Inventory management or stock control is a critical aspect of running any business that deals with physical products or materials. In addition, properly managing inventory can mean the difference between a company’s success or failure, as it can impact a company’s ability to meet customer demand, minimize costs, and also maximize profits.
Inventory management systems can assist in several ways, such as real-time monitoring, demand forecasting, optimization, and automation. An inventory management system can provide real-time updates on stock levels, enabling businesses to make informed decisions about when to reorder and how much to order.
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What is Inventory Management?
Inventory management is the process of overseeing a company’s inventory, which encompasses the ordering, storing, selling, and utilizing of raw materials, components, and finished products. It also includes the management of the storage and processing of these items. Additionally, the various types of inventory management have their own advantages and disadvantages, and the choice of strategy depends on the specific requirements of the company.
The goal of inventory management is to ensure that the right products are available at the right time, in the right quantities, and at the right cost. Therefore, effective stock control can help a business to improve its operations, reduce costs, and increase profitability.
The Benefits of Inventory Management
Inventory management is a crucial aspect of running a successful business that deals with physical products or materials. In addition, properly managing inventory can help businesses meet customer demand, minimize costs, and maximize profits. Therefore, using the best software will give a lot of benefits, for instance:
Seamless inventory tracking
Stock control systems enable businesses to track inventory levels in real-time, ensuring that they always know how much inventory they have on hand, what products are in stock, and when to reorder. This also helps businesses to avoid stockouts and prevent lost sales.
Operational dashboard
Inventory management provides an operational dashboard that offers a comprehensive view of inventory levels, sales, and other key metrics. This helps businesses to make informed decisions about storage and identify trends or issues that need to be addressed.
Minimized waste
Efficient inventory management reduces waste by minimizing the amount of excess stock that a business holds. By optimizing inventory levels, businesses can reduce the amount of inventory that becomes obsolete or spoiled, and minimize the need for expensive storage facilities.
Optimized stock levels
Stock control systems enable businesses to optimize their stock levels based on demand and other factors. By maintaining the right amount of inventory, businesses can reduce costs associated with holding excess inventory, such as storage and insurance costs.
Also Read: Why is Stock Inventory Management Important in the Business?
The Methods of Inventory Management
Effective inventory management requires businesses to have a system in place that allows them to track inventory levels, sales data, and product demand. Thus, there are several methods that businesses can use to ensure they have the right products on hand at the right time. For example, here are a few of the most common methods:
Just-in-Time management (JIT)
JIT is a strategy that aims to minimize inventory holding costs by ordering inventory only when it is needed. This approach is particularly useful in industries where the cost of holding inventory is high, such as perishable goods, high-value items, or those that require specialized storage conditions. JIT can help businesses reduce waste, improve efficiency, and respond quickly to changes in demand.
Materials Requirement Planning (MRP)
MRP is a computer-based system that uses data on demand, lead times, and inventory levels to calculate the optimal time and quantity of inventory to order. This approach is particularly useful in industries where there are many components and subassemblies involved in the production process, such as manufacturing or construction.
Economic Order Quantity (EOQ)
EOQ is a mathematical formula that helps businesses determine the optimal order quantity for inventory. It takes into account factors such as demand, ordering costs, and holding costs to find the most cost-effective order size. By using EOQ, businesses can ensure they have enough inventory to meet customer demand while minimizing the costs associated with ordering and holding inventory.
Days Sales of Inventory (DSI)
DSI is a measure of how long it takes for a company to sell its inventory. It can be calculated by dividing the average inventory level by the average daily sales. By tracking DSI, businesses can identify trends in inventory turnover and adjust their inventory levels accordingly. Thus, if DSI is increasing, it may indicate that inventory is not moving as quickly as it should be, and the business may need to adjust their strategy.
Inventory Management System Recommendation
There are a lot of options for inventory management system to choose from. However, with so many choices available, it can be overwhelming to decide which system is right for your business. To help you make an informed decision, therefore, we’ve compiled a list of recommended systems that offer a range of features and functionalities to meet the needs of different businesses.
HashMicro inventory management system
HashMicro is a cloud-based Enterprise Resource Planning (ERP) software provider that offers a comprehensive inventory management solution for businesses of all sizes. In addition, the software is designed to be user-friendly and customizable to meet the needs of different businesses, and it also provides real-time analytics and reporting to help businesses make informed decisions about their inventory.
Some of the key features of HashMicro’s inventory management software include barcode management, lot and serial number tracking, stock request control, stock forecasting, goods valuation, and stock aging analysis. Which can also help businesses improve their inventory accuracy and efficiency
In addition, HashMicro’s software solution is designed to integrate with a range of other business software, such as accounting software and POS system, to provide a complete solution for businesses. This can help businesses streamline their operations and reduce the amount of time and effort required to manage their inventory.
Oracle NetSuite
Oracle NetSuite is a cloud-based ERP (Enterprise Resource Planning) software that includes inventory management as one of its core modules. Therefore, the software provides a range of features including inventory tracking, warehouse control, order control, demand planning, and more. It also includes advanced features such as lot tracking, serial number tracking, and barcoding.
EZoffice inventory
EZOffice is a cloud-based inventory management software provider that offers features such as stock tracking, asset tracking, check-in/check-out, and more. The software is designed to be user-friendly and can be accessed from anywhere with an internet connection. It also includes reporting and analytics to help businesses make informed decisions about their inventory.
ShippingEasy
ShippingEasy is a cloud-based shipping software provider that includes inventory management as one of its features. The software provides features such as inventory tracking, order control, purchase order control, and more. It also integrates with a range of eCommerce platforms and shipping carriers to streamline the shipping process.
Fishbowl inventory management system
Fishbowl is a desktop-based software provider that offers features such as stock tracking, order control, manufacturing control, and more. The software can be integrated with a range of eCommerce platforms and accounting software to provide a complete solution for businesses. It also includes advanced features such as barcode scanning and lot tracking.
Conclusion
In conclusion, inventory management is a critical process for any business that involves overseeing the stock of products or materials that a company has on hand. The primary goal is to ensure enough stock to meet demand while minimizing excess stock, which can tie up valuable resources and lead to losses.
Hashmicro’s inventory management system can be a great help whether you’re a small business owner or a large corporation. In addition, taking the time to understand and implement this effective software can help you streamline your operations, reduce costs, and improve customer satisfaction. Try a free demo now and kick-start your company’s inventory operations.
