There is nothing more disappointing for customers than trying to buy an item they want and finding out that it is out of stock. This not only means a lost sale for the company, but potentially a loss of customer loyalty . It is therefore crucial for business owners to know at all times which items are available, which are selling well and when reorders are necessary.
That’s where inventory management software comes in, replacing time-consuming and unreliable analog records. Learn more about what inventory software is, the different types available, and which programs are good for getting started.
What is inventory software?
Inventory software is an application that provides a central database for storing information about a company’s inventory and automates tasks related to inventory management. It can be used to manage and track inventory levels, new zealand email list orders, sales, and other related processes.
Benefits of Inventory Software
Companies of all sizes and industries use software to manage their inventory. The benefits of such a solution include:
- Improved accuracy and ease of use: Before the age of computers, inventory was managed manually. Companies filled out purchase orders, 4 ways to prepare your business for the future suppliers issued paper receipts, and purchases and inventory were documented on paper. However, manual entry is time-consuming and prone to errors. Inventory software digitizes this process, improves accuracy, and allows companies to keep records more easily and run more efficiently.
- Integration: A software solution allows inventory data to be integrated with other systems, such as accounting software . This reduces data entry errors – by minimizing duplicate and manual data entry – and centralizes important information.
- Improved efficiency: Inventory software helps place orders only when inventory is low. This prevents the problem of excess inventory that could expire or go unsold and reduces the risk of stockouts or overstocks.
- Cost savings: Accurate inventory tracking can help your business save on inventory purchases and costs. You only buy goods that you are reasonably sure will sell and avoid over-ordering. Automated systems can also reduce the amount of labor required to enter inventory information, burkina faso leads potentially reducing labor costs.
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3 Types of Inventory Software
Before choosing an inventory software, you should consider what strategy you want to pursue for inventory management. Common approaches include:
- just-in-time (JIT) management
- bulk orders
- Permanent and periodic strategies
1. Just-in-time (JIT) management
JIT inventory management is a strategy that involves ordering goods only when needed to meet customer demand. This reduces the amount of inventory that must be held on hand, which lowers costs and minimizes storage overhead. However, a JIT system can reach its limits when there is unexpectedly high demand or unforeseen changes in the supply chain.
2. Bulk orders
Unlike the JIT approach, bulk ordering means ordering goods in large quantities and keeping them in the warehouse to meet future orders. This method can save costs because large quantities of goods can be moved at once, reducing transportation costs per unit. However, it also carries the risk of overordering and excess inventory.
3. Permanent and periodic strategies
Unlike the JIT approach, perpetual inventory software updates its data continuously, providing real-time insights. These systems are typically more expensive and require more user interaction. Periodic inventory software, on the other hand, catalogs inventory within a set time frame (e.g., monthly or quarterly). They are less expensive but often provide less current inventory data.
There are different software solutions for each type of inventory software. For example, JIT inventory management software is different from bulk order or perpetual and periodic systems. Although it is possible to combine different software solutions, this is not always practical or efficient, as incompatibilities can arise that cause integration problems.