Whenever the phrase Inventory Management System comes to mind, most people think of retail shops. Typically, retail shops have many products that need to be tagged and tracked correctly. However, an Inventory Management System can benefit many industries, not just retail. This post provides an answer to the inventory management system and its benefits.
Inventory Management System can help manage your inventory by organizing and streamlining the process for control and maintenance; this ensures that the right amount of any product is available at the right time. Essentially, it helps you save valuable storage space.
What is an Inventory Management System?
Inventory Management System is a combined technology consisting of hardware and software. It allows companies to create processes and procedures to monitor and maintain their products. These products can be various things such as company assets, raw materials, or finished products, and tracking these things helps you efficiently manage your space and time.
An inventory management system consists of;
- A labeling system to identify each asset.
- This labeling system can be made based on asset tags or a barcode system.
- It should also have inventory categories.
- Hardware to identify and label each item in the inventory.
- This can be done using barcode scanners or smartphone apps.
- Centralized inventory management software.
- This stores information about the inventory products into a central database. Additionally, it should be able to analyze the inventory. For example, it should generate reports and predict demand for specific assets or supplies.
- Defined processes for labeling, documentation, and reporting of inventory products.
- Several existing techniques such as Stock Review and First-in First-Out should be used.
- Training employees to follow inventory tagging and logging processes.
Inventory Management is a crucial aspect of supply chain management. It oversees the flow of items in the chain, and each item can be tracked as it moves from manufacturer to warehouse to PoS.
One of the critical functions of any inventory management system is to store detailed records of products that enter or leave a specific location. Essentially, it is impossible to do this without a sound inventory management system. A well-defined and organized inventory management system ensures that each process is streamlined and also minimizes error as much as possible.
What are the benefits of an Inventory Management System?
Inventory management systems are essential for many organizations. At some point, assets and products that flow through an organization may eventually be lost, and these items need to be tracked. Inventory Management System enables companies to maintain detailed records of every item in their inventory, and it provides a single source for checking inventories. Additionally, item locations, stock, specification, supplier information, etc., can easily be checked from here.
Inventories generally consist of items that move around a lot, and an inventory Management System helps you understand where the thing is moving and when it was last moved. Also, some Inventory Management systems can help you predict the next time an asset might shift based on the previous usage. Furthermore, it can update you on current stock levels for various items. Also, it can help you determine what items are being used quickly. Thus, enabling organizations to use their assets more effectively.
An excellent fully-featured inventory management system offers several benefits to its users, such as;
- Enhanced cash flow
- Superior asset reporting
- Ability to forecast supply needs
- Reduction in storage and labor costs
- Better organization of the warehouse
- Improved asset transparency
- Excellent relations between suppliers, vendors, and partners
What are the challenges of an Inventory Management System?
Many of the challenges associated with an inventory management system come from human errors. Organizations need to define best practices that need to be followed. Moreover, employees need to be trained to use these best practices. Similarly, outdated methods such as manual documentation need to be prohibited. Employees must understand the value of the Inventory Management System.
Additionally, organizations must define storage layouts that need to be followed. When purchasing a new inventory management system, most organizations require a complete overhaul of their current system. These systems are usually inefficient. Essentially, this will help streamline inventories significantly. Also, it adds consistency to the entire process.
A sound Inventory Management System reduces the need for human interaction as much as possible. However, human interaction will still be required. Here, it aims to reduce mistakes via several methods such as;
- Removing the need for slow-moving inventory kept in stock.
- As a result, it frees up warehouse space and makes its bottom-line better.
- Erasing delays from the supply chain by ensuring required supplies are always in stock.
- Removing the need for manual documentation.
- Thus, erasing inaccurate records due to human error.
- Saving labor time which can be wasted due to tracking assets.
- Inventory Management System will automatically track each asset and therefore optimizes efficiency.
What are the practices you should adopt for an effective Inventory Management System?
Any effective Inventory Management System will require a setup phase. As a result, a significant productivity improvement can be found. These are some of the steps you can take to set up an Inventory Management System effectively;
- Categorize by different inventory items
- Define Location Names
- Create easy to read labels
- Utilize unique item identifications
- Define units of measure for various categories
- Purchasing an effective software solution that monitors and tracks inventory
- Well-defined, organized company policies and processes
- Trained employees that understand the Inventory Management System
CorporateStack Assets Management System
CorporateStack offers an excellent solution to Inventory Management systems in the MENA region. This module contains excellent features to manage, track and maintain your assets with outstanding performance. Also, it offers complete control throughout the asset life-cycle.
Some of the features of the CorporateStack Assets are;
- Easily track and manage your assets’ location ownership, and move them between branches, projects, and warehouses
- Flexible categorize your assets in a multi-level structure and flag unique assets.
- Asset information and documents are stored in the cloud for on-the-go access.
- Automatic numbering and barcoding, customizable based on different asset types
- Track asset repairs to make buying/selling decisions
- Define maintenance schedules
- Generate summary reports on asset logs on a monthly, weekly, or daily basis
- Automated depreciation calculation based on predefined rules
- Built-in interactive charts provide a visual representation of different aspects of your assets
For any query about Inventory Management System or CorporateStack Asset Management system, please feel free to contact us at firstname.lastname@example.org. We would love to help you understand and make better decisions for your organization today!