Proper Inventory management is an important aspect for small-scale to large-scale businesses. The correct inventory management system for a particular business depends on various factors such as the dimensions, weight, type of product and the growth rate of the business. Most of the retailers start their business by using spreadsheets for management of inventory. Irrespective of the size or the success of a business, the growth of a retailer is directly proportional to the efficiency of the inventory management system (IMS). It is of utmost importance to be able to track the inventory at any time and any place which enables the employees to make important decisions for the company effectively.
Inventory management can be defined as the efficient tracking and movement of products in a storage facility or a warehouse. At present, robust and smart tools have made inventory management a faster and error-free process with more transparency and better control. After initial configuration, these systems automatically segregate and manage inventory for the business.
Intelligence control feature and RFID tracking for product identification in the advanced IMSs eradicate redundancy and errors that surface in traditional the IMS. Advanced features like live tracking of inventory and extraction of product information in all of the warehouses or office spaces reduce cost overheads by a considerable margin.
There exist numerous advantages of using a modern IMS. Almost 65% of a retailer’s inventory records were found to be incorrect as reported by the University of Chicago. Without complete knowledge of inventory, a business owner might have to bear additional financial burdens. For multiple channel retail, it gets difficult for errorless tracking of inventory. One should opt of an IMS that collects data from multiple channels while simultaneously syncing tons of data.
The purpose of an IMS is not only for simplifying inventory management but also to collect and analyze monthly reports generated by the IMS and use it as a feedback of the current business scenario that includes information regarding the import, export, consumer feedback and adjustment in marketing strategies. For more information on selecting the ideal inventory management system, follow the link below: https://www.stitchlabs.com/learning-center/importance-of-inventory-management-does-your-retail-business-need-it/
Manual management of inventory introduces many errors which are detrimental to the business. Acquiring IMSs that automatically tracks, and segregates inventory can free up time which can be utilized for other productive work for the growth of the business. Some of the additional features include indications for reordering of inventory that is running low and report generation for business analysis.
Studies show that with the proper detection and implementation of an IMS, retailers can boost their profit margins up to 50% and indeed is profitable for any business. Apart from decreasing the labor costs, intelligence control mechanism is the major factor that affects the profitability in a positive way. For an overall understanding of the business, one can consider certain factors like the average value of orders, the turnover ratio, etc. This enables the CEO of businesses to make the correct decisions and calculations for minimizing the business expenditure that can arise due to out-of-order and other similar inventory related issues.