Automated inventory management is a helpful tool for small and medium-size businesses that are looking to take their business processes to the next level. Instead of staying with a manual system that they have been using for years, they can move up to something that will save them ample time and money in the long run. Growth requires changes to the way that a company conducts its business affairs, and that is one reason why automated inventory management comes in so handy.
We will first address the topic of manual inventory management so that we can later compare and contrast it to an automated approach.
MANUAL INVENTORY MANAGEMENT METHODS
There are a number of manual ways to manage your inventory. For example, you can rely on your memory, do it all by hand, or use Excel spreadsheets. Let’s talk about the strengths and weaknesses of each of these.
Relying on your memory can work for startups that are small, one-man operations. If you are the only one in charge of your inventory, you might be able to get away with not writing anything down, but instead relying purely on your own experience to remember how many items you have in stock and which ones you need to reorder. This method is unable to work as soon as your inventory gets big enough and you start hiring other people to manage the warehouse. You will most likely need to move up to something else, such as this next one.
Doing it all by hand involves writing item names, serial numbers, quantities, vendors, and other information on a piece of paper. With this method, you don’t rely on a single person’s memory. Anyone can check the written record and make his or her own edits. This is fairly risky, though, because it’s difficult to prevent unauthorized people from making changes, stealing records, and even losing or destroying them.
This brings us to using Excel spreadsheets. Excel is a great tool for digitally storing and organizing information. You can transfer inventory data from a piece of paper to a spreadsheet and update it as needed. However, the data entry process can’t be automated, so someone will always have to manually enter new numbers as products are bought and sold. This can lead to typographical errors and other mistakes. Plus, there is no guarantee that the file will be safe.
AN AUTOMATED APPROACH
Now that we’ve covered the manual methods of inventory management, we will proceed to take an automated approach and see how it can benefit a variety of businesses and other types of organizations. With inventory management software, you can do the following things, among many others, to automate your inventory processes:
We will address each of these points in greater detail.
SCAN IN AND OUT
You can either buy a specialized barcode scanner or download an app to turn your smartphone or tablet into a barcode scanner by using its camera function. Whichever option you choose, the point is that you can use a mobile device to scan in and out items that are coming and going from your warehouse. You can use it to generate purchase orders, cycle count inventory, receive shipments, and more. Using a barcode scanner speeds up everything by putting the right information into the palm of your hand, and it makes sure that the right items are scanned, so nothing gets entered incorrectly or misidentified.
AUTOMATIC REORDER POINTS
Automatic reorder points are a perfect example of automated inventory management. Rather than having to constantly check item quantities on the shelves, you can assign minimum quantities to each of your parts so that once they reach them, you will be notified. A purchase order can be automatically generated with the proper vendor and reorder quantity listed, and all you have to do is issue it. No longer will you have to worry about accidentally stocking up too much on a particular item, nor will you have to be concerned about running out because you will be alerted to the fact that it is time to reorder with plenty of time to avoid a stockout. You can maintain a healthy balance with automatic reorder points in place across the board.
IMPROVE WAREHOUSE ORGANIZATION
Have you ever had a moment of intuition when you noticed that two items are often ordered together, and so it might make sense to store them closer together in the warehouse? You can turn such intuition into hard fact by generating sales reports to study the figures. That way, you will be able to identify seasonal demand trends and other data points that will help you to adjust your inventory stock and the way you have your warehouse organized. Put complementary items close to each other on the shelves to make it easier to pick them, and place lower-selling items farther from the receiving area than higher-selling items.
INTEGRATION WITH OTHER BUSINESS SOLUTIONS
You can practically turn your inventory management solution into a CRM by adding all of the integrations you like to it. You can pick and choose whatever you like based on what the inventory management software can handle. For example, Fishbowl currently integrates with a variety of other business solutions that are in the following categories:
Accounting: QuickBooks, QuickBooks Online, Reckon, and Xero
Data Storage: Dropbox
E-commerce: Amazon, BigCommerce, eBay, Magento, Shopify, 3dcart, Volusion, Woo Commerce, X-Cart, and Zen Cart
EDI: HighJump Software and SPS Commerce
Merchant Services: Authorize.Net and CardConnect
Mobile Hardware: Android, Apple, Microsoft Surface, Motorola, Symbol, Unitech, Wasp Barcode, and Zebra
Operating Systems: Android, iOS, Linux, and Windows
Shipping: DHL, Endicia, FedEx, OnTrac, ShipRush, ShipStation, ShipWorks, UPS, and USPS
SOLVING MANUAL PROBLEMS
Automated inventory management solves the problems presented by a manual approach by limiting access to authorized users, automatically updating quantities when sales are made and new items are received, eliminating double data entry to increase data accuracy, and allowing information to be organized into a variety of reports for analysis.
Memory, pen and paper, and Excel spreadsheets are three manual inventory management methods that offer small businesses some benefits and many problems. An automated approach, such as inventory management software, solves these problems and allows growing businesses to: