Best Inventory Management Software
Inventory management remains one of the critical targets of companies. Every time an order remains unfulfilled, it dilutes the trust that the customer has in the brand. Obtaining Inventory accuracies is possible with the intelligent use of technologies. Companies have to embed the best inventory management system to win customers, serve them better, and to retain them for the lifetime.
What is Inventory Management Software?
Inventory management software is a highly effective tool used by millions of companies to prevent stock-outs and improve supply efficiency. Balancing all your current product demand with future needs while controlling your overhead and operating costs is easily possible with an inventory system.
How can you select the best Inventory Management Software?
Selecting appropriate inventory control software can be tricky. You should consider certain factors before obtaining an inventory software. GoodFirms has spent considerable time researching all aspects of the inventory management systems available. The following listings will familiarize you with the product reviews and features of the best inventory tracking systems.
List of the Best Inventory Management Software | Best Inventory Software
Orderhive is an eCommerce Automation Software that allows you to manage your Inventory, Orders, Shipping and all other eCommerce operations automatically. It comes with a promise to raise the bar for every eCommerce operation with an ultra-modern design, easy-to-use interface, robust features and seamless integrations with marketplaces, shopping carts, shipping carriers and accounting software in ... read more
Integrate all sales channels and manage Your orders with Multiorders - multichannel inventory management system and shipping management software - a perfect workflow-optimizing solution. Connect all of Your shipping carriers and print labels with just one click, manage pricing and stock levels of all sales channels from the same place.
Asset Panda is a highly flexible asset tracking and management platform that works the way you do to give everyone in your organization quick and easy access to information they need about your company’s assets—ultimately allowing you to work smarter. In addition to asset management, it optimizes and streamlines everything from auditing to facilities management to calibration tracking and so m... read more
Jazva's innovative eCommerce software solutions help mid to large size retailers and wholesalers reach more customers and sell more by simplifying, synchronizing, and automating the multichannel selling process. Jazva's all-in-one streamlined cloud-based platform also manages inventory system, CRM, marketing, and financial data, eliminating the need for numerous disparate systems. Our dynamic ente... read more
OpenBoxes is an open-source, web-based application developed by supply chain professionals working in resource-scarce settings. Already existing functionality includes inventory tracking, lot and expiry tracking, stock movement and shipment tracking, purchase orders, stock requisitions, and fulfillment, as well as built-in and customizable reports.
Order MS is an easy-to-use and advanced order management system that automates key aspects of your sales orders and brings you all the relevant business information and intelligence you need. Built as a generation Z platform, Order MS can help you improve sales performance, facilitate communication with your teams, suppliers, and stakeholders, and stay ahead of the competition. Order MS enables... read more
inFlow Inventory is the best inventory management software that helps small and medium-sized businesses in tracking inventory. Its other features include filling customer orders, reordering stock, generating purchase orders and invoices, barcode and creating customized reports. The software comes with the standard installation package for desktop computers, however, it is not available for the clo... read more
InventoryCloud is a fully-featured best Inventory Management Software designed to serve Startups, Agencies. InventoryCloud provides end-to-end solutions designed for the Web App. This online Inventory Management system offers Barcoding/RFID, Reporting/Analytics, Warehouse Management, Forecasting, Order Management in one place. inventory solutions are designed for organizations of all sizes. Fro... read more
TradeGecko is empowering eCommerce and wholesale merchants to become as fast and efficient as the world's biggest online stores. TradeGecko fuses inventory management operations, critical business applications and online commerce to build the central core of wholesale and eCommerce business operations. TradeGecko is a cloud-based inventory management tool for small to medium-sized businesses t... read more
Veeqo is a cloud-based inventory management software solution designed to help omnichannel retailers grow quickly. Sync inventory across all your sales channels, forecast and re-order new stock, manage every order in one place, pick & pack with speed and accuracy using the Veeqo Scanner, ship to customers, and handle returns from start to finish - all in one central platform. It is an all-in-one i... read more
Acctivate is a QuickBooks inventory management software for small and medium manufacturers, distributors, and online retailers. It extends the inventory and business management functionality of QuickBooks Desktop (Enterprise, Pro and Premier). Acctivate provides seamless integration with QuickBooks for inventory management, order management, barcode and business analytics. Companies can manage ... read more
Inventory management software for growing businesses. Increase your sales and keep track of every unit with our powerful stock management, order fulfilment, and inventory control software.
Cloud-based vending management software. Optimize your vending business with tools like live machine data, smart routing, warehousing, and many more.
Ecomdash is a cloud-based inventory management system that integrates standard inventory management features with order management and shipping management capabilities into one platform. It designed for small to mid-sized online retailers who sell through multiple channels. Key features of the system include multi-warehouse dropship management, multi-warehouse inventory management, barcode scan... read more
Stitch Labs is the leading inventory management system for rapidly growing brands. Purpose built for today’s modern multi-channel retailers, Stitch Labs provides scalability through improved efficiencies that enable sustained growth, while expanding into new channels and products. Stitch Labs also empowers retailers to take control of their operations through enhanced inventory visibility and ac... read more
Fishbowl, the #1 inventory management software for QuickBooks, offers multi-location tracking, manufacturing, bar-coding and more. Whether you are manufacturing, distributing, selling, servicing, or just managing goods, Fishbowl can handle your processes with ease.
UpKeep is the leading mobile-first CMMS/Enterprise Asset Management System helping maintenance teams deliver reliability for their facility. UpKeep has been named the #1 Maintenance Management Software by Gartner and has also been recognized as a top place to work in Los Angeles. UpKeep has over 160,000 registered users from small businesses to large enterprises including Yamaha, Jet.com, Unilever... read more
Sellbrite is a cloud-based inventory management solution designed for small and midsize companies. It offers order management, product management, channel analytics and inventory control functionalities within a suite. It helps users manage their online sales by providing them with the ability to list their catalog of products to various marketplaces. The shipping management functionality of the s... read more
Logiwa is an industry-leading cloud-based order fulfillment, warehouse, order and inventory management software that has served retail, e-commerce, wholesale, and 3PL businesses worldwide for over a decade.Our groundbreaking technology offers 70+ built-in integrations to marketplaces and e-commerce platforms, shipment carriers, and accounting systems. We also provide an open API for any custom int... read more
Salesorder is an inventory management and order management software, specially designed for distributors, wholesalers, and ecommerce. This order management software helps manage multiple sales channels, fulfillment, and accounting. Plus, the platform is fully customizable and is quite easy-to-use.
Finale Inventory provides a cloud-based, multichannel inventory management software designed for high volume eCommerce industries. The Finale is designed from the ground up to be customizable and versatile for YOUR workflow and YOUR processes. We accomplish this by assigning a dedicated account manager to each account. Their primary goal is LISTEN to better understand your requirements, provide re... read more
Cin7 is the automated inventory management system for brands that sell or distribute products. It synchronizes stock with sales and orders across every physical and online sales channel and automates order processes for greater efficiency. Omnichannel retailers and wholesalers use Cin7 to keep costs down, margins and cash flow high and stock at the right level as they grow revenue over $500,000.
Unleashed provides product businesses with supply, production, inventory and sales software, giving them clarity on their operations and helping them make effective business decisions. Thousands of customers in over 80 countries around the world trust Unleashed to be a fundamental part of their business operations, enabling them to better make, manage and move their products.
Our leading asset lifecycle management software enables you to create POs, schedule services and manage vendors effortlessly. Easy depreciation management and custom reports help you make well-informed business decisions. Use our mobile app for RFID, Barcode and QR Code scans; gain compliance with regulatory bodies. Location and maintenance histories make this a must for fixed asset management. We... read more
CyberStockroom is a powerful, cloud-based inventory management platform designed for small businesses and startups. Intuitive and easy to use, CyberStockroom is the perfect inventory management software for small business owners who know how critical it is to have an inventory management application but are not too keen on in the technicalities involved. Key features include applications for inve... read more
Zenventory is a web-based inventory management system designed for small and medium-sized businesses. Powerful yet simple, Zenventory manages vendors, orders, and fulfillment across one or more warehouses. Keep inventory management accurate by using Zenventory’s cycle count feature. Zenventory integrates with popular e-commerce and shipping systems.
Automated inventory tracking is critical to retailers and wholesalers, and helps ensure you have enough inventory on hand in the right locations to meet demand. Brightpearl's inventory management software provides visibility across all locations so you improve profitability and reduce the risk of overselling. Brightpearl’s flexible inventory management system has all of the features you need to ... read more
Clearly Inventory is an online inventory management software that is extremely easy to use. This Inventory management system has been developed with small companies in mind, who just want to get the job done. Our interface is built for busy people who don’t want to spend a lot of time learning how to use a new piece of software.
HandiFox is a mobile inventory tracking and sales management solution that integrates with QuickBooks and allows small businesses to automate their sales and supply chain pipeline administration.HandiFox™ is a leading inventory control and sales management solution that allows small and medium businesses to automate their sales, manage the supply chain pipeline and do sales in the field on mobil... read more
SalesBinder is an all-in-one online inventory management software system. Organize your customers, sales leads, suppliers, invoices, estimates, purchase orders and much more. It's easy-to-use and there's nothing to install.Manage your inventory and check stock levels in real-time.
Ordoro is a web app for small- and medium- sized e-commerce retailers to manage their orders, inventory and suppliers. Ordoro deals with everything that happens after a shopper clicks checkout on the retailer's website: print packing lists and shipping labels, manage inventory levels, manage dropshipping, manage customers, manage suppliers etc.
SKULabs is an inventory management software and WMS for ecommerce retailers that is hosted in the cloud and designed for all types of organizations. This helps e-commerce system enables businesses and retailers to stay on top of their business operations, manage essential facets of their enterprise efficiently. The tool provides users with a variety of tools and capabilities they need to drive bus... read more
Megaventory is a US company founded in 2010 - one of the first to offer online inventory and order management. Our specialized staff of PhD's and MSc's supports and expands the awesome software which serves companies in more than 40 countries around the world. We offer: - Most cost-effective software in the market to monitor every business in real time. - Invoicing, reporting system... read more
The world of Inventory Control software is rapidly evolving as organizations are able to obtain more and more insights as to where their inventory is going, the process it takes to get there and the issues that arise along that journey. With increasingly complex partnerships, supply lines and product portfolios, it is easy to be overwhelmed by the sheer volume of transactions that occur on a regul... read more
EMERGE App is revolutionizing the way for import and export businesses to manage their workflow process from quotation, sales, purchases, shipment and more effectively and efficiently; cutting costs and driving higher profits. AI-enabled roadmap to help importers and exporters make a better decision on inventory stocking and purchases.
Skubana manages all back-end e-commerce operations in one place, including order processing, shipping, inventory management, fulfillment by Amazon (FBA), vendor management and cross channel analytics. It is truly everything a seller would need to build a successful and profitable business, no matter if you're selling on one channel or several. The inventory management tool is at the very heart of ... read more
Web Suite Pro is a cloud based, real-time solution, designed to manage any business. Access and share your billing, invoicing, CRM, inventory and more from any Internet enabled device - anytime, anywhere. We are optimized for use on PCs and mobile devices - Blackberry, iOS, Windows Mobile, and Android. Simple. Fast. Secured.
RazorERP is a cloud ERP solution that provides first-class inventory management and multi channel synchronization for eWaste, ITAD, brokers, and IT resellers. We provide high quality software to the small and medium sized business that are under-served by larger enterprise software platforms. The software is in a constant state of continuous improvement by incorporating the feedback of our custom... read more
ShipMonk is revolutionizing eCommerce order fulfillment by providing the most personal and attentive fulfillment and inventory management system solution for today's global economy. Our multichannel order fulfillment service and software enables SMBs to focus on building their brand and achieving next-level growth.
Leverage the power of multi-module DEAR inventory management software to take your business to the next level. We keep the moving parts of your business all in one location while automating time-consuming tasks, whether you are in retail, wholesale, or manufacturing. It is a comprehensive inventory control software application positioned as a complete back end management system with product planni... read more
AdvancePro is a full-scale inventory management software designed for companies who have outgrown Excel or QuickBooks. As a partner in your business development, we optimize your operations in two ways: 1) Our team of business operations experts work with you to identify wasted time and money in your current workflow 2) We implement a system that complements YOUR business. AdvancePro streamli... read more
Primaseller is a complete POS software and Online Inventory Management Software Solution that enables multi-channel retailers to manage their Brick & Mortar in-store sales along with all their online channels of sale like their web stores or marketplaces like Amazon in an integrated seamless manner.
EasyEcom is an omnichannel inventory management solution catering to modern retailers. To provide a comprehensive technology platform to manage the Omnichannel business for growing Brands. EasyEcom accelerates the growth of enterprises with powerful, cloud-based platform that provides advanced features and different critical business reports based on data analytics.
Hippo strives to be the leader in simple maintenance management software solutions. This is achieved by developing user friendly software and the best support and services to our customers. Make the Complex, Simple Our top priority is our customers. With this in mind, we continually find ways to deliver the best maintenance software that is user friendly and meets the requirements of our cus... read more
Boxstorm is an online inventory management software free solution that you can access on any device through a Web browser. There's no software to download or server to maintain. Boxstorm integrates with dozens of business solutions and offers a wide range of tools such as sales orders, purchase orders and more to help you effectively manage your inventory.
ProfitBooks Trade is an easy to use inventory management software designed specially for traders and wholesalers. It lets you manage your inventory lifecycle right from purchase to sales. Easily create purchase orders, manage stock, record sales orders and maintain multiple warehouses.
ChannelApe is the supply chain toolkit for direct to consumer operations. Multi-location order management, inventory management with fulfillment and sales channels, optimization of shipping time/costs and business rule management. A Unified Platform for Global eCommerce Operations. It’s been our mission to create the best all in one operations platform for direct to consumer businesses. S... read more
Stock Konnect a Multi-Channel Listing Management Software is a powerful solution to easily list and sell the variation of products on multiple sales channels. A powerful listing of Inventory management system & e-commerce tool for eBay, Amazon, Shopify and other platforms that allow you to create new single and multiple variation listings, manage existing listings, control and sync stock, manage o... read more
PartKeepr is an open source inventory management software developed to help companies reorder items in their stock, and always have a clear overview of the products they have at disposal.
RightControl Lite is a fully functioning inventory control software that covers contact management, inventory management, sales management, warehouse management and invoicing through to despatch. And if that is not a good enough reason to try us out, RightControl Lite also features a comprehensive reporting system, allowing you to easily analyze your business statistics.
- Buyer’s Guide to Inventory Management software
- What is an inventory?
- What are the various types of Inventory?
- What is the financial value of inventory?
- What is the significance of Inventory as a part of Supply Chain Management or Logistics?
- What is inventory management or inventory control?
- Why Inventory Management is important?
- What are the techniques of Inventory Management or Inventory Control?
- What is lean inventory management?
- How to manage inventory in multiple warehouses and in different cities?
- What are some essential things to know about inventory management?
- What are some of the biggest problems faced in inventory management?
- What are the Negative effects of poor inventory management?
- What are the most valuable metrics of smart inventory management?
- How to save costs via effective inventory management?
- Who uses Inventory Management System?
- What is inventory management software?
- Why should businesses invest in inventory management software?
- What features one should look before buying inventory management software?
- What is the average cost of inventory management software?
- What is the market size of Inventory management software ?
- What are the things to consider before buying inventory management software?
- What are the Advantages of free and open-source inventory management software?
- What are the Advantages of cloud-based inventory management software?
- What are the top predictions of NextGen inventory management field?
- Why to refer to GoodFirms’ list of top inventory management software?
This buyer’s guide for Inventory management software is intended to provide users, businesses, inventory managers, and the software enthusiasts a complete all-in-one information source to understand the key essentials they must weigh upon before initiating to buy the best Inventory management software. It covers all the major aspects, terms, features, metrics, and the required analysis that one must know thoroughly before venturing to purchase an inventory management software for ones’ business needs. This guide enlightens the readers to make an informed decision about their technological needs regarding the management of the inventory-their most valuable asset.
Originally, inventory meant the list of items in stock, but today inventory has become synonymous with the stock itself. All the items in the stock that are being stored or packaged or transferred for selling purpose in a normal course of business operation are referred to as inventory.
Inventory is generally measured in units determined for that particular stock. Inventory is an important variable in supply chain management. It is an asset that can be converted into liquidity for profits.
Examples of inventory:
For a Supermarket, the items on the shelves such as a one-liter bottle of soft drink are inventory, and it is measured in liters or units (number of bottles available). Similarly, for a bank, cash held for loan purposes is inventory, and it will be counted in currency notes form. For a theatre, the seats are inventory, and they are counted as a ‘number.’ For a research company, unpublished reports that the company intends to sell for profit is an inventory. It will be measured in the number of reports available, and it will be assigned a monetary value by virtue of its quality. For a petrol pump, the petrol and diesel stored in their tanks are inventory. For an IT company, software solutions are their inventory. It can be counted as a number of subscriptions available. For a commercial water reservoir, the available water in gallons/liters is their inventory.
Businesses buy and store the materials used in the manufacturing process to produce the finished goods and components. These are called as Raw material. For example, natural rubber is a raw material for a tire manufacturing company.
The processed goods ready for selling purposes are known as finished goods. For example, a mobile phone set that is ready for shipment to the retailer, whole seller, distributor, or the online/offline customer.
The raw material that has been sent for processing and the goods that have been processed but only require a final finish is called Work in progress.
Also known as the Pipeline Inventory, transit inventories are goods that are being transported from one warehouse facility to the other. Most car companies require a lot of time to transport their automobiles from the warehouse to retail stores. During the transport phase, such inventory is taken into account.
Buffer inventory or safety stock is the surplus inventory held by the companies to prevent situations such as stock-outs. This extra inventory helps them to deal with the uncertainty of demands or supply.
Anticipation inventory is the extra amount of inventory accumulated by firms in anticipation of some near term event that will increase the demand for their products. This mainly happens during festivals, celebrations, global sports events, etc. when the demand for particular products increases for a short period of time. For example, during world cup cricket, or world cup football, the demand for beverages increases drastically. So, companies make prior provisions for supplying the extra required products.
In the production process of goods, sometimes a few machines can be down for maintenance or repair. In such cases, the whole production line cannot be halted. Companies keep some inventory in spare to mitigate such scenarios. This inventory is called the decoupling inventory. Generally, this type of inventory is in the form of spare parts and unfinished goods. For instance, if machinery that makes pistons for a car is under repair, then the whole process of car manufacturing cannot be stopped. In such cases, extra pistons kept in the form of decoupling stock would be utilized until the machine becomes functional again.
To maintain the Economic Order quantity framework, companies do not buy stocks in fixed quantities every time. To optimize the order set up, installation charges, and the holdings costs of inventory, companies tend to buy stocks in lot or batch sizes (often more than required). This extra inventory is known as Cycle inventory.
The MRO (maintenance, repair, and operating supplies) are the goods that assist in the production process but are not meant for selling. For example, a pharma company making a particular drug may require every employee to change gloves every day for maintaining hygiene standards of the FDA. Though these gloves are not meant for sale, the firm has to keep a huge stock of it, and its cost would be added to the raw material cost of the goods.
Inventory is a financial asset for a business. It is equivalent to money if the company is able to sell everything that it has in the inventory. It is the consistent source of revenue for a business, and it is the pivot on which businesses thrive. Without an inventory, businesses can run a risk of missing a sale or making a profit. During difficult financial situations, inventory can fetch a loan for the business by keeping inventory as collateral. In a nutshell, without inventory, business operations are at risk.
The supply chain management or the logistics in the business world refers to the various phases through which goods and products move and transit from the initial point supplier to the end customer. Healthy customer and vendor relationships are not possible without effective supply chain management. The inventory being transported is integral to the supply chain as, without it, there is no need for the whole logistics process. It is the inventory that balances supply and demand in the supply chain. Inventory movement is not just a salient feature of the supply chain but a salient focus point that makes the whole range of other business operations possible.
Inventory management or inventory control is the function responsible for all activities, decisions, and procedures related to stocks, inventory, and inventory movement in business. Organized warehouses, accurate inventory holding, smoothly tracked logistics, increased productivity and customer satisfaction, rare working capital issues, and optimized utilization of all stock resources are the focus areas of inventory management. As inventory is associated with tying up a lot of cash and resources for a firm, its effective management is not only a prudent idea but a mandatory function in business. It is the core idea on which the whole value chain for products is based. Procurement, manufacturing, supply chain, and sales are all non- functional without effective inventory management.
In simple words, all activities and efforts planned by companies to optimize their inventory-related costs will fall into inventory management.
Below are some examples of effective inventory management:
- A company warehouse is shifted to a place near the dockyard so that the time and cost of transportation of the inventory can be reduced significantly.
- If the company decides to elevate the warehouse (located in a flood-prone area) where inventory is stocked to save the inventory from constant flood conditions that leads to inventory spoilage
- A company lowers the production of a particular product as they monitor the analytics and reports generated by its inventory management software and find that the particular product is not selling as much as its group products.
- An eCommerce company deactivates a product from its website that is no longer available with its vendor as their software has notified that the product reached the refill point.
Inventory management is important because:
- It helps companies to meet product demands that are larger or smaller than expected. Using inventory management techniques and calculations, companies can make sure that a rational amount of inventory is available at all times.
- It helps to prevent unexpected delays in the supply chain of products.
- It mitigates the issue of the mismatch between the rate of demand and the rate of supply.
- Inventory management will prevent the halting of base operations by using decoupling techniques in case of worn-out machinery issues.
- Effective inventory management will never let your customers, vendors, or suppliers bear the brunt for unnecessary delays.
- It also automatically lets companies buy material when it is cheap and is expected for a price rise in the near future.
- It saves time, and costs for companies as efficient inventory management leads to reduced work hours and backlogs.
- It helps to avoid dead stocks and losing out to competitors.
Economic order quantity (EOQ)
In the inventory management field, EOQ is the widely accepted technique to approximately estimate the quantity of stock that needs to be ordered. The EOQ is a formula based equation that calculates the minimum and the most economical order quantity when certain inputs are provided. Three variables are taken into account to calculate the EOQ- demand in units (annual basis), order costs (per purchase), and holding costs (per year). There are online calculators available that can calculate the EOQ when these three variables are provided in the input.
Just in Time technique means companies will buy stocks only a few days prior to the requirement. This helps companies to avoid holding costs, dead stocks, and frozen capital. This technique is risky and can be only used when companies have reliable suppliers who can furnish products at short notice.
This analysis is very important for increasing profitability by focussing on more valuable stocks more than the least valuable ones. Companies divide their stocks into three categories, where A means most valuable, B denotes somewhere between most and least, and C means the least valuable stock. This analysis helps companies to direct their more time and efforts on stocks bringing in more revenue and profitability to their business. The most valuable stocks should never run out of stock.
FIFO and LIFO
FIFO (First-in First-out)
It is the technique of selling the oldest products first. The products that came in the warehouse first will be out of selling first. This helps companies to keep the newest products in their inventory while getting rid of the oldest ones. This technique is a lifesaver in cases of perishable goods and fashion-based goods like dairy products and the currently popular fashion accessories, respectively.
LIFO (Last-in First-out)
This technique is particularly useful when you ordered a product, and it came last, but it was costly than the previous one. This happens in cases of sudden price hikes in some particular products. In such cases, it is prudent to sell the last in first as it was the one for whom the company paid more price. The company can still hold the cheaper one so as it is not difficult for them to sell a cheaper product in the same category.
Re-order Point formula
A reorder point formula is the criteria that many firms use to determine the time point when the stock needs to be refilled. This formula triggers the need for reordering stock when the inventory has reached its lowest point. To obtain this point accurately your company should do regular auditing of your stock.
Re-order Point = (Average daily usage rate x Lead time) + Safety stock
You must have seen batches or codes on products. Mostly all consumer goods come with batch codes. The batch code offers a lot of information about the product. It can be used to trace the manufacturing facility, distribution channel, modes of shipment, etc. This helps when a company needs to recall stocks or find the source of defective stocks.
Demand forecasting: Independent and Dependent
There are two types of demand metrics: Independent and Dependent. An independent demand for inventory suggests that the demand for the stocks falling in this category is not limited by any other variable, whereas the stocks categorized in the dependent demand inventory are dependent on external factors and variables for their demand. For example, the demand for accessories of an automobile company is dependent on the number of units sold of that particular automobile.
Lean inventory management is a process of minimizing the wastage of time, efforts, and materials and increasing productivity and profitability. It uses various methods like Kaizen (continuous improvement), Kanban theory (move inventory only when requested by customers), Six Sigma (DMAIC-Define, measure, analyze, improve and control), Japanese 5S (Sort, Order, Shine, Standardize, and Sustain), TIMWOOD (Transport, Inventory, Motion, Waiting, Over-processing, Overproduction, Defect) many more. It focuses on demand management and process standardization to achieve the bottom line.
When you have to manage inventory in multiple locations with multiple warehouses, the synchronization and the real-time update of all stocks at all warehouses are essential. Remote data tracking of your stocks at all warehouses will let the staff members communicate effectively with each other and coordinate to create a seamless inventory management system. There are a few strategies that you can use to manage your multi-location warehouses:
- Make a return management system where an item shipped from one warehouse can be returned to another nearest warehouse.
- A cloud-based system allows accessing your inventory information from anywhere in the world. It is prudent to shift to a cloud-based inventory management system.
- Warehouse layout should be carved in such a way that it saves time and space to store, pack, and ship a product. The products that sell quickly and in bulk quantities should be stored near the shipping point.
- Strategies like cross-docking and wave picking can be deployed to save space.
- The geographical location of your warehouses should be planned using a lean inventory management system to ensure that with minimum wastage of resources, goals of reduced warehouse space and low transportation costs are achieved.
- Businesses should use inventory management software that integrates efficiently with third-party logistics carriers to optimize the complete shipping process.
- Automating your supply chain using inventory management software will improve your visibility of the entire inventory at all locations. This will help you keep exact records of all stock count and stock changes in real-time.
- Use techniques such as RFID, GPS, and barcode tagging to monitor and track the stock movement between warehouses.
Inventory management is an art that can only be mastered when you pay attention to all details and focus on the nuances of its process. While managing inventory for your business, it is very important to keep certain things in mind. Below is the list of essential things to know about inventory management:
1. Inventory value
Your inventory is a financial asset. You should know the value proposition that it offers clearly.
2. Inventory usage
You should know how much inventory is consumed, moved, and stored every year, every quarter, and every month. You should know in which months the usage is high and which events affect your inventory demands.
3. Inventory cycle
Businesses should clearly define their inventory cycle. Right from adding products to your inventory to shipping it, there is a cycle that is repeated every time. Knowing your inventory cycle helps you to manage inventory easily.
4. Inventory management components
You should know that inventory management is the sum total of various individually managed entities. One should separately understand the components and their efficient management to be able to manage the inventory. These are-
- Purchase Order management
- Warehouse management,
- Shipping and logistics management
- Product listing management
- Returns management
5. Stock Keeping Unit (SKU)
SKU plays an essential role in inventory management functions. It allows easy tracking of the Inventory, quick identification of the product with the minutest details, easy understanding of the product movements, minimizing the inventory shrinkage, knowing when to reorder stock, and in making an informed decision for efficient inventory management.
Problems faced by companies and e-retailers
Mispicking items from warehouse
Sometimes when orders are received in bulk, the warehouse employees are overburdened with Work. It may cause to increase the possibility of human errors. A very peculiar issue that most of the e-commerce companies face is that a wrong item was picked from the warehouse.
Overstocking(unreasonably high inventory)
Sometimes over-enthusiasm or faulty marketing research causes companies to stock unnecessarily high inventory. In such cases, it is difficult to get rid of the extra stock, and the business suffers financially. Even the new product launches might be halted, and new products won't get placed in warehouses due to limited space.
Under stocking(unreasonably low inventory)
The same errors that cause companies to overstock can cause them to understock too. In this case, companies are not in a position to fulfill orders, ship due to products, deliver on time, or even commit in full capacity for the supply of their finished goods to customers. This scenario is also known as backlog
Failure to track inventory properly in the warehouse
This occurs when the inventory is not placed properly in the warehouse. The organized warehouses are in a position to track their inventory quicker than the unorganized ones.
Failure to track inventory during the logistic process
Companies not using technologies such as RFID, GPS, barcodes, etc. often fail to track the exact position and location of their stocks during the logistics process.
Hassles on peak shopping days
There are times in a year when the demand for particular stocks is unusually high. This may be due to an event or hefty discount offered on that product that makes it attractive for buyers. In such cases, the warehouse sees a rush that often creates chaos for the warehouse employees.
This is the worst issue that companies face when they run out of stocks, and a backorder log is created that causes an increase in distresses customer calls at the customer support center.
If you are owning a dropshipping business, the inventory numbers are managed by your suppliers. Still, you need to keep a record of the inventory each supplier is possessing to sell flawlessly. Here, accuracy in inventory management becomes mandatory.
Problems faced by customers
Customers often complain about their items that were ordered by them did not reach them on time. The issues are mainly due to poor handling of the inventory on the part of the vendor.
Complicated Return Process
Goods returned by customers are again part of the inventory. The return process for goods ordered and delivered once is a very complicated one. Especially when businesses are not using any inventory management software to make things easy.
Receiving wrong items
Customers who order online often face this scenario. They end up receiving items they didn’t order. Wrong orders are delivered to them due to poor inventory control of the vendor.
Not being able to order
Technical glitches in the order process often frustrate the customer who is unable to order online due to technical glitches in the order form or other technical issues with the e-commerce portal.
You can infer from the previous sections that the biggest problems faced in inventory management, and the reason for all problems is poor and ineffective inventory management. Now, this leads to a series of negative effects on the company's business. The negative effects that we are talking about range from losing potential clients and missed sales to money loss due to tied up capital and high warehousing costs. The negative impact, in this case, will not be of a short term nature, but it will actually adversely affect the long term sustainability of the business.
The inventory metrics are the indicators that provide valuable insight into your operational performance as compared to your peers and the industry average.
This metric gives you information about whether you are holding a low inventory or high inventory. If the inventory turnover ratio is high, then you are holding less inventory than required, and if this ratio comes lower than you are holding more than the required inventory. It also suggests that your goods are not selling as required.
Customer Order Fill Rate
This metric in percentage form provides you the insight about the orders that are delivered on time to your customers. The ideal rate should be 100%. Below 100% means your customers who have ordered from you are not getting the deliveries.
Cost of Holding
The cost of holding inventory is a metric that defines the cost of holding a particular stock unit for a year. This cost takes into account the storage, warehousing costs, general security costs for taking care of such inventories, etc.
Average days to sell inventory
This is an essential metric to be kept in mind as it provides the firm an idea of how many days, on average, the inventory is taking to turn into a sale. This is important to find your cash conversion cycle, and based on it, only firms can commit about paying to its lenders and vendors, etc.
The Gross Margin Return on Investment is the amount of money that a company is earning per dollar spent on inventory. This is directly related to the performance and value of your inventory.
These metrics determine the average days it takes to ship the orders to your customers from the date of ordering. Usually, organizations strive to avoid a longer cycle time as it will cause inconvenience to their customers.
Supplier Quality Index
This metrics is used to calculate the accuracy and time taken for the orders delivered to your firm by suppliers. Suppliers that have a high rate of performance are the ones that are delivering you all products/raw material s on time, and you should not let them go.
The difference between the amount of inventory that is documented and the amount of inventory actually available in the warehouse is called Shrinkage. Higher Shrinkage may be an indication of your inventory being stolen or damaged by employees. It can also bring out supplier frauds.
Cost per Unit
This cost is calculated by dividing the overall expense incurred on inventory with a number of units available. This metric is very important to determine the selling cost per unit inventory.
Even small efforts taken to remove the bottlenecks of the inventory management system can save huge costs. For example, your business has a shipment capacity of 100 items per day, and you receive orders of 120 items on an average daily. The bottleneck is shipment. By studying and analyzing your inventory management process, you realized that if all order forms are not documented manually, then it will save enough time for two employees to ship 20 more of those items. You buy software that automatically documents all generated orders. Thus, you are saving costs via effective inventory management.
Use best inventory management practices such as cycle counting, drop shipping, multiple-warehouses, wave picking, third party integrations, cloud-based inventory system, rerouting for backorders or return orders, inventory forecasting, and deploying a complete inventory management software to save costs.
All businesses, whether small or large, require inventory management to gain progress and for sustainable development of their businesses. Industries, where inventory management is very crucial, include manufacturing industries, and e-commerce, retail, and real-estate. All startups and medium-sized businesses where there is a significant amount of order inflow should use a clearly defined and strategic inventory management system.
An inventory management software is an application or software suite that assists organizations in managing, tracking, organizing, and optimize their inventory on different levels. It creates a central database to monitor inventory and generate reports to forecast the demand for stocks. Whatever models and systems business is using for their inventory management needs, the inventory management software can help to find inaccuracies and inefficiencies in their models, processes, and the overall inventory system.
Businesses often may be reluctant to invest in inventory software due to a lack of perception or presence of false perception. Most businesses might drop the idea of investing in inventory management software, perceiving it to be an unnecessary expense and unwanted burden on their finances. Some also have reservations about the transition from a manual to an automated system due to the conservative policy of their business. Sometimes businesses just ignore the rationality of investing in technology. However, if businesses try to focus on the pragmatic approach towards their business and evaluate the return on investment on such technologies then perhaps they can make a wiser decision by themselves and understand that investing in an inventory management system was the most prudent decision they ever made for the growth of their business.
Accuracy is the need of the hour for modern businesses. The scale at which they transit their inventory through various levels and locations makes it difficult for them to get everything right by working with papers and documents. They need technical assistance to enhance their inventory management capabilities and gaining improved supplier and customer relationships.
With reliable inventory management software, businesses save costs on redundant stocks, dead stocks, or excessive stocks as the inventory management software would prevent all these conditions from happening. It will increase productivity and decrease employee costs by saving time due to automation. The speed and accuracy of the whole inventory value chain will increase, storage costs will decrease, and businesses will see a positive surge in their operational performance.
Real-time inventory synchronization
This feature updates all the transactions related to inventory in real-time. As and when the customer orders a product from your website, the software will update it in all necessary places in real-time. This helps in avoiding double-ordering of the same product. The software is also synchronized with the logistics database so that a change in place of an inventory's location will also be updated wherever necessary.
Automation of all e-commerce activities related to inventory
This feature provides time-based inbuilt and custom triggers that can take care of the order and shipment process automatically. Various functions such as splitting an order, confirmation, and follow up emails to customers, order tags, etc. get automatically executed.
Features to manage warehouses will optimize the inventory holding costs. Automated features will reduce the load on the warehouse. This feature provides low inventory alerts, import, and export product information, automated stock picking using the FIFO principle, and warehouse and inventory reports. This also lets users add and manage more than one warehouse.
Integration with other channels and web-based services
This software integrates with other popular channels such as Amazon FBA, and other cloud-based or web-based services.
Security and Backups
Inventory management software must provide a secure environment for all transactions. It should also be able to take a backup of all data in secured cloud databases that are accessible to users remotely.
Most of the software is good to use unless they have to deal with multiple orders at the same time. Software that is able to handle multiple orders on multiple channels and devices is required. So, as your business grows and your customer base grows, the software should also scale past its limits.
Accessible on all devices
Today businesses run 24 by 7. To catch up with the need of the hour, business people work on their desktops, laptops, tablets, or even mobile phones to deliver their customers a seamless experience. Inventory management software should be able to work on all devices, and it should have a mobile-friendly light version.
The software should be user-friendly, intuitive, and easy to navigate. It should not annoy the user with its unnecessary complexity.
Reliable customer support
Inventory management software has multiple features and might require users to contact the vendors for technical support. Reliable, prompt, and helpful customer support is a must feature for inventory management software.
Deactivate a product
This will deactivate a product that is not available with the seller or is temporarily out of stock. This feature prevents the scenario of placing an order by a customer for a product that is out of stock.
Bulk changes in the price
This feature allows sellers to change the prices of multiple listed items on their e-commerce site by just one click.
Purchase order form, returns, payments, invoice generation, order editing, pricing, and backorders
The inventory management system paired with the barcode scanner, RFID, and other wireless equipment help in identifying the products and maintain accuracy. A perfect barcode inventory system with the right combination of software and hardware can eliminate issues arising due to mismanagement of the inventory in the organization.
Product categorization means that the software creates multiple labels.
This feature provides real-time updates of your inventory and synchronizes all information from your multiple warehouses.
Grouping of Inventory
It is easy to find, manage, and locate inventory if it is categorized and classified in groups. This feature helps in finding similar traits in stocks and then groups them under one label.
If you are offline and some client places an order for your stock, then this feature allows you to accept that order in offline mode. When you come back online again, the order is updated on your server.
The software should be able to forecast the demand for all products individually based on the available historical data, current business, and future prospectus.
This feature enables users to manage their suppliers. It provides the list of all suppliers in one click. It records all the transactions that you are done with particular suppliers. It keeps track of the nearest and cheapest available supplier for your next refill of inventory.
Analytics and Reports
The software should provide a detailed analysis of the inventory metrics and present varied reports about all important aspects of the inventory.
The costs of inventory management software depend on a large number of factors such as:
- Whether it is a cloud-based system or not
- Features it offers
- Number of users and admins it allows
- The quality of service offered
- The interface and experience it provides to the users
- The kind of profitability it generates for clients when deployed
These variations can change the approximate costs and estimations of the software, by 100% to 200% or 500%. The SaaS-based products may range from low cost to extremely costly ones depending upon the scalability and number of orders it can process.
The most advanced and complete features enabled software will cost you around $250 per month on an average.
We have come to this figure by analyzing the average costs of the top inventory management software that are listed on the GoodFirms page. For example, the popular software like Tradegecko will cost around $199 (order limited to 1000 per month) for full plan for small businesses, Orderhive’s business growth plan will cost you around $269 ( unlimited orders) and Zoho inventory’s professional plan will cost you around $ 206 per month (online orders limited to 30K per month).
Companies that were reluctant to switch from their legacy systems are now changing their policies. They are investing in the software, and this, coupled with the growing popularity and acceptance of e-commerce, will be a game-changer for the inventory management software industry.
According to the best available research in the field of Inventory Management software field, the Global Inventory management Software market size is likely to be around USD $3 Billion in 2024, led by a steady growth of 6% CAGR from the current times.
Inventory management software is a one-time investment that you would do to let your business scale in a positive trajectory. The article has almost discussed everything you need to know about inventory management and the technological needs that inventory management requires. Still, to sum up, the below things should be kept in mind before venturing to buy inventory management software for your business:
1. Your business goals and the requirements
You need to know what kinds of features you would require for the smooth functioning of your inventory process. If the software doesn't provide the features that you need, then it is useless to buy it no matter even if it has millions of other features.
2. Cost of the software:
It is important to rationally choose software after analyzing the cost that you would pay for software and comparing it with the kind of profitability you will achieve after its deployment.
Suppose your products are listed on Amazon, and you require to keep a record of all your listed stocks in real-time, then you should first cross-check with the software vendor that the inventory management software can integrate with Amazon or not? If the answer is negative, then there is no reason you would buy the software.
4. Flexibility and customization
The software should be able to scale with your growing business, and it should be able to provide you with customized options as per your needs.
5. Customer Support
As inventory management software are also as complicated as the inventory management process as a whole, you would always require the prompt and expert advice from your software vendor. Look for someone who has a reputation for providing excellent customer services. Read reviews and feedback from other customers before initiating a purchase.
Free and open-source inventory management can prove to be a game-changer for your business. It is totally free to use, so you don’t have to worry about any extra costs before deploying it for your inventory management needs. With no investment, the Return on Investment will always be positive. A lot of free and open-source inventory management software provides the same services and features as the paid ones. With an open-source alternative, you can also customize features and add plugins as and when needed by you.
As cloud inventory management software is not dependent on hardware requirements, it is easily scalable. The cloud-based management is more trustworthy than the on-premise software. It can do real-time and remote inventory management. The cost of cloud-based inventory management software is comparatively lower than the on-premise ones.
Artificial Intelligence is set to change inventory management and take it to the next level.
Companies are using artificial intelligence to determine and forecast the accurate level of inventories required for their businesses. In future artificial intelligence may become so strong that it will be accurately able to forecast everything about inventories.
Warehousing by automation and robotic technology
Self-driving vehicles and pickup bots are already in existence. Companies like Amazon are targeting human-free warehouses, where everything is automated. This will be a game-changer if adopted at a global level. This will reduce errors and inaccuracies and would speed up the inventory process like never before.
Amazing ordering experience for the customer through customized micro-applications
Applications and software suites are improving every day. With customer requirements and demands, the software companies that provide applications to ease the business processes like inventory management adding innovative elements and new features to the existing ones. There will be a time when companies would be able to track even the minute details about their inventories with the help of these applications and software.
Machine learning to forecast the demand for inventory
Machine learning algorithms can analyze past data to forecast future demand for a particular inventory. The progress in the field of machine learning as a subset of artificial intelligence is surely going to benefit the overall field of inventory management.
GoodFirms researches all software with a focus on the quality, reliability, and the ability of the software. With above 15K unbiased reviews from verified customers and listing of over 9000 services and software, GoodFirms stands as the most reliable source that provides readers with the list of in providing you the list of top inventory management software. GoodFirms has listed the top inventory management software after carefully analyzing their features and prices. It further categorizes them based on their features. Filter options are available to find a sorted list of software based on pricing models, deployment criteria, devices supported, support available, business size type, and available resources. If inventory management is totally unknown territory for you then GoodFirms’ insight will surely prove helpful for you to trail through this. GoodFirms' insights are grounded in effective surveys of the software leaders worldwide, stringent analysis, and the shared reviews of the users.