Inventory management software is used to track inventory, orders, sales, and deliveries. In the days before computers were widespread, these kinds of data were often stored on physical paper spreadsheets. Needless to say, inventory management software is an easier and more efficient approach to keeping track of the flow of goods. Software for inventory management had its beginnings in the early 1970s when the UPC was introduced, an innovation that standardized bar codes for grocers and retailers. Since then, it has continued to develop and improve along with advances in computer technology. Some of the main functions of inventory management software include:
- Order management. Precise, real-time data on orders can help keep the company up to date on inventory levels, preventing them from either running out of a product or tying up too much capitol in excess inventory.
- Asset tracking. Barcodes, RFIDs, and other tracking technology are used to track products in both warehouses and retail locations.
- Service management. For companies that deal in services rather than products, inventory management software can be used to keep track of data like cost of materials.
- Product identification. To this day, barcodes are the primary means for inputting data about products into the inventory management software, although RFID tags are also gaining popularity.
Main Purposes and Key Advantages of Inventory Management Software Inventory management software is used for a number of important operations that historically were done by hand, and provides a number of advantages for cost reducing and increased efficiency. Inventory management software can allow companies to:
- Maintain an ideal amount of inventory. Too little inventory could lead to lost sales if a product is out of stock, and too much could constitute a waste of capitol better used for other purposes.
- Tracking inventory in real time as it is transported between locations, eliminating uncertainty during transit.
- Recording that shipments to a warehouse have been received.
- Packing and shipping items from warehouses
- Keeping track of expiration dates for perishables, as well as other data that helps reduce losses due to obsolescence or spoilage.
The major advantages of inventory management software include:
- Reducing costs. Maintaining an ideal amount of inventory prevents wasted capitol and lost sales.
- Increasing efficiency. With inventory management software, many tasks involving data collection and calculations can be automated, saving the company time and money.
- Optimizing warehouse organization. The physical arrangement of items within a warehouse can speed up the processes of picking, packing, and shipping.
- Insight into trends over time. Analyzing data recorded by the inventory management software can provide companies with valuable insights into trends and patterns. This can allow for innovative new strategies to maximize warehouse space, optimize inventory levels, and better accommodate the demands and supplies of the market.
Inventory management software is a key technological tool for handing warehousing, shipping, and retail logistics. If your business isn’t currently using such a system, or if the one you are using is out of date, it’s highly important to invest an in upgrade as soon as possible. This software can automate processes, track data in real time, and provide long-term sets of data that allow for a more streamlined, and a more profitable, business.