What is 'Inventory Management'

Inventory management is the practice overseeing and controlling of the ordering, storage and use of components that a company uses in the production of the items it sells. Inventory management is also the practice of overseeing and controlling of quantities of finished products for sale. A business's inventory is one of its major assets and represents an investment that is tied up until the item sells.

Businesses incur costs to store, track and insure inventory. Inventories that are mismanaged can create significant financial problems for a business, whether the mismanagement results in an inventory glut or an inventory shortage.

inventory management softwarey

Inventory management software is used for a variety of purposes, including:

  • Receiving items into a warehouse or other location.
  • Tracking inventory as it is transported between locations.
  • Maintaining a balance between too much and too little inventory.
  • Picking, packing and shipping items from a warehouse.
  • Keeping track of product sales and inventory levels.
  • Cutting down on product obsolescence and spoilage.
  • Avoiding missing out on sales due to out-of-stock situations

Advantages of ERP inventory management software :

There are several advantages to using inventory management software in a business setting.

Cost savings

A company's inventory represents one of its largest investments, along with its workforce and locations. Inventory management software helps companies cut expenses by minimizing the amount of unnecessary parts and products in storage. It also helps companies keep lost sales to a minimum by having enough stock on hand to meet demand.

Increased Efficiency

Inventory management software often allows for automation of many inventory-related tasks. For example, software can automatically collect data, conduct calculations, and create records. This not only results in time savings, cost savings, but also increases business efficiency.

Warehouse Organization

Inventory management software can help distributors, wholesalers, manufacturers and retailers optimize their warehouses. If certain products are often sold together or are more popular than others, those products can be grouped together or placed near the delivery area to speed up the process of picking.

Updated Data

Up-to-date, real-time data on inventory conditions and levels is another advantage inventory management software gives companies. Company executives can usually access the software through a mobile device, laptop or PC to check current inventory numbers. This automatic updating of inventory records allows businesses to make informed decisions.

Data Security

With the aid of restricted user rights, company managers can allow many employees to assist in inventory management. They can grant employees enough information access to receive products, make orders, transfer products and do other tasks without compromising company security. This can speed up the inventory management process and save managers' time.

Insight into trends

Tracking where products are stocked, which suppliers they come from, and the length of time they are stored is made possible with inventory management software. By analysing such data, companies can control inventory levels and maximize the use of warehouse space.

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