Features to Prioritize When Choosing an Inventory System
Companies who can no longer stand the inefficiency and unreliability of manual inventory management approach oftentimes turn to digital solutions like an automated inventory system to address their concerns.
What is Inventory System?
An inventory system is a computer application whose features are designed to streamline inventory processes. It automates the processes that used to eat up a lot of time such as inventory tracking, organizing, the overall management, and even the material purchases, sales, and other production processes.
The market has a plethora of inventory software options as how it is with other digital solutions. The majority of them vary in terms of price and features but generally, they can be divided into three categories depending on their design, purpose, and functionality.
1st category: Automated “Manual” Inventory System
An inventory system under this category is usually modest. It utilizes an improvised spreadsheet approach and can already suffice for small-scale businesses, focusing more on improving order management and stock monitoring.
A manually managed inventory system can help manage various sales aspects. However, as it mostly depends on the manually inputted formula to carry out complicated computations, businesses face the risk of human error. Technically speaking, this category only makes use of readily available tools which means reliability and accuracy of the information can still be put at risk.
2nd category: Barcode Scanning System
As systems under the first category can still eat up time in logging the ins and outs of inventories, a revolutionized approach of inventory management using barcodes and barcodes scanners is introduced. This highly advanced technology is specially designed to aid in large companies as they aim to process a vast number of inventories quickly and it does this by pulling out information directly from POS or Point-of-Sale systems and automated cash registers.
In terms of product monitoring, barcode scanning systems provide real-time updating of inventories and updated purchase information to customers, allowing them to place their orders as soon as stocks are in.
3rd category: Advanced Radio Frequency Systems
RFIDs or radio frequency identification systems are currently considered the peak of current computerized inventory management. Intricately designed with exquisite features, this updated system has proven its worth in enhancing productivity and efficiency of inventory processes. It features end-to-end warehouse management which is best fit for large scale companies that control the movement of thousands of orders on a daily basis by attaching fixed tags to products that can be utilized as a beacon to monitor items from different warehouses real-time.
The Importance of Using Inventory Systems
The manual inventory management approach, although it has evolved and is already using computers, still depends on spreadsheet files which harbor a lot of disadvantages. For instance, while spreadsheet databases seem okay for small-scale businesses that manage only up to a hundred of products, once a business expands, the spreadsheet files can grow and get out of control. Its other downsides include:
- Risks of human error which can affect the accuracy and integrity of inventory data
- Delay in inventory updates
- It also cannot be integrated with other computer software
- Not scalable
- Poor data analysis leading to wrong decision-making
- Documents (spreadsheet files) are stored in a computer without a proper back-up system exposing in risks of data corruption and loss.
Meanwhile, an inventory system does away with all these and ensures efficiency of operations without compromising the integrity and accuracy of data. And if an inventory system is web-based, it is all-the-more prepared in terms of data backup to ensure that no data that are critical for wise inventory decision-making are lost.
Choosing the Right Inventory System through its Features
Every inventory solution in the market today comes with varying functionalities and features which means that to find the best tool for your company, you must go into details and take into account several important features that can be up to a dozen. The key to choosing the right inventory system is understanding each of the features explicitly as in terms of their purpose and usability. To help you decide easier, we have ranked the features in terms of importance.
The Most Important Features
- Centralized Hub. This feature ensures a common link among all sales points like store branches. By selecting a system that comes with this feature, you will be able to look over the sales from all points, thereby preventing the struggle of shifting from one point to another. In other words, this feature maintains an integrated inventory record if you want to monitor your overall inventory performance.
- Real-Time Data Updating. When managing inventories, the real-time data update feature is critical if you want to achieve seamlessly managed multiple warehouses where all transactions need to be taken into account sequentially. This feature also aids in accurate decision-making whenever urgent stocking is necessary.
- User-Friendly Interface. This feature plays an integral role in ensuring that streamlined inventory management is truly achieved. Basically, there is no point in having a multi-featured, highly sophisticated inventory system if it is difficult to understand or use. This can annoy the staff and downgrade their morale as the time it took them to learn the program is just the same as the time they wasted in doing manual inventory processes.
Other Features Worth Considering
There are other essential features worth considering depending on the complexity of your requirements and the nature of your business. These are:
- Automated Purchase Order Generation, where purchase orders are automatically generated, auto-approved, and emailed to suppliers as soon as stock reorder points are reached.
- Alert System, wherein the system automatically prompts an alert whenever an item is low in stock and has reached its reorder point.
- Return Management Facility, which manages returned products and inventories.
- Supply Monitoring, which enables maintenance of non-stock inventories, a.k.a. fixed assets, that you might want to sell in the future.
- Kitting, which helps you extract raw materials and items that still need to go through proper processing.
Cost is a Tricky Inventory System Consideration
If your budget is huge, more likely than not, you will feel inclined to go for a multi-featured, advanced digital solution. While these systems have more to offer, a part of these features may end up irrelevant to your requirements. Hence, before you seal any deal, you will want to make sure that all the features you are about to be paying for will surely contribute toward a maximized ROI. Otherwise, put that savings aside and go for the cheaper one.