Why Inventory Management System ?

When most people think of inventory management, they think of retail applications. While retail operations rely heavily on inventory management, inventory management systems are widely used in a variety of industries, from manufacturing to utilities, healthcare, education, government, and more. Inventory management systems streamline and centralize the process for controlling the flow and maintenance of inventory to ensure that the right amount of inventory is available at the right time and of the right quality.

About Inventory Management System

An inventory management system is the combination of technology (hardware and software) and processes and procedures that oversee the monitoring and maintenance of stocked products, whether those products are company assets, raw materials and supplies, or finished products ready to be sent to vendors or end consumers. A complete inventory management system consists of

  • A system for identifying every inventory item and its associated information, such as barcode labels or asset tags. Inventory management system
  • Hardware tools for reading barcode labels, such as handheld barcode scanners or smartphones with barcode scanning apps.
  • Inventory management software, which provides a central database and point of reference for all inventory, coupled with the ability to analyze data, generate reports, forecast future demand, and more.
  • Processes and policies for labeling, documentation, and reporting. This should include an inventory management technique such as Just in Time, ABC Analysis, First-In First-Out (FIFO), Stock Review, or another proven methodology.
  • People who trained to follow these policies and processes.

Benefits of Inventory Management Systems

Without an inventory management system, the goods and products that flow through an organization will inevitably be in disarray. An inventory management system enables a company to maintain a centralized record of every asset and item in the control of the organization, providing a single source of truth for the location of every item, vendor and supplier information, specifications, and the total number of a particular item currently in stock. Because inventory often consists of movable assets, inventory management systems are critical for keeping tabs on current stock levels and understanding what items move quickly and which items are more slow-moving, which in turn enables organizations to determine when it’s time to reorder with greater accuracy. Overall, a comprehensive inventory management system offers countless benefits to companies including: Improved cash flow Better reporting and forecasting capabilities Reduction in storage costs (overhead) Reduced labor costs Reduction in dead stock Better organization Enhanced transparency Improved supplier, vendor, and partner relationships