It takes a lot of moving parts to run a successful business.
You have to manage staff, maintain and grow your customer base, keep track of ordering, see to shipping and logistics, and much more to keep it all running smoothly.
But one often-overlooked aspect of running a successful business, especially in today's lightning-fast e-commerce space, is accurate inventory control.
No matter what kind of business you're in, you need to have a correct count of what you have on hand at any given moment. If you don't know what you've got, you can't very well sell it, and if you don't have the materials you need, you can't take more products to market.
On the other hand, it's easy to over-purchase materials that then can't be converted to saleable products in a timely manner, unnecessarily tying up funds and other resources.
That's why it's time to talk about custom inventory software, and what inventory software can do for your business in terms of increasing efficiency, reducing staff-hours, minimising stock loss, speeding up delivery times, and more.
Why Is Inventory Control Important?
Of course, we all understand the basic definition of the word inventory: it's your materials, your products-in-process, and the final products that are ready to sell, thus generating revenue for your business.
In a way, you can make the case that your inventory is your business.
With too little inventory on hand for your customers' needs, you end up with slow deliveries and unhappy customers – and lost sales. With too much stock, you not only tie up critical capital in materials that won't be turned over in a timely fashion and produce revenue, but you also incur extra costs for storage, insurance, etc.
Yet according to surveys, an astonishing 46 per cent of small businesses with 11 to 500 employees either don't currently track inventory or use a manual inventory process.
Seems a bit foolhardy to trust Dale in the warehouse and his Excel spreadsheet with what amounts to the successful operation of your entire business, no?
Nothing against Dale, but there's a better way.
What Is Inventory Software and How Does it Work?
Inventory management software is made up of interconnected business applications that track, oversee, and coordinate every aspect of a business that touches on inventory. This can include sales of products, purchase of materials, and other processes that are integral to production.
Well-crafted custom inventory software can organise and track all the statistics linked to your inventory – statistics that are by definition constantly in flux and thus hard to keep up with using a pencil and a clipboard.
These applications function by, for instance, letting you know where incoming shipments of materials are as they make their way to you and when they're due to arrive. A solid inventory software system will also track sales and outgoing product shipments, and coordinate various aspects of your operation in real-time by integrating the data accessed by both your sales department and your manufacturing department and providing them with a standardized tool to use it.
But beyond simple tracking, inventory software also allows businesses to identify and eliminate inefficiencies and unnecessary expenditures. The overall idea of inventory management software is that it permits you to take an eagle-eye view of your entire supply chain, ensuring that you have each product where it needs to be when it needs to be there.
Inventory software can also create dynamic purchasing engines, including fully integrated analytics programs. These components of the custom inventory software system can perform analyses on past sales performance as well as other data and accurately forecast future materials purchases based on accurately predicted need.
What Are the Specific Benefits of Custom Inventory Software?
Here's a sobering statistic: according to a study published in Management Science, out of 370,000 inventory records analysed across 37 retail chains, upwards of 65 per cent were inaccurate.
What's more, one of the top eight reasons why small businesses fail as reported by the U.S. Small Business Administration is due to poor inventory management.
We've already looked in general at some ways inventory inaccuracies can affect customer expectations through increased lead time, reduced ability to respond to demand and changes in the market, and by simply being out of stock of a desired product. But let's delve a bit deeper and get explicit about how a custom inventory software system can help alleviate or eliminate these issues.
Reduced staff-hours – Going back to the example of good old Dale in the warehouse, stockroom, or a restaurant's kitchen, in the case of the discovery of a serious inventory discrepancy, what usually happens is Dale and his co-workers will be tasked with conducting a spot inventory check, or worse, a physical count of all your inventory.
Depending on your business, that kind of project can divert a devastating chunk of your workforce from their routine day-to-day tasks – the tasks that actually make the business run.
However, with a bespoke inventory software application, you're able to check your stock status daily, and monitor levels of various items in real-time without a lot of wasted effort.
An inventory software system also reduces work-hours by taking the tasks of optimizing supply chain planning and inventory forecasting off of your plate. The system can help to streamline all of your inventory-related processes by using past performance data to improve accuracy and sharpen forecasting of future needs for both ordering materials and producing finished product.
Reduced Stock Loss – In business, stock loss is bound to happen. However, there are ways to mitigate the worst of it, and a custom inventory software system is an enormous help. Not only can inventory software help manage your stock and keep track of what comes in and what goes out, but such a system can also monitor where items move within the warehouse and between different warehouses and other departments.
Better Logistics and Customer Management – Custom inventory software can integrate your inventory data with your CMS, keeping real-time tabs on what goes in and what goes out, where it currently is, and when it arrives at its destination under one seamless umbrella.
When you're running your business using custom inventory software, these kinds of up-to-date, real-time figures are integrated across all relevant departments. So, as customers access the front end of your e-commerce store to order products, they'll only be able to order what you have on hand.
This streamlining helps not only in terms of tightening up delivery times, but it also reduces staff-hours by saving your customer service staff from having to make uncomfortable apologies to disappointed clients when an expected item is late or happens to be unavailable.
Businesses That Can Benefit From Inventory Software Systems
What businesses don't have inventory? In other words, virtually everyone in business has some kind of stock and faces challenges in keeping on top of it. Everyone from warehouses to manufacturing to retail establishments to restaurants can benefit from more streamlining, more automation, tighter controls, and better planning offered by inventory software.
Why Choose Custom Inventory Software?
The answer is simple: a better fit means more efficiency.
Given all the differences between businesses in various sectors, and then among each business even within the same industry, picking an off-the-shelf inventory software solution is likely to cause more headaches than it's worth. Rather than trying to cram the round pegs of your business into the square holes of a cookie-cutter inventory application, there's no good reason not to have one crafted specifically for you – especially when you consider the savings.
According to Entrepreneur magazine, tight inventory controls result in an increase in profitability of 20 to 50 per cent, and who doesn't want that?
The areas where companies find the most return on investment with custom inventory software are:
Managing Inventory – As noted above, both understock and overstock can cost you, and inventory loss can be a killer.
Space Savings– Clearly delineated storage areas and clear organization provided by inventory software systems helps to increase efficiency.
Maximising Manpower – Custom inventory software streamlines virtually every task for your workers, including their training, thus increasing productivity.
Customer Satisfaction – As mentioned above, a persistent benefit of an efficient inventory software system is happier customers since products sell out less frequently and arrive faster.
In a business world grown ever more competitive with customer expectations for speed and accuracy always increasing, it's clear that custom inventory controls can help virtually any business become more profitable.
Laracle Custom Inventory Software Solutions
At Laracle, our inventory software development team will work with you to craft a system that fits your company just right and runs exactly the way you want it to run.
Give us a call today and provide some basic information to one of our team of experienced inventory software specialists. They'll outline a custom plan for your business and arrange a time to show you all the ways we can help you optimize your company’s operation.
Call Laracle today, and we'll get started on an inventory software plan tomorrow!