Inventory Management Software: 10 Things to Know Before Investing in an Inventory System

Find the stock and inventory management software that meets your organization's needs can be a task. There are so many systems out there that you have to choose from and not all of them deliver what they claim. As a result of this, there are many questions you need to ask internally and to potential suppliers when looking for the right inventory system. The reason for this is because you will be evaluating complete solutions: mobile apps, support, hardware, software, and so on. You can't just test a few tries and settle on one system. An inventory system is a long-term investment and you should make the best choice the first time.

Choosing the right system doesn't have to be intimidating. While there are some key differences between industry usage and company size, the pain points for inventory management systems are largely the same. The questions below will help you choose the best inventory system solution for your business.

1. What are your industry-specific requirements?

Before choosing a system, you need to compile a list of specific inventory-related patterns that affect your business. This list will allow you to determine the exact functionalities that the ideal inventory management software should have to meet your needs. Does the regulatory system comply with defined industry standards?

2. What is the system deployment model?

Is the system in the cloud or on premises? Both options have their pros and cons. It will depend on your specific needs. On-premises deployment offers greater customization in your wholesale management system. However, for many organizations today, cloud systems make more sense. The reason for this is because your data will be safer as it will be backed up online in the cloud and not stored locally where tampering could include it. Cloud-based systems can be accessed from anywhere and not necessarily within your company. They are robust and scalable.

3. How is the price based?

When reviewing the price, you should consider the implementation fee and the monthly fee. You should also know whether the price is based on total users, concurrent users, or total installs. Getting quotes from different suppliers will help you find a package that suits your business.

4. What integration do you need?

Inventory management software must integrate with all of your systems. This could be your customer relationship management software, enterprise resource planning and accounting and so on. Choosing a system that integrates seamlessly will increase visibility and efficiency.

5. What is the tracking mechanism?

Tracking your inventory is important. It can be tracked using methods such as batch control, kitting, serialization and barcodes and so on. Know which method will be best for you and make sure the system supports it.

6. What are the security features like?

The ideal system should have a good firewall and back up your data online.

7. Does it have built-in reporting features?

The system must provide integrated reporting as well as reporting options. You should be able to report inventory transactions, counts, history, and so on.

8. Do you need multiple currencies or multiple locations?

If you need to track inventory across multiple locations and in multiple currencies, make sure your system offers this capability. The system must be able to convert currencies to your base currency for reporting.

9. How many people will use it?

If you want all employees to access the inventory management software, make sure there are no limits on the number of users. The software should also allow delegation so you can limit access to specific users.

10. What is the technical support and training like?

Choose a system where the provider includes implementation, support, and training. This will save your money.

4 questions to ask yourself before investing in a system

Finding the right inventory management system depends on several factors and usually involves a closer look at your business as it is now. The following are four of the best questions to ask when deciding on inventory management apps and software, and your broader inventory management techniques, as your answers can provide clarity and better direction moving forward.

1. What are your business challenges?

A good place to start determining which program is right for you is to assess your business needs and challenges. Have you outgrown an outdated inventory management or enterprise resource planning system, or is your small business growing more slowly than expected?

Are inventory levels inconsistent across your sales channels, or perhaps you are running out of stock faster than you expected? Do you have the ability to track inventory KPIs to meet your goals, or do you need to improve your tracking to know where units are at a given point?

Thinking about questions related to your current challenges will help you pinpoint your pain points and evaluate the functionality your inventory management software should have.

2. Do you need server-based or cloud-based inventory management?

While cloud deployment has been reliable for years, many companies continue to purchase on-premises server-based management systems. When looking for a new inventory management program to implement, it's important to consider whether you would benefit more from a server-based or cloud-based inventory management system. 

Do you want to own your software and server on-premises, or do you prefer cloud-based software to avoid large capital expenditures? It's a good idea to evaluate your options along with your specific needs so you can make an informed decision about which option is right for you. 

3. What are your inventory management policies?

Your inventory control policy determines how your products move, how you track costs, and how to avoid losses or shortages. A clearly defined policy (e.g. FIFO: first in, first out) can maximize the efficiency of your supply chain and fulfillment processes, so if yours hasn't adapted in conjunction with your company's growth, a update may be required. 

Being aware of product cost, lead time, handling requirements, and other policy needs will help you decide which inventory management software is best suited for your business. 

4. What additional resources do you need to run your business?

The right software should fit your budget and do what you need, which means you should evaluate it for scalability, capacity, and quality (as well as price). This is also why it's so important to figure out what additional resources you need to run your business.

Do you need to track inventory using batch control, RFID tags, serialization or barcodes? Or does your industry have specific requirements you must meet? Will your team use mobile devices to scan barcodes? Maybe you need real-time visibility into your product availability or comprehensive reporting on your inventory from warehouses or wholesalers?

Be sure to confirm what tracking methods and level of data can be captured in an inventory management system before purchasing, as the right software can maximize your ROI and facilitate more rewarding relationships with your employees, customers, and distributors. 

Inventory Management Systems for 3PLs

Third-party logistics (3PL) providers play a crucial role in the supply chain, providing warehousing, transportation, and value-added services to businesses. With the ever-evolving logistics landscape and expanding e-commerce, it is vital that 3PL owners and professionals invest in the right inventory management system to meet their customers' demands and remain competitive.

Efficiency for 3PL Providers

Efficient inventory management is crucial for 3PL providers as they handle goods from multiple customers with varying requirements. An effective inventory management system allows 3PLs to streamline their operations, reduce human errors, and optimize warehouse space. It provides real-time data on inventory levels and locations, enabling businesses to make informed decisions, reduce costs and improve customer satisfaction.

Benefits for 3PLs

One of the main benefits of inventory management systems for 3PLs is the ability to integrate with other software and systems. Integration with transportation management systems (TMS), warehouse management systems (WMS), and enterprise resource planning (ERP) platforms enables data sharing and seamless communication across multiple operations. This connectivity helps reduce data entry errors, improving inventory accuracy and minimizing delays in order processing.

Selecting an Inventory Management System

An important feature to consider when selecting an inventory management system for 3PLs is scalability. As a 3PL provider grows and expands its services, the system chosen must be able to adapt to changing business needs without requiring significant investments in upgrades or additional infrastructure. This adaptability allows 3PLs to better serve their customers and respond quickly to market fluctuations.

Customization is also an important aspect of inventory management systems for 3PLs. Each provider has unique operational requirements and a one-size-fits-all approach may not provide the desired results. An inventory management system that offers flexible customization options ensures that 3PLs can tailor the software to meet their specific needs, helping them optimize their processes and deliver exceptional service to their customers.

Choosing the Right System for Your 3PL

Investing in an inventory management system that meets the needs of 3PL providers is crucial to their success. The right system can help streamline operations, reduce errors, optimize warehouse space and improve customer satisfaction. When selecting an inventory management system, 3PLs should consider integration features, scalability, and customization options, such as those offered by Extensiv 3PL Warehouse Manager. 

With the right inventory management system, 3PLs can realize significant benefits and remain competitive in the ever-evolving logistics landscape.

8 Features to Look for When Choosing a System

Finding the best inventory management system for your business is a big task, but if you know what to look for, you'll be better prepared than most. Take your time and be strategic with your decision, and don't forget to keep these features in mind during your search.

1. Inventory Tracking

To implement an inventory control system, you must be able to track the status of raw materials and finished goods within the supply chain. With the help of eCommerce inventory management systems, you can apply automation to your inventory tracking and eliminate the need to manually complete tedious and time-consuming tasks. For example, many systems automatically generate tracking numbers when they create a receipt or invoice, saving valuable minutes and mental energy to be used elsewhere.

And thanks to automated tracking, you can also enjoy better engagement with your customers by promptly sharing what's in stock or offering updates when products ship.

2. Inventory barcode

Writing or entering SKUs manually can be tedious, which is part of the reason barcoding is such a popular method for managing and controlling inventory. Barcode scanning not only puts an end to data errors commonly experienced with manual entry, but also automates functions that require communication with other parts of the inventory management system. 

When you collect, store and organize your data digitally, it makes inventory operations much more cohesive. With the help of barcode scanners, you can instantly improve inventory accuracy, speed up stock replenishment, and enable paperless documentation of your work.

3. Analysis

Analytics plays a significant role in understanding business performance and customer habits. But beyond simply collecting data, inventory management solutions need to present information in a tangible and practical way. After all, what's the use of having data that you can't understand or leverage to your advantage?

Many inventory management systems offer pre-built reports to provide the essential metrics you need, while others can really take things a step further by allowing you to customize reports so you can really dig into the insights unique to your business.

4. Perpetual updates

Perpetual updates to an order management system mean that the program is constantly updated with the latest information. In other words, stock counts are live and indicate what is in stock at any given time. 

The alternative to this approach is periodic updates, in which inventory takes occur at specific intervals (daily, weekly, monthly). Because these numbers only reveal what was in stock when the count was completed, perpetual updates are often preferred. Having real-time inventory counts ensures that out-of-stock items cannot be ordered and allows you to monitor your raw material levels so you can reorder just-in-time to meet customer demand.

5. Integrations

You are likely using multiple management tools to run your business. Ideally, your inventory should be connected to each of the backend applications you use; If these platforms are not integrated, you will end up manually entering data (causing serious delays).

Inventory management systems are commonly integrated with warehouse management, accounting software, and purchasing systems. When these various applications can communicate with each other through integration, the more streamlined your supply chain becomes and, as a result, the more time and money you will save.

6. Usability

While cost will certainly affect your purchasing decisions, don't underestimate the importance of ease of use. This point is often ignored by business owners and yet the usability of inventory management software determines the effectiveness of the entire system.

For example, if it's going to take your team hours on end to learn the program, it's probably not a good investment on your part. You are looking for a solution that simplifies your processes, not further complicates them. If the learning curve is too high, it is likely to cost you time, money and energy, both in the short and long term.

7. Affordable Support

Once you figure out which inventory management system to use, having access to quality customer support is vital to your success with this software. When you run into a situation where you can't find your purchase transactions or your team doesn't know how to set up inventory notifications, having someone available to help is critical. 

Without accessible customer support, your issues may remain unresolved and lead to an unfortunate supply chain management bottleneck. For this reason, make sure you receive full support from your vendor, including training, warranty, and 24/7 assistance.

8. Designed to grow

When deciding on an inventory management system, you may not have unlimited cash flow to allocate to this software. You want to find a system that is highly functional and on budget, but you should also look for one that is designed for the future. 

While you can't afford a ton of extra features now, you still want something you can upgrade later while executing smart, scalable growth. Look for software that meets your needs as they are today, but can expand and move toward greater optimization in the future, just as you expect your business to do.

Conclusion

The bottom line is that many business owners wait until they encounter lost, lost, or damaged products before they consider investing in software solutions. Inventory management systems are designed to help businesses of all sizes automate their processes and improve their operational efficiency at all levels.

Thanks to automation, human errors are greatly reduced (and sometimes completely eliminated). And the meaning of this is far-reaching, from better profit margins to greater customer retention, fewer out-of-stocks and more. Inventory management systems really are the number one way to save countless hours and avoid overspending so you can focus more on your customers and dream of even bigger goals.

Inventory Management System FAQ

What are the types of inventory management systems?

There are a few different types of inventory management systems you can choose from. Perpetual and periodic systems differ in how often their inventory data is updated. Manual systems may be a little simpler to operate, but automated systems have much greater accuracy. Finally, a server-based system keeps its software and server on-premises, while cloud-based systems store information in an online database accessible from anywhere.

What is the best inventory management system?

The best inventory management system is one that meets your business needs at every stage of the supply chain. That said, Skubana continues to be an industry leader, empowering businesses of all sizes by integrating their products, fulfillment centers, and sales channels into one integrated platform. With Skubana's inventory management solutions, businesses can gain clarity across channels, manage real-time inventory counts, and accelerate the fulfillment process with ease.

How much do inventory management systems cost?

The price of inventory management systems can differ greatly depending on what features you want, how customizable you would like the software to be, and so on. Some systems offer a limited-time free trial of their paid versions, while others start at just $$ 20 per month. More expensive programs can charge several hundred (or even a few thousand) dollars to use their services.