Benefits of an Inventory Management System
An inventory management system is software that helps track a company’s inventory and sales.
This system supports employees by providing accurate inventory numbers and keeping products organised. It helps a company manage its stock, fill orders, and track overall production or sales.
Using an electronic inventory management system requires minimal training and can help make inventory management more efficient.
Using an inventory management system has many benefits for small businesses or large retail or warehouse operations, including:
1. More Accurate Inventory
Inventory management systems help businesses fill orders and track products. These systems monitor each product that enters and exits the company during production, storage, and sales.
Many inventory management systems are also point-of-sale systems, meaning they can process payments and sales, or they can integrate with existing point-of-sale systems.
Businesses with more accurate inventory might reduce internal inventory management costs and establish better relationships with customers and partners.
2. Reduced Costs
Inventory management systems help reduce company costs by preventing overstocking. When a company has an accurate account of its inventory, it can guarantee sales orders for customers and prevent backorders.
Overstocking can create unexpected costs because companies often keep their inventory in rented or leased storage space. If it takes months or weeks to clear out the excess inventory, the storage space creates greater costs.
Other costs of stocking inventory you could reduce with an inventory management system include employee wages, insurance, and transportation.
3. Greater Automation
Automation occurs when businesses use software to make certain processes automatic. With inventory management software, businesses can automate the process to reduce errors, minimise labour costs, and produce more accurate stock counts.
Automation reduces a company’s dependence on human labour and makes the inventory management process more efficient in the long term.
4. Greater Productivity
Businesses that use inventory management software can experience higher production rates. With fewer inventory errors to address, companies can focus on producing higher-quality products at faster rates.
The business can then reallocate labour hours to other tasks to improve the business and make production more efficient. For example, a company can use inventory management software to reduce the number of inventory management personnel on payroll and save on labour costs.
This ensures companies are optimising their workforce.
5. Greater Organisation
Inventory management systems help businesses create better organisational systems for inventory.
They allow employees to categorise products by size, shape, name, or any other useful parameters. Organised inventory can help the business fill orders more quickly and accurately, as well as keep track of products simply and effectively.
For example, an inventory management system can help a car manufacturer organise each piece of machinery by name and batch number. This helps the material-handling personnel find the correct items quickly and allows the company to track each component from the delivery truck to the final product.
This can also reduce liability if there’s a recall, as every material or product in the system is trackable.
6. Improved Customer Experience
An organised and accurate inventory system can help improve the customer experience. Companies can provide faster, more reliable shipping and restocking times, resulting in more satisfied customers.
Customers will trust the company to have what they need when they need it, which can help the business retain customers and earn repeat business.
With an inventory management system, companies can also offer real-time inventory information, making it easier for you to track what is happening and when.
If you are looking for a way to improve your business’s inventory management, consider investing in an inventory management system.
With the right system in place, you can ensure that you always have the right amount of inventory on hand to meet customer demand, while also reducing costs and improving efficiency.
To find out more about how MPX can help you, book a demo call here.