5 Best Inventory Management Tools for Accurate Product Inventory
Last updated on May 17th, 2022 at 04:47 pm
Each year, retailers worldwide lose a monstrous $1.75 trillion due to the cost of out-of-stocks, overstocks, and excessive returns.
Inventory management plays a vital role in the success of a retail business, especially in ecommerce.
While product shortages are unwanted, excess inventory is an equally undesirable scenario. Therefore, it’s essential to find balance. Inventory management tools are an excellent way to compile detailed product information and inventory availability.
There are a variety of tools out there to streamline inventory management initiatives. Keep reading to learn what they are and how they can help.
Inventory Management Tools for Accurate Inventory Control
Inventory management is the process of managing inventory to ensure that it’s in the right place, at the right time, and in the right quantity. When you master inventory management, you can decrease unnecessary expenses while increasing productivity.
Let’s take a look at some of the best tools designed for this purpose—most of which you can find entwined in a modern inventory management system.
An inventory management system will allow you to create reports filled with data that is pulled from the system’s database. These reports consist of all of the pertinent data necessary. Examples of types of reports you can export include:
- Sales reports
- Inventory reports
- Purchasing reports
While most systems provide standardized reports, you can modify most of them to suit your needs. They can be personalized for your business to display the specific information you require to make business decisions.
You can leverage these reports to determine optimum inventory levels down to the SKU level by analyzing information such as:
- Sales history by a specific customer
- Inventory analysis by product
- Inventory reorder reports listing all items needing to be reordered
- Inventory information by serial or lot number
When you have these detailed reports, you view comprehensive product and sales information in one place. Compared to manually looking up and compiling data, this is an effort and time-saving alternative. Also, the potential for error is greatly reduced because these reports collect this information automatically rather than relying on manual methods.
Inventory Management Tools in Dashboards
Most inventory management systems have dashboards, which are an onscreen display of pertinent information. The data displayed has been pulled from the system’s database and you can customize what information is shown on your screen.
Dashboards can display information in a variety of ways. For example, a small business owner can customize a dashboard to display inventory levels per location, monthly sales information, and more.
A warehouse manager could use theirs to display orders that are scheduled to be received, outgoing orders, and current inventory levels.
Dashboards, like reports, collect and display information in a variety of ways, saving time and effort, while increasing accuracy.
Another helpful tool is the ability to integrate with other systems that you use to manage your business, including accounting software, EDI, ecommerce platforms, and more.
System integrations will differ depending on the tools your business uses. Several systems may be compatible, including:
- 3PL and/or EDI integration
- Ecommerce platform integration
- Marketplace integration
- Accounting software integration
- Reporting software integration
With this level of integration, you can see inventory quantities across channels (ecommerce stores, brick-and-mortar stores, marketplace platforms, etc.) and locations. Then, you can examine inventory with precision by warehouse location, product, and more.
When you have a birds-eye view of your inventory levels across your organization, you’ll be better able to carry out sales, purchasing, and inventory decisions.
It’s possible to set alerts to let you and your team know when inventory dips below a specific quantity. Once your team receives the alert, you can start to refill stock before you run out.
It’s possible to set a reorder limit for each SKU your business has, making this a magic tool for the manufacturing, logistics, and retail industries.
An inventory management system is able to send these alerts because it can see the quantity of each product—no matter which location it’s being stored in.
To set your reorder alert, you can use previous sales history and expected demand to determine the amount of safety stock you need for each item. The benefits include:
- Reduction in manual efforts to look up inventory levels
- Reduction in time spent looking up inventory levels and purchasing product
- Increased accuracy of inventory information through automation
Some systems allow you to integrate with other systems to generate purchase orders stemming from the reorder alerts. This way, it’s easy to know when a product is low and you can reorder the products right away.
Then, your inventory quantity is quickly restored and you have a greater inventory control measure in place.
A barcoding system combines hardware and software to allow you to scan, assign, and manage barcodes in your warehouse.
Barcode scanners and label printers are the hardware, while the software is the system that manages inventory information through barcodes. These solutions can be used together to:
- Conduct accurate inventory
- Adjust inventory counts
- Verify inventory levels
The benefits of using a barcode scanning tool are speed, ease, and accuracy. For example, conducting an inventory count by using a scanner is quicker, easier, and more accurate than doing so manually.
Finding a Solution With the Right Inventory Management Tools
Now you know about the benefits of inventory management tools such as dashboards, reports, reorder alerts, barcoding systems, and system integrations.
There’s a multitude of similar tools embedded into today’s inventory management software. You’ll find even more dynamic features to help with accurate inventory control.
If you’re looking for a feature-rich solution for managing inventory across suppliers, warehouses, and channels, talk with an expert today.