5 reasons to invest in smart inventory management system
Smart inventory management systems are valuable tools in providing the bigger picture, allowing retailers to operate more efficiently. This is also the first step before building a warehouse management system.
Smart inventory management to change the game
Inventory management is a set of processes related to supply chain management, demand forecasting, inventory control, and reverse logistics. Tools related to inventory management include safe inventory, order quantity, cost, inventory rotation, customer-managed inventory, and supplier-managed inventory. The level of inventory management is required depending on the industry. Smart inventory management is a set of all processes for monitoring and arranging goods in the factory with support from 4.0 technologies.
However, in reality, inventory management is often not taken seriously when it comes to business and production innovation. Many inventory management statistics may surprise you. The accuracy of inventory management in the U.S. retail market is only 63%. 43% of small businesses in the U.S. don’t track inventory or follow the manual method, and 46% of small and medium-sized businesses don’t use the inventory management system efficiently. Globally, retailers have recorded huge losses of about $1.75 trillion due to poor inventory management.
5 reasons to invest in inventory management
Currently, trading is implemented in multi-channels such as in-store, online, and via mobile applications. This makes inventory tracking complicated. As a part of supply chain management, the inventory management system monitors the flow of goods from the manufacturer to the warehouse and from these facilities to the point of sale. Here are 5 reasons why businesses have to invest in this system.
Inventory management and prediction
The software can help you improve your demand forecasting by analyzing the data. This minimizes costs, raises revenue, and optimizes cash flow. Based on the inventory software, you can also set a minimum inventory level for each item. You can then view a list of products that are in the nearly out-of-stock group and send new orders quickly. A good management system will provide a focused view of inventory on sales channels. It will also allow the allocation of inventory to specific sales channels, which is important if you have warehouses and distribution centers in multiple locations, thus, allowing warehouse management.
Read more: Top 5 smart warehouse solutions in manufacturing industry
Limit missed sales opportunities
Knowing the exact quantity and items available allows you to better serve buyers, replenish goods on time, support the ability to identify specific buyers according to their purchase history and habits.
More efficient capital allocation
To succeed in the retail industry, businesses need to allocate capital correctly by buying the right number of products, meeting customer needs, keeping sales, and avoiding out-of-stock situations. Having accurate inventory reporting data will be very useful. You can quickly identify products with slow sales speed, rebalance the number of imports, step up a marketing plan, change strategies, invest in new products, etc.
Early problem detection
If the inventory is monitored regularly with near real-time data, you will detect the problems almost immediately, and come up with a prompt solution, instead of fixing when significant damage has occurred. Identifying problems earlier and making changes faster is also a way to save costs and manage risk effectively.
Enhance customer experience
The smart inventory management system provides near real-time updates. Reporting better and more accurately leads to a more complete process of resolving orders, thereby improving the customer experience.
Smart inventory management systems are valuable tools in providing the bigger picture, allowing retailers to handle inventory better. If you’re not performing inventory management or still managing inventory with a manual spreadsheet, then maybe it’s time for you to innovate this process with a smart solution.
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