Skip to main content

What is an inventory management system?

 


An inventory management system (or inventory system) is the process by which you keep track of your products throughout your entire supply chain, from purchase to production to final sales. It governs how you approach inventory management for your business.

Each company will manage stocks in a unique way, depending on the nature and size of their business. Let's take a look at a simple example.

Inventory management system example

Carlos starts a business selling food baskets. He has several suppliers that sell him food in bulk, some of which must be divided and repackaged.

Carlos creates an Excel spreadsheet, which he updates each time he asks for more shares, builds a basket, or completes a sale. This is his inventory management system, and it is completely up to him to know how much stock he currently has, when food products can expire from him, how many baskets he can sell, and more.

Why you need an inventory system

Any company managing stocks will need a system to accurately track and control them. Without one, he will be working entirely on an ad-hoc basis, and he will quickly run into situations where his business is overstocked or out of stock.

Inventory systems tell you how many components or ingredients you need to create or assemble your final product. Without this information, he may end up with overstock, eroding his bottom line, or insufficient inventory to meet customer demand.

But while you will need an inventory management system, which one you choose is entirely up to you. There are countless different systems you can adopt, ranging from simple approaches to comprehensive solutions.

When to update your inventory management

Moving to a dedicated inventory solution can provide huge benefits to your business, but it is a sea change. Here are some signs that it might be time to upgrade.

You need more flexibility

Spreadsheets are an inflexible way to manage inventory. If you find that you need to add additional sheets to your solution, or are struggling because employees can't access real-time data, then it might be time to upgrade to cloud-based inventory software.

You need more precision

Difficulty keeping track of how many of a particular item you have at any given time? With a dedicated solution, you and your employees can get up-to-date information on your inventory anytime, anywhere.

 

Inventory costs are growing

Maintenance costs can seriously undermine your bottom line when left unchecked. The key to minimizing maintenance costs is to store all the stock you need. An efficient inventory management system helps you keep your warehousing efficient.

Slow growth

Maybe your salespeople have to contact your warehouse to find out what they have to sell, or you find yourself spending too much time writing reports manually instead of focusing on your customers. Slowing sales can be a symptom of poorly managed stock - dedicated software can help you get back to growth quickly.



Comments

Post a Comment

Popular posts from this blog

What is checked during a vehicle safety inspection?

You're in the sixth hour of your 12-hour drive along the coast, driving down the interstate without a care in the world, and suddenly your car starts to rattle. Suddenly, your arrival time is in serious jeopardy. Of course, this is a made-up story, because like any good car owner, you bring your car in for a regular inspection. But what is checked during a safety inspection? A safety inspection checks all the features of your vehicle that make it safe for road use. That means checking your tires, brakes, lights, mirrors and other things your vehicle needs to function properly and keep you and your passengers safe. So if you don't want to know what to do when your car breaks down, let's get into the finer points of a safety inspection.   What is a vehicle safety inspection? It varies by state, but in general, a vehicle safety inspection is a regulatory inspection to ensure that vehicles are safe for road use. In some states, this inspection is required annually, whil...
Post a Comment
Read more

What is Domestic Appliance Insurance

Domestic appliances are an essential part of our daily lives, making it easier for us to carry out various tasks such as cooking, cleaning, and washing. However, like any other machine, appliances can break down, leaving you with costly repairs or replacements. Domestic appliance insurance can offer peace of mind by covering the cost of repairs or replacements in case of breakdowns. In this article, we'll explore the benefits of domestic appliance insurance and what you should look for when purchasing a policy. What is Domestic Appliance Insurance? Domestic appliance insurance is a policy that covers the cost of repairs or replacements of household appliances in the event of breakdowns or malfunctions. This insurance is typically offered for appliances such as washing machines, refrigerators, dishwashers, and other household appliances. Benefits of Domestic Appliance Insurance Cost savings: Domestic appliance insurance can help you save money by covering the cost of rep...
Post a Comment
Read more

All About Thai Massage – A Complete Guide

  Thai massage, also known as Thai yoga massage, or informally as "lazy person's yoga," combines assisted yoga with acupressure techniques. The therapist will incorporate yogic stretching movements as you knead and press the muscles along the body's energy lines with the hands and feet. Thai massage combines the principles of acupressure by which Sen is stimulated, which is said to balance the body's energy system. Passive stretching can also help open up the body, which can help increase flexibility and relieve tension within the joints and muscles. A Thai massage treatment generally begins at the feet with the client lying on their stomach and is more energetic and rigorous than their usual massage. The therapist also often uses the hands and feet to apply pressure, and the treatment is usually done through clothing, although oils and lotions can sometimes be used if requested.   What are the benefits of Thai massage? There are many benefits of having ...
Post a Comment
Read more