Picture a successful retail business in your head. Maybe you’re picturing a small grocery shop, or a huge MNC. Then try to answer the following questions:
What do these two businesses have in common?
Do they both regularly have the goods in stock that you want?
Do they both carry goods through offline and online platforms?
If the answers to these questions are yes, both the businesses probably have a good handle on their inventories. And it’s even more likely that they’re using an inventory management software to do so. When you are not clear on how much inventory you have on hand, you can’t make smart reorder decisions.
You can’t accurately list goods on your ecommerce platform as you don’t have clarity on how much inventory you have to allocate to each channel. Inventory management is vital to succeed as a retailer of any kind — ecommerce, multi-channel, brick-and-mortar, or omni-channel — if you want to seriously compete, that is.
Let’s look at a few statistics from actual retailers who have experienced the hurdles of not using an inventory management software.
43% of retailers ranked inventory management as their number one day-to-day challenge.
Over 1,600 new warehouses were opened between 2014 and 2018.
With the emergence of new warehouses every day, the amount of people in need of inventory management processes grows in congruence with the amount of people who don’t know how to manage them. The importance of inventory management is a fact that can’t be ignored.
So, What is Inventory Management?
Inventory management is the base for a retail business to function well. Inventory management systems track the movement of inventory and stock as it comes and goes out of the warehouse. It’s a technique of controlling, storing, and keeping track of your inventory items. Inventory management is considered as an essential component of supply chain management, as it regulates all the operations that are involved from the moment an item enters your store until it has been dispatched. To put it in simple words, inventory management helps you streamline your operations, organize your resources, and maximize your returns.
The goal of inventory management systems is to know where your inventory is at any given point of time and how much of it is available in order to manage inventory levels correctly. Some companies may opt to scan in inventory via a barcode scanner to increase efficiency along the pick routes and accuracy of the system.
Unlike an ERP system, an inventory management system focuses on a single supply chain process. They often come with the possibility for integration with other software systems – point of sale, channel management, shipping – so you can build a personalized integration stack to the needs of your unique business. Inventory is the biggest asset to your company, so in order to save and make money, you need to protect that asset and nurture it in the right direction. Using the right inventory software will be the key to success.