital.
- ECommerce: If you maintain a warehouse for eCommerce activities, then investing in inventory management software is definitely worth it.
- Consumer goods: Seasonal changes related to consumer goods mean that constant inventory management is required. You don’t want to be left with too much of last season’s products.
- Electronic devices: Because of the exorbitant cost of electronic devices, inventory management control is needed to prevent overstocking and losing out on lots of money.
What features do you need to manage your inventory?
The great thing about inventory management software is that you can choose from a variety of features that make inventory control that much easier. When chatting to an inventory software supplier, you need to discuss the features available and decide which ones will work best for you – bearing in mind that you don’t want to oversubscribe and pay unnecessarily. Here’s a look at some of the features to consider.
If there’s one way to lose out on customers, it’s by not having the necessary stock level when they require it. Fortunately, inventory software can offer you an automated reordering feature that keeps your inventory levels in line. You need to set your minimum quantities for each item, and the system automatically generates a purchase order which is sent directly to your supplier. There are also reordering features that can base quantities on historical sales data.
With the rise of online shopping, many manufacturers require eCommerce integration so that all sales are streamlined to retail customers. Your eCommerce enterprise will be more successful by keeping track of all your stock and updating where necessary.
Point of sale integration
This is a really important inventory management feature as it helps automatically track when products are being scanned, checked in to an online cart and sold. You will benefit from real-time updates on your inventory which is useful for restocking and also monitoring buyer behaviour for more dedicated marketing campaigns in future.
This is where your inventory system analyses historical production and sales data so that you’re able to predict your stock management needs in the future accurately. This is hugely helpful in business planning as you can determine the right stock level required at any point.
For bigger retailers, manufacturers and warehouse operators, it’s not enough to know the number of units available but also the specifics of each unit. For clothing, you would need to know the style, colour and size so that you know what needs to be ordered and when to achieve the finished goods.
This is a great feature for tracking the movement of every inventory item into and out of storage facilities and makes warehouse management a simple process. As soon as a barcoded product enters, it’s scanned and enters the system. Barcoding is available in a number of options, including serial tracking and batch barcoding, depending on the value and type of product. Many barcodes can now be scanned using smartphones, so there’s no need to invest in specialised hardware.
RFID (radio-frequency identification)
This is a specialised inventory control feature whereby an RFID tag is affixed to products. As soon as they’re in close proximity to a reader, the product information is tracked. This is a great way to manage inventory count and streamline the process, eliminating the risk of forgetting to scan an item or misplacing it.
Product cost analysis
This inventory tracking tool monitors all your raw materials and finished products with automatic reordering of product components when they hit minimum levels. This is a great feature for the manufacturing industry as it’s able to generate a bill of materials with product and cost descriptions.
Why are inventory control systems important?
So, we’ve gone through the various features, but you might still be asking, ‘what are the benefits of inventory control software?’ Well, here’s a look!
- Improved productivity: Your automated inventory system means you will get more done quickly, with time saved on auditing and tracking inventory, alongside a healthy cash flow.
- Minimise old inventory: Your stock will be stored by date, your software is tracking levels, and you won’t be left with unwanted stock. This reduces waste and saves you money.
- Automation: Inventory tracking software means employees can focus on more productive tasks while minimising the risk of human error.
- Real-time updates: You can access real-time stock information at any time. Click into the system on your phone or tablet for up-to-the-minute information.
- Better customer service: Product stock is automatically uploaded with zero customer delay. Efficiently managing customer demand makes for happy clients and a profitable business.
- Accurate cost tracking: Your inventory software can calculate all the total sales, taxes and other fiscal information, allowing you to monitor the cost of your inventory as well as the stock itself.
What does the implementation process look like for inventory control software?
How is inventory control software implemented? And who is responsible for its implementation? You can work with a leading inventory control software supplier who can customise your inventory control system and assist you with implementation. You will need to get commitment from your team from the start, with any implementation process requiring on-site training and support throughout the process. No matter how great your inventory control software is, if you have a poor implementation strategy, then it’s going to cost you unnecessarily.
It’s best to start by contacting industry professionals. Omni Accounts is a leading inventory control system supplier with the right expertise to guide you in your selection and implementation.