WHAT IS INVENTORY MANAGEMENT SYSTEM?
Inventory management systems track a business' inventory levels, orders, sales, and deliveries. They can also be used to create work-orders, receipts, bill of materials and other documents critical to the smooth and efficient running of a company.
Modern-day inventory management systems can be used to track goods and resources throughout their life cycle as they are geo-tagged and tracked remotely. This allows companies to get a view of the moving parts of their supply chain process, identify bottlenecks, and fix issues before they begin to accumulate. Incorporating the latest technology, such as AI, big data, and the Internet of Things (IoT) can allow inventory management systems to automatically reorder goods, ensuring that stocks are kept at optimum levels.
Types of Inventory Management Systems
Manual: Spreadsheets or paper-based, these systems are low-cost but are error-prone.
Software: It provides some scope for automation for recording, reporting, and analysis. It can also integrate scanning devices for broader organizational operations like orders, purchasing and accounting, enabling end-to-end visibility.
AI-Driven: Over and above what software provides, AI-driven inventory management systems enable businesses to accelerate efficiency, maximize visibility, mitigate risk and empower people to make the best decisions.
Inventory Management Systems Benefits
Benefits include optimized inventory levels to avoid costs of excess or shortage, order accuracy to reduce picking errors through validation, end-to-end visibility for real-time inventory tracking, and reporting capabilities to identify trends, waste, dead stock for better planning.
Inventory Management Systems Best Practices
Some of the best practices include classification of inventory by XYZ analysis for differentiation, implementation of cycle counting for constant validation, integrating systems for end-to-end visibility, and more importantly ensuring staff has sufficient training on procedures and technologies.
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