Inventory is a critical part of your business success and growth, but if not managed correctly, it can cost you time and money — especially if you’re using spreadsheets, paper manifests, or disparate software solutions across your company.
Did you know that 43% of small and mid-size businesses (SMBs) either don’t track inventory or use a manual method? Manual tracking is prone to human error and no tracking at all means you’re likely wasting time, money, and storage space that you can better manage and improve your overall inventory efficiencies.
Inventory management software (IMS) can help you take control of your inventory, eliminate repetitive manual tasks, automate routine processes, and integrate with other critical functions across your business for instant insight and more information to make better business decisions.
Here are 5 ways inventory management software can save you time and money:
Know Your PAR Levels
Do you know the minimum amount of stock your company should always have on hand to meet current and future customer needs?
Some companies refer to this as a Minimum Stock Level (MSL) or Replenishment Balance, while others know it better as PAR levels, which is short for Periodic Automatic Replacement level.
Whichever term you prefer, an inventory management system can help you always know the minimum product amount you should have on hand.
If your product is out of stock, you’re essentially holding the door open for your customer to walk out and into the arms of your competitors.
Instead of risking the chance of losing a sale because a product is out of stock, you can use inventory management software to track your current inventory and send you alerts when your product levels get near your MSL or PAR levels. You can even automate routine reorders so you never have to worry that you’ll be out of a product when your customers want it.
Real-Time Forecasting
Not only can inventory management software help you set and maintain PAR levels, it can also help you with more accurate product forecasting.
By integrating with customer relationship management software, accounting, and sales systems, inventory management software helps you get a more accurate picture into your past sales year-over-year, a historical picture of sales over time, as well as current sales and pending orders.
Couple this insight with current marketing trends and the current economic climate, and you can get a good picture of what your future product needs may look like.
Within your inventory management system you can also evaluate your current marketing initiatives with insight into your leads to conversion ratios to better forecast product sales models.
If your projections mean you need more product, you can quickly and instantly facilitate more orders right through your IMS platform.
Centralized Inventory Management
With your PAR levels set and your forecasting as fine-tuned as you can get it, an IMS can also help you centralize key functions for centralized inventory management.
Your IMS can give you instant insight not just into which products you have on hand, but also what supplies you have in stock, how much is needed in short-term and long-term, what’s been reordered, what needs to be ordered, and where everything is in the order, shipping, and receiving processes.
Centralized inventory management can also help you ensure you’re never stockpiling old products.
Products change over time, so you always want to make sure your oldest products in stock are the first products you ship out. Many companies refer to this as FIFO, meaning that the first products or supplies to come in are the first products or supplies you use or ship out.
Centralized inventory management also helps you when it comes time to do audits — not just that one big annual audit you may be required to do each year, but any time you want insight into your inventory levels.
An IMS with inventory tracking also means you always know which inventory you have where, no matter how large or small your operation is.
Save on Storage
Inventory management software can also help you save space (and ultimately money) on product and supply storage. Having the right amount of inventory on hand means you never have more than you need taking up valuable space in your warehouse.
Also, an IMS can help you better manage those supplies you don’t always want to keep in stock but want to ensure you have available for your customers. A good IMS should facilitate drop shipping so when you need it, you can send a product directly to your customer without having to store it onsite in your own facility.
Better Relationships With Suppliers and Customers
All of the insight you get with your IMS means you can better manage your time, resources, and bottom line, and can also improve your relationships with your suppliers, vendors, and customers.
An IMS can help you with supply chain management. You can always know what supplies you have on hand, the supply quality, and even any price changes those orders have over time.
If for example, you have a pending reorder that’s taking longer than expected to get to you, your IMS can help you make adjustments so, if needed, you can place orders with other vendors or make manufacturing adjustments based on the anticipated delays.
This insight means you can always be aware of what’s happening with your supply chain so you can keep the door open for effective communication with your vendors. The next time you’re in a pinch and need a rush reorder or if you have a product quality issue, you can quickly address it with your vendor.
And better relationships with your vendors means you’re more likely to have the products your customers want in stock when they want them — which leads to happier customers! You can even use your IMS to automate orders, invoicing, payments and shipping, all the while having complete insight into your business every step of the way.
Inefficient inventory processes cost you time, money, space and a lot of hassle, but an inventory management system can help you get a handle on all of your product needs — now and in the future.
Are you ready to see how inventory management software can help you be more efficient and save your money? Join us for an upcoming webinar to see aACE’s IMS in action.
