Efficient inventory management is vital for running smooth business operations. For this reason it is important to choose the right type of solution based on your specific business requirements and objectives. Working with a system not designed for your needs can result in erroneous data collection that can ultimately impact your bottom line. But the right inventory management solution can help you keep track of stock levels to raise productivity and improve business ROI.
To help you understand the importance of a suitable inventory solution, let’s first look at the key benefits it can provide for your business:
- Improved accuracy: Tracking stock levels is an important part of inventory management as it allows businesses to avoid both under and overstocking. This increases accuracy in stock levels and helps mitigate financial and operational risks. By tracking inventory, your business can also generate valuable insights that can help you accurately forecast future demand and usage.
- Customized management: The process of inventory management can be tailored to your business needs and system features can be customized based on business requirements, which translates into more flexibility for your business. For example, you can receive reminders for important events if you are using inventory management software. Customization improves accessibility of the solution while providing a holistic yet tailored experience to your employees; this helps deal with many specific user activities and concerns.
- Time-saving: Manual data entry for asset management is time consuming and inefficient. If you operate multiple locations, then an automated inventory management solution helps ensure efficient asset tracking and monitoring of your inventory levels. A consolidated platform helps you keep a detailed record of inventory procurement and maintenance that can be accessed based on your business requirements. This allows you to digitally manage your inventory without having to operate manually, and run procurement procedures without unnecessary disruptions.
- Enhanced efficiency: If your business has an off-premises warehouse, then analyzing the cost of inventory for every location is critical to increasing optimization and overall business efficiency. By locating inventory and linking it to its current location, you can streamline procurement and delivery processes. Expediting these key warehouse management processes helps improve your overall profits.
Read more: 6 ways asset management automation helps you achieve business KPI
Minimizing inventory costs through an inventory management solution
The Bureau of Labour Statistics reports that there has been an increase of approximately 3900 warehouses in the US from 2011 to 2021, which indicated the need for better inventory management to reduce production costs. When deciding on an inventory management solution, it is important to confirm that the solution matches the requirements of your business and is cost-efficient. Here are some ways you can ease the selection process:
1. Business Requirements
While several solutions are available that can reduce your business’s costs considerably, not all of them will match its needs. So, you need to consider whether the solution is suited to the nature of your business. For example, if you are a construction business, these requirements would include comprehensively storing information about vendors and equipment’s location, providing a secure channel for seamless communication and maintaining complete records of each item’s utilization and procurement costs. So, a solution that serves these functions along with providing ease of accessibility will be your priority. To make the right choice, you need to closely analyze your business requirements prior to acquiring an inventory solution to derive the maximum benefits.
2. Cost vs Budget
The price of most solutions is dependent upon the type and quantity of features being offered that directly cater to the kind of inventory management required by a business. If you run a small-scale business, then a solution with limited yet customizable features will be more suitable, as they will cater to the business concerns without exceeding your budget. In this way, you can benefit from using only the features that you require. While the solution must incorporate the basic tools of inventory management such as vendor management, stock level tracking and maintenance, more advanced features might not be required for small businesses. Therefore, it is advisable to analyze your budget to invest in the solution that best fulfills your goals, rather than one that is more than you need. Recently, cloud-based software, including other inventory management solutions, have gained popularity because they offer customizable feature sets at a reasonably low price.
3. Real Time Tracking
One of the most effective means of handling inventory includes using a system that has accurate scanning features such as barcodes, RFID and QR codes. These can be an important factor for maximizing output and productivity. With improved scanning all the item details can be stored on a digital platform that can be accessed through the barcode and QR codes to save time and know where the items are stored. Further, with an integrated solution, the tracking procedure is simplified because all the information regarding inventory is already available on one cloud-based platform. So, with an advanced inventory management solution, information can be linked to a single platform that is accessible to all your team members anytime, enhancing business efficiency.
4. Security
The inventory management solution you choose must allow you to have complete control over your data as well as a strong mechanism to ensure that your data is well protected. For example, you should be able to restrict access by role to your inventory management system, especially if it is a cloud-based solution, so that only authorized users can access your data. Advanced features in the solution like enabling only certain department members to have access to sensitive information (such as item availability within their respective departments) adds another layer of protection. This improves compliance with data privacy and confidentiality requirements.
5. Flexibility
A flexible solution is user-friendly, catering to primary business requirements, while also offering scalability as the business grows over time, often through upgrades and add-ons. Likewise, the solution must be easy to use with a high user experience, especially for technology-focused employees who need access to asset information. A well designed and flexible interface has customizable features that channel administrative workflows. For example, it will allow you to make edits to your inventory data and automatically adjust the inventory levels in times of new procurements or check outs.
6. Business Objectives
To make the right decision regarding your inventory management solution, keep your business objectives in mind. For example, if your main objective is to initiate timely purchase orders, then an effective inventory management solution that helps maintain and track the minimum stock will be beneficial. Look for a solution that saves time, streamlines logistical tasks such as managing inventory ordering, email alerts and maintenance schedules, and fulfills the operational and financial goals of a business. A technologically advanced solution will ensure that your objectives of reducing costs and improving inventory handling are being met through a single platform.
Read more: Streamline Inventory Budget Management for your Startup with Tracking Software
Conclusion
Poor inventory management is one the major reasons why your business might fail to meet its targeted ROI on management processes. However, choosing the right inventory management solution is the key to higher business efficiency and streamlined asset management. The right solution not only reduces the extra money tied up in inventory, maintains accurate stock levels and helps you take timely actions when faced with unexpected emergencies, such as alarmingly low stock, but increases a business’s overall profitability as well.
About EZOfficeInventory
EZOfficeInventory is a leading asset tracking software. It allows you to track, maintain, and report on inventory from anywhere, at any time. We offer a free 15-day trial – no credit card required!
