For many SMBs, their so-called inventory management system isn’t much of a system at all, but a combination of inefficient data exports, tab-rich Excel spreadsheets, and crossing fingers that everything lines up correctly. But growing companies quickly learn that capturing the key movements in stock provides many business advantages. Optimising inventory is not only a way to reduce costs and increase process efficiencies, but it can be a launching pad for differentiated customer experiences.
Your business may be smaller than industry stalwarts and giants, but it doesn’t mean the process of managing inventory is any less complex. The good news is that SMBs now have the advantages of cloud-based inventory management, and with it, the ability to achieve end-to-end visibility of inventory to do everything from reliably promise goods to streamline logistics in a way that rivals much bigger companies.
But with so many inventory management systems on the market, it can be challenging to know which one is right for your business. Here are the three most important things to consider when choosing an inventory management system.
What challenges are your business facing when it comes to managing inventory? Are you faced with frequent overstock, or do you not have enough stock? Are you able to efficiently and accurately break down stock into safety stock, replenishment stock and normal stock? Do you lack visibility across multiple warehouse locations? Are you having trouble costing effectively accommodating fluctuations in customer demand?
Identifying the top challenges will ease the process of finding vendors that can fulfil those feature and functionality needs. For example, some cloud-based software offers robust capabilities to manage inventory in one location, but falls short when it comes to managing it across different channels and locations.
Look for vendors with more sophisticated features that will scale with inventory management needs—such as mobile capabilities and access to real-time data for analytics. What’s more, make sure the software provides out-of-the-box functionality for core processes, while still being flexible enough to customise and configure to your business’s unique processes.
Even if you don’t need all of those sophisticated features now, as your business grows, you will.
For B2C companies, the importance of multi-channel management is of course crucial to consider in selecting the right inventory management system. Ultimately, you want to seamlessly process and manage real-time data from sales in marketplaces, physical stores and a native website to ensure consumers get what they want when they expect to get it. Therefore, open APIs for easy integration with POS systems and ecommerce software are crucial.
But for B2B companies, seamless multi-channel management is also becoming a key business differentiator. B2B customers expect that orders placed online, on the phone or by a sales rep on the road meet the same conditions they have become accustomed to in the consumer space.
In streamlining this process, an integrated approach to inventory management ensures accurate data across systems and provides a window to assess trends and business efficiencies. Integrating inventory management with back-office financial systems, for instance, enables real-time visibility for stating inventory accurately in financial reports and boosts forecasting capabilities.
One of the biggest obstacles to any technology implementation is change management. Moving from manual to automated inventory management necessitates top-down support, as well as support from the vendor and implementation partner in ensuring training and assistance, even after implementation. The right technology partner will bundle training capabilities with the software, including opportunities for both in-person training and continued online support.
But choosing software that is easy to use and understand lowers the barrier to entry from the get-go. Software that necessitates users switch between multiple screens or leverage workflows that don’t make sense in the context of their job will create adoption barriers. An inventory management system that is intuitive, accessible and secure from any location at any time will ease the onboarding and change management processes.
By keeping in mind business problems, customers and users, inventory management system selection isn’t as overwhelming as it may seem.
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