Inventory management holds an important position in running the business efficiently and with changing times and trends, the process is also witnessing a huge revolution. Instead of using traditional tools such as spreadsheets and punch cards that are prone to errors, business owners have switched to smart solutions like inventory management software.
Inventory management software solutions are pretty helpful in addressing some of the core challenges of inventory management, such as overstocking, low production rate, poor product quality, low productivity, etc.
The evolving market, growing customer needs, and a demand for real-time management of inventories have further created a need for advanced inventory management software. As per one of the reports, the global inventory management software market size is estimated to grow from $2651.1 million in 2022 to $4601.2 million in 2028.
What is Inventory management?
Inventory management is a systematic process or approach to managing the company’s inventory. It is a part of supply chain management and involves activities such as storing goods, inspecting the stock, and replenishing the stock. The main objective of inventory management is to reduce the dead stock and facilitate a smooth flow of inventory to meet the customer demand on time. The benefits of inventory management are – that it saves money, provides better customer service, improves cash flow, and maintains the quality of goods or services.
The four types of inventory managed by organizations include,
- Raw Material
- Finished goods
- Work in progress (goods are in progress but not ready for sale)
- Maintenance, repair, and operations (goods needed to continue the production)
What Is the Significance of Inventory Management Software?
The manual inventory management process is a labor-intensive and tedious task. A small error in inventory management can disrupt the entire supply chain and affect the timely release of goods into the market. It could disappoint the customers and eventually bring revenue loss to the company. It is extremely difficult to monitor the inventory manually for a company that operates at multiple locations. Besides, that mismanagement of inventory can increase costs and affect the business’s reputation.
These challenges can be mitigated with the help of inventory management software. It provides a centralized system to manage the inventory and helps business owners or managers to monitor inventory in real-time. It automates the stock replenishing process and orders it as per the demand. Data analytics, inventory tracking, vendor management, cycle counting, etc., are some features of inventory management software that facilitate managing inventory efficiently.
Inventory Management Software – Trends and Outlook
- Cloud-based inventory management software:
Cloud-based inventory management software reduces the costs of in-house maintenance and can be accessed from anywhere. It provides real-time visibility of the inventories regardless of location and across multiple nodes of the supply chain. Cloud inventory management software offers flexible pricing models (subscription-based model); hence enterprises from large to small can settle with the software that best suits their budget. Users’ inclination to the cloud is natural considering its incredible benefits, and experts anticipate its proliferation as technology improves further.
- Mobile apps:
Inventory management software supported by mobile apps allows managers to manage inventories on the go. It saves a lot of time since they don’t have to run to the workstation to access the data. Further, it keeps managers informed about all the movements in the inventory through alerts and notifications. Managers can take action right from the mobile and ensure that the business continues its regular operations.
- Predictive analytics and artificial intelligence:
Predictive analytics and artificial intelligence are proving to be effective in augmenting the inventory management process. Advanced inventory management software with AI and predictive analytics analyzes the sales patterns. Based on that, the software accurately predicts how much stock is required and when to stock. It continuously monitors necessary parameters such as cycle times, quantities, temperature, errors, etc., without any human intervention. It reduces inventory wastage significantly and improves asset life.
One area where AI is pretty useful in inventory management is placing inventory in a designated area. As soon as the new shipments arrive at the store, the AI matches them to the current location. It helps employees to place the shipments in the right place and search easily when needed. AI and predictive analytics embedded with inventory management software can streamline the entire supply chain management. It gives in-depth information about the goods (raw, finished, semi-finished) in the supply chain. Also, it makes sure that suppliers deliver goods in a timely manner and identifies the supplier that regularly fails in delivering the goods
- QR-code-based inventory management software:
QR-code accommodates more data than barcodes, and it is becoming more popular in inventory management software. To operate a QR-code inventory management system, employees do not require technical knowledge or skills, and despite that, it is more effective and less prone to errors. The advantage of using QR for inventory management is that it can add additional info such as asset photos and GPS location. With this information, employees can quickly locate the inventory and save time. Besides that QR-code-based inventory management software can be connected to the cloud. It means they can scale software whenever they need to.
- 3PL Integration:
E-commerce platforms have given entrepreneurs access to a huge customer base. However, they need a storage space to manage inventories and fulfill the customers’ orders in time. However, not all entrepreneurs have dedicated space to store and manage inventories. They largely depend on 3PL (third-party logistics) to handle their inventories. The third-party logistics takes complete responsibility for picking, packing, and shipping the product. Based on their requirements, entrepreneurs either rely partially or entirely on 3PL for managing their inventories. With the rise in online business trends, the inventory management software integrated with 3PL can add value to the business. In the coming days, the inventory management software that supports more numbers of 3PL providers could be more in demand.
Every transaction in the blockchain is irreversible; it means the chance of fraud is the bare minimum. Besides that, the decentralized nature of blockchain gives more transparency to inventory management. The inventory management process is lengthy and involves many intermediaries such as suppliers, 3PL, shippers, etc. It is difficult to access data produced by each of these parties in real-time and respond to it. With blockchain technology, the transaction is validated and non-repudiation, so there is no room for confusion between the intermediaries. For companies looking for an inventory management system for better connectivity, transparency, and accountability blockchain-based inventory management software can be an ideal option. The innovative blockchain technology can help business owners to simplify the process of managing inventories.
For business consistency, it is critical to managing the inventory efficiently. Inventory management is a multi-step process that requires higher precision and control to facilitate the seamless flow of inventory throughout the business process. In addition to that, while managing inventory few elements are crucial such as inventory management costs, product quality, forecasting demand, maintaining stock level, etc. It requires a robust inventory management system to manage everything, and inventory management software is the right way to deal with it. However, modern businesses are evolving faster, and to resonate with them, business owners have to tap on some latest technologies and trends in inventory management software.
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