Inventory System 101

Try imagining your business and where you want it to go. I presume it is quite successful in your head with the brand recognition that you dream of and has already scaled the world. Or, maybe you only want a quaint small boutique as opposed to being a huge corporate entity. Wherever you set your sights to, there are a few things that they must all have in common. One is, every customer that you have will never be disappointed about out-of-stock items while they stroll down the shop’s shelves. And second, information regarding the products in the store have to be available in real time both to you and your customers. Ensuring that you have both checkboxes marked means one thing, and that is to have a fully functioning and well maintained inventory system. Thus, your dreams, albeit only in one facet of it, will have its hopes hinged on the implementation of a proper inventory management software.

If you consider the products to be the lifeblood of your retail business, then the inventory management system has to be the circulatory system. Nothing is as devastating to a business than to have inventory mismanagement. The good news is that as you go about in the daily operations of your business, you will start to have a feel for it so you will not be consistently doing the same mistakes over and over again. The most common pitfall for brick and mortar stores is to rely on old general tools like spreadsheet or similar software suites. Worse, is that some stores still rely on using pen and paper to tabulate inventory data. Although this problem is more prominent these stores, online shops are not exempt from catastrophe if they take inventory management for granted.

The Importance of Inventory System

You could be forgiven if you thought that inventory management is plainly just to as the name implies which is to manage the inventory. This is not the case albeit, in the past, you could argue that the earlier iterations of inventory management systems have a lot less functionality. With the advent of several new advances in the field of computer science and the ever expanding computing capacity, a lot of new capabilities are now possible. This has made a retail store’s inventory management system central to the entirety of operations.

The main function of the inventory management system is to help the store owner decide exactly how much he or she needs to order from his or her suppliers. This may seem trivial to some especially if businesses are relatively small. But, imagine having to go through an entire book of sales and inventory logs before making that decision in a supermarket setting. The only way to scale your business properly is to have complete command of your retail transaction. Using this information with the tools available to you is paramount in attaining your business goals. Inventory systems will normally be able to show you two key figures, first how much certain products have sold at an allotted period, and second, how much stock is left in the stockroom. It is then up to the store owner to decide how much they want to order. Of course, other important information has to also be examined such as the space available in the stockroom as well as the profile of the suppliers. Advanced inventory management systems are able to employ artificial intelligence to help with this decision process. If enough data entries are available, a forecasting tool could be made possible and thus the reordering thought process can be automated and guided.

Inventory System Implementation – Preparation Phase

There are a few key things that you have to do before implementing an inventory management system.

Preparing for an Inventory System Mentally

The number one frustration among implementers of inventory management systems is the mismatch between requirements and the delivered product. This adds to the reluctance of businesses to adapt a pure inventory system to handle their inventory needs. All stakeholders should be at the same wavelengths so that any effort to implement the system is to bear any fruit.

The most crucial part of inventory system implementation is the purchase of the inventory management software. The acquisition usually goes through several stages from requirement gathering until the deployment of the software. In requirement gathering, the information necessary is not just that of the process that is currently being implemented nor the process that is intended to be deployed. There is a little more information that needs to be documented.

First and foremost, the reaction of the operations team or the ones that will most likely input the data into the inventory management system have to be taken. They need to understand the reason for the shift, what their roles will be and what it means to the whole business as a whole. When not everyone is on the same page, it can be difficult should the time for implementation arrive. There are a few things that can be done to ensure that the whole business unit is mentally prepared to adjust to a new system. First of all, they need to be part of any product demonstration. Which brings to light an important point which is to make sure that the software partner has to give a product demo.

Finally, there needs to be a conscious effort to train the staff necessary for the inventory management system to function properly. This way, the staff will not be in for a shock once their routines in operation suddenly change.

There is no surefire way to make sure that an inventory management system, and indeed any software system, to hit the ground running. It is good to curb expectations especially in the early stages of deployment. The only thing that you can do is to tick all boxes to ensure that there would be no significant hitch. Another thing that you can do is to have mitigation plans should anything go wrong in the system.