Knowing When to Upgrade Inventory Planning Software
When juggling the components of a business, inventory is what powers the sales and other external processes. Signs that your company is in need of inventory planning software are:
- When you are unable to determine stock on hand without a physical inventory count
- When you cannot profitably handle fluctuations in inventory
- Inability to meet and satisfy customer demands
- Reduction in communication time between receiving, shipping, and accounting
- When you cannot make timely, profitable decisions
1. Knowing What Is On Hand
Balancing inventory is about knowing what you have in stock. Whether you sell the parts of an engine or the pieces to construct a microchip, you need to know what’s in stock in order to efficiently manage production processes. If a client comes in with a large order, quick turnover to fill the order will bring your business up in the ranks of suppliers. Sending someone to the warehouse to check the stock is a much larger undertaking than checking the system to process the order.
2. Do Not Carry What You Do Not Need
Storing inventory is about having the perfect amount of space for items. With first in, first out (FIFO), it would be expected that your supply moves forward at a constant rate. However, some items get over- ordered because of a problem with forecasting or push from the supplier. With items sitting on the shelf, you either cannot profit from them or have to pay more for storage. If they’re misplaced, they may be re-ordered and not found until the yearly inventory process. At the end of the year, during your physical inventory count, you find that you have an overstock, which costs your business money. Inventory planning software prevents shelf searching and allows the user to see into the system to determine what is and is not moving. This real-time data automates other processes so that procurement becomes more streamlined.
3. Improve Customer Service Time
With inventory planning software, it is easy to see what is on hand. When a customer is looking for an item, you are able to meet their demands in a timely manner. Additionally, if an item is on back-order you can see when it is forecasted to come in. Having the capability to know what is on hand helps orders process faster. Orders get shipped on time and customers get what they need. When a customer gets what they need, the repeat business and referrals are invaluable.
4. Connect Your Team
With the right software, everyone is connected and gets the real-time information they need to do their job. When receiving can process an order, and accounts receivable can see this same order on their screen, time is saved and mistakes are reduced. When accounts payable can track a shipment from the warehouse to the customer in order to close a sale, it can be seen with the right software. With everyone’s eyes on the same page, everything is more efficient.
5. Managed Inventory Controls the Bottom Line
It’s not only about making your job easier, it’s also about having the tools to make the right decisions to increase profitability. You not only reduce excess inventory, paperwork, and headaches but also have visibility into the data your team needs to make timely decisions.