What is Inventory Management? What essentials are needed for proper inventory management?
Inventory management is defined as the process of ordering, storing and using a company’s inventory. It includes raw materials, components, and finished products, as well as warehousing and processing inventory.
As a company scales in size, having access to an inventory management system is crucial to the daily operations of your business. Here are some of the essentials that are needed for an inventory management software solution:
Keeping a record of your product information is a key essential to inventory management. Information should include generated SKUs, barcodes, supplier information, bin and location numbers. It should also include tracking the cost of each item in your warehouse to ensure accountability and visibility. According to a study conducted by Statista, 21% of supply chain professionals found that the visibility of their inventory is one of the biggest challenges they're currently facing.
Stock monitoring is another essential feature that should be included in an inventory management system. Experiencing an out-of-stock (OOS) situation results in a lost sale for your business. Reducing OOS is particularly challenging without access to a system. It was found that 30% of consumers feel that stock outs hurt their shopping experience, leading them to not purchase from your company.
Being able to highlight your brand across multiple sales channels such as Ebay or Amazon is a key feature that you should have access to. Synchronizing your inventory across multiple sales channels prevents overselling beyond inventory capabilities. It was found that 34% of businesses shipped an order late because they sold a product that was not in stock.