Why Your Business Needs a Comprehensive Inventory Management System
August 14, 2023 - 12 minutes readEverything you need to know about the power of modern inventory management
If you’re a retail or business owner, keeping a firm grip on your inventory is vital. Without a solid inventory management system in place, the foundations of your entire business could quickly fall apart.
Once upon a time, using laborious manual stock checking, shipping logistics, and supplier management were the norm across industries, but in today’s data-driven world, they only serve to slow businesses down.
With a comprehensive inventory management system, you will streamline your processes for maximum output while driving down any unnecessary costs linked to your stock, ordering, and fulfillment operations.
The most forward-thinking brands in retail and eCommerce use modern inventory management systems to optimize their operations—and armed with your own tools, tricks, and software, you can compete with the best of them.
Intrigued? Good. Here we’re going to explain exactly why your business needs a comprehensive inventory management system.
But first:
What is a comprehensive inventory management system?
A comprehensive inventory management system is a mix of methods, processes, and software solutions geared towards improving every relevant part of your supply chain from the procurement of goods to the customer delivery.
With a cohesive inventory management system in place, you can keep a firm grip of your stock levels and storage processes while tracking your goods as they move their way throughout the supply chain. Modern inventory management software will give you the data-driven vision you need to stop guessing and start making informed strategic decisions based on concrete insights.
Working with the right tools and processes, you can also track inventory sales trends to uncover information based on best-selling products and seasonal demand from one central dashboard or location. In turn, you will enjoy the best possible return on investment (ROI) from your inventory choices
Why you need a comprehensive inventory management system
Now that you’re up to speed with the basics of modern inventory management systems, let’s look at the key reasons why your business needs one in place.
Real-time data
The best modern inventory management systems will serve up accurate real-time data based on the sales, stock movement, and stock levels.
By gaining access to real-time visual data, you can check your current stock levels with ease to make sure you never run out of essential inventory while avoiding situations where you might over order certain goods. Having untapped access to real-time data will also help you respond to any unexpected issues (sudden peaks in sales, supplier delays, shipping difficulties, etc.) swiftly and take the right course of action before they spiral out of control.
Accurate tracking
Innovations like RFID technology, barcode scanners, and GPS tracking systems will give you the tools to track your goods with confidence as they move through the supply chain. Each tracking tool, solution or innovation can integrate into the right inventory management software to help you keep tabs on your inventories’ progress during any stage of the process.
Not only will having access to detailed inventory tracking give you the power to fix any issues as they arise, but you can also keep your customers up to date with their orders. By giving your customers frequent updates and consistently managing their expectations, you will build trust while improving your brand reputation.
Digging deeper into inventory tracking trends will also help you uncover any patterns of inefficiency within your processes, giving you the insights needed to drive efficiency across the board.
Financial health
Without having a solid inventory management system in place, it’s unlikely that your processes will ever be consistent. Investing in modern inventory management software will give you a central view of every single cog in your operational machine, empowering you to make decisions based on genuine facts, figures, and data rather than making constant ‘guesstimations’ that ultimately cost you time and money.
There are several ways having a modern inventory management system will improve your financial health—these include:
- Uncovering operational trends related to your stock levels, suppliers, fulfillment, and shipping processes that will show glaring inefficiencies that are draining your budget
- Giving everyone in your business access to the tools and strategies that will allow them to be more productive and better at their jobs
- Showing real-time sales and stock data that will ensure you reduce the likelihood of investing in poor quality stock or inventory that is unlikely to offer a decent ROI
- Improving communication and collaboration in a way that drives efficiency, sparks innovation, and boosts your bottom line
- Saving you untold amounts of time by automating key parts of your operations while making it easier to track inventory movement and real-time stock levels
Read: Our essential guide to eCommerce store shipping and fulfillment for insider tips on how to level up your logistics strategy.
Customer experience (CX)
Offering a flawless customer experience (CX) is one of the very things that will set you apart from your competitors in the digital age
Many eCommerce and retail business owners overlook this fact, but having a comprehensive inventory management system in place will inspire long term customer loyalty. Having the right methods and tools in place will improve your fulfillment rates and consistently deliver on your customer-facing promises.
Keeping track of real-time stock data will also ensure your consumers never have to wait for their favorite products to come into stock—significantly improving the customer experience in the process. Knowing which inventory categories or items are most popular with certain segments of your audience or at particular times or year will also help you to improve your marketing communications.
Armed with a wealth of valuable inventory data, you can improve how you merchandise) your products in-store and online, run targeted deals, and drive more profits from your upsell efforts. Not only will this result in more sales, but you will also inspire repeat business, as well as more customer referrals.
Read: How proper customer segmentation can lead to more sales for top tips on how to personalize your content and earn more sales.
Inventory management software: final thoughts
“Innovation is the process of turning ideas into manufacturable and marketable form.”—Watts Humphrey
At this point in our journey one thing is clear: without having a comprehensive inventory management system, it’s unlikely that you’ll ever reach your potential as an eCommerce or retail business.
In today’s cutthroat commercial age, ensuring every aspect of your business is optimized for success is essential. As the backbone of your entire operation, your inventory management strategy will dictate your ongoing productivity, efficiency, and profitability.
To summarize, working with the right inventory management system will:
- Access invaluable real-time data
- Track your inventory with pinpoint accuracy
- Improve your financial health and efficiency
- Enhance your customer experience (CX) and marketing communications
If you’re ready to level up your inventory management system and get ahead of the competition, we have tailored solutions that will integrate seamlessly with your existing tools, platforms, and services.
For more information on what we have to offer, please contact us. We’ll be happy to help you start your inventory management journey.
Inventory management FAQs
How does an inventory management system work?
An inventory management system refers to the processes and software that facilitates the efficient tracking, handling, and fulfillment of stock as it moves through the supply chain.
An inventory management system is usually made up of essential pillars including purchasing, storing, moving, selling, and delivering. The right inventory management software will give a comprehensive overview of your entire operation, helping you monitor stock levels, sales demand data, and shipping information with ease.
What should I look for in inventory management software?
When you’re considering new inventory management software for your business, there are certain key features to look out for, including:
- An easy to use platform or interface
- The ability to integrate with your current systems and processes
- Customization features
- Solid user reviews and testimonials
- The ability to scale with your business
- Excellent customer service and user suppor
Tick all of these key attributes off your checklist and you will ensure complete inventory management success.
Why is good inventory management important?
As a retail or eCommerce business, having a good inventory management system or strategy is essential, as it will ensure you earn a consistently healthy return on investment (ROI) for your efforts.
Without a solid inventory management system in place, you will waste time on labor-intensive stock monitoring processes while draining your budget on poorly distributed resources. Working with the right processes and tools will help you drive maximum efficiency while eliminating any unnecessary costs linked to your inventory management processes.
By consistently delivering on your promises, you will also improve customers’ loyalty and improve your brand reputation. In turn, you will get ahead of the competition and accelerate your commercial growth.
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At Agiliron, we offer tailored order management and inventory control solutions. Get in touch with one of our solution experts to learn how inventory and order management software can help you operate more efficiently and increase your revenue.
