Inventory management softwareSource:

en.wikipedia.org/wiki/Inventory_management_software

Inventory management software is a software system for tracking inventory levels, orders, sales and
deliveries.[1] It can also be used in the manufacturing industry to create a work order, bill of materials and
other production-related documents. Companies use inventory management software to avoid
product overstock and outages. It is a tool for organizing inventory data that before was generally stored
in hard-copy form or in spreadsheets.

Contents

1 Features
o 1.1 Order management
o 1.2 Asset tracking
o 1.3 Service management
o 1.4 Product identification
o 1.5 Inventory optimization
2 History
3 Purpose
4 Manufacturing uses
5 Advantages of ERP inventory management software
o 5.1 Cost savings
o 5.2 Increased efficiency
o 5.3 Warehouse organization
o 5.4 Updated data
o 5.5 Data security
o 5.6 Insight into trends
6 Disadvantages of ERP inventory management software
o 6.1 Expense
o 6.2 Complexity
7 Benefits of cloud inventory management software
o 7.1 Real time tracking of inventory
o 7.2 Cut down hardware expenses
o 7.3 Fast deployment
o 7.4 Easy integration
o 7.5 Enhanced Efficiency
o 7.6 Improved Coordination
8 Disadvantages of cloud inventory management software
o 8.1 Security and privacy
o 8.2 Dependency
o 8.3 Decreased flexibility
o 8.4 Integration
9 See also
10 References
 Features

Inventory management software is made up of several key components working together to create a
cohesive inventory for many organizations' systems. These features include:

Order management

Should inventory reach a specific threshold, a company's inventory management system can be
programmed to tell managers to reorder that product. This helps companies avoid running out of
products or tying up too much capital in inventory.

Asset tracking

When a product is in a warehouse or store, it can be tracked via its barcode and/or other tracking
criteria, such as serial number, lot number or revision number. Systems. for Business, Encyclopedia of
Business, 2nd ed. Nowadays, inventory management software often utilizes barcode, radio-frequency
identification (RFID), and/or wireless tracking technology.

Service management

Companies that are primarily service-oriented rather than product-oriented can use inventory
management software to track the cost of the materials they use to provide services, such as cleaning
supplies. This way, they can attach prices to their services that reflect the total cost of performing them.

Product identification

Barcodes are often the means whereby data on products and orders is inputted into inventory
management software. A barcode reader is used to read barcodes and look up information on the
products they represent. Radio-frequency identification (RFID) tags and wireless methods of product
identification are also growing in popularity.

Modern inventory software programs may use QR codes or NFC tags to identify inventory items and
smartphones as scanners.[citation needed] This method provides an option for small businesses to track inventory
using barcode scanning without a need to purchase expensive scanning hardware.[citation needed]

Inventory optimization

A fully automated demand forecasting and inventory optimization system to attain key inventory
optimization metrics such as:

Reorder point: the number of units that should trigger a replenishment order [citation needed]
Order quantity: the number of units that should be reordered, based on the reorder point, stock on hand
and stock on order[citation needed]
Lead demand: the number of units that will be sold during the lead time[citation needed]
Stock cover: the number of days left before a stockout if no reorder is made[citation needed]
Accuracy: the expected accuracy of the forecasts[citation needed]
 History

The Universal Product Code (UPC) was adopted by the grocery industry in April 1973 as the standard
barcode for all grocers, though it was not introduced at retailing locations until 1974.[2] This helped drive
down costs for inventory management because retailers in the United States and Canada didn't have to
purchase multiple barcode readers to scan competing barcodes. There was now one primary barcode for
grocers and other retailers to buy one type of reader for.

In the early 1980s, personal computers began to be popular.[3] This further pushed down the cost of
barcodes and readers. It also allowed the first versions of inventory management software to be put into
place. One of the biggest hurdles in selling readers and barcodes to retailers was the fact that they didn't
have a place to store the information they scanned. As computers became more common and affordable,
this hurdle was overcome. Once barcodes and inventory management programs started spreading
through grocery stores, inventory management by hand became less practical. Writing inventory data by
hand on paper was replaced by scanning products and inputting information into a computer by hand.

Starting in the early 2000s, inventory management software progressed to the point where
businesspeople no longer needed to input data by hand but could instantly update their database with
barcode readers.[4]

Also, the existence of cloud based business software, such as Megaventory, Handshake,
or Unleashed and their increasing adoption by businesses mark a new era for inventory management
software. Now they usually allow integrations with other business backend processes, like accounting and
online sales.

Purpose

Companies often use inventory management software to reduce their carrying costs. [5] The software is
used to track products and parts as they are transported from a vendor to a warehouse, between
warehouses, and finally to a retail location or directly to a customer.

Inventory management software is used for a variety of purposes, including:

Maintaining a balance between too much and too little inventory.

Tracking inventory as it is transported between locations.
Receiving items into a warehouse or other location.
Picking, packing and shipping items from a warehouse.
Keeping track of product sales and inventory levels.
Cutting down on product obsolescence and spoilage.
Avoiding missing out on sales due to out-of-stock situations.

Manufacturing uses

Manufacturers primarily use inventory management software to create work orders and bills of materials.
This facilitates the manufacturing process by helping manufacturers efficiently assemble the tools and
parts they need to perform specific tasks. For more complex manufacturing jobs, manufacturers can
create multilevel work orders and bills of materials, which have a timeline of processes that need to
happen in the proper order to build a final product. Other work orders that can be created using
inventory management software include reverse work orders and auto work orders. Manufacturers also
use inventory management software for tracking assets, receiving new inventory and additional tasks
businesses in other industries use it for.

Advantages of ERP inventory management software

There are several advantages to using inventory management software in a business setting.

Cost savings

A company's inventory represents one of its largest investments, along with its workforce and locations.
Inventory management software helps companies cut expenses by minimizing the amount of
unnecessary parts and products in storage. It also helps companies keep lost sales to a minimum by
having enough stock on hand to meet demand.

Increased efficiency

Inventory management software often allows for automation of many inventory-related tasks. For
example, software can automatically collect data, conduct calculations, and create records. This not only
results in time savings, cost savings, but also increases business efficiency.

Warehouse organization

Inventory management software can help distributors, wholesalers, manufacturers and retailers optimize
their warehouses. If certain products are often sold together or are more popular than others, those
products can be grouped together or placed near the delivery area to speed up the process of picking. By
2018, 66% of warehouses "are poised to undergo a seismic shift, moving from still prevalent pen and
paper processes to automated and mechanized inventory solutions. With these new automated
processes, cycle counts will be performed more often and with less effort, increasing inventory visibility,
and leading to more accurate fulfillment, fewer out of stock situations and fewer lost sales. More
confidence in inventory accuracy will lead to a new focus on optimizing mix, expanding a selection and
accelerating inventory turns."[6]

Updated data

Up-to-date, real-time data on inventory conditions and levels is another advantage inventory
management software gives companies. Company executives can usually access the software through
a mobile device, laptop or PC to check current inventory numbers. This automatic updating of inventory
records allows businesses to make informed decisions.[7]

Data security

With the aid of restricted user rights, company managers can allow many employees to assist in
inventory management. They can grant employees enough information access to receive products, make
orders, transfer products and do other tasks without compromising company security. This can speed up
the inventory management process and save managers' time.

Insight into trends

Tracking where products are stocked, which suppliers they come from, and the length of time they are
stored is made possible with inventory management software. By analysing such data, companies can
control inventory levels and maximize the use of warehouse space. Furthermore, firms are more prepared
for the demands and supplies of the market, especially during special circumstances such as a peak
season on a particular month. Through the reports generated by the inventory management software,
firms are also able to gather important data that may be put in a model for it to be analyzed. [citation needed]

Disadvantages of ERP inventory management software

The main disadvantages of inventory management software are its cost and complexity.

Expense

Cost can be a major disadvantage of inventory management software. Many large companies use
inventory management software, but small businesses can find it difficult to afford it. Barcode readers
and other hardware can compound this problem by adding even more cost to companies. The advantage
of allowing multiple employees to perform inventory management tasks is tempered by the cost of
additional barcode readers. Use of smartphones as QR code readers has been a way that smaller
companies avoid the high expense of custom hardware for inventory management.

Complexity

Inventory management software is not necessarily simple or easy to learn. A company's management
team must dedicate a certain amount of time to learning a new system, including both software and
hardware, in order to put it to use. Most inventory management software includes training manuals and
other information available to users. Despite its apparent complexity, inventory management software
offers a degree of stability to companies. For example, if an IT employee in charge of the system leaves
the company, a replacement can be comparatively inexpensive to train compared to if the company used
multiple programs to store inventory data.

Benefits of cloud inventory management software

The main benefits of a cloud inventory management software include:

Real time tracking of inventory

For startups and SMBs, tracking inventory in real time is very important. Not only can business owners
track and collect data but also generate reports. At the same time, entrepreneurs can access cloud-based
inventory data from a wide range of internet enabled devices, including: smartphones, tablets, laptops,
as well as traditional desktop PCs. In addition, users do not have to be inside business premises to use
web based inventory program and can access the inventory software while on the road.

Cut down hardware expenses

Because the software resides in the cloud, business owners do not have to purchase and maintain
expensive hardware. Instead, SMBs and startups can direct capital and profits towards expanding the
business to reach a wider audience. Cloud-based solutions also eliminate the need to hire a large IT
workforce. The service provider will take care of maintaining the inventory software.

Fast deployment
Deploying web based inventory software is quite easy. All business owners have to do is sign up for a
monthly or yearly subscription and start using the inventory management software via the internet. Such
flexibility allows businesses to scale up relatively quickly without spending a large amount of money.

Easy integration

Cloud inventory management software allows business owners to integrate [8] with their existing systems
with ease. For example, business owners can integrate the inventory software with their eCommerce
store or cloud-based accounting software. The rise in popularity of 3rd party marketplaces, such
as Amazon, eBay and Shopify, prompted cloud-based inventory management companies to include the
integration of such sites with the rest of a business owner's retail business, allowing one to view and
control stock across all channels.[9]

Enhanced Efficiency

Cloud inventory systems increase efficiency in a number of ways. One is real-time inventory monitoring.
A single change can replicate itself company-wide instantaneously. As a result, businesses can have
greater confidence in the accuracy of the information in the system, and management can more easily
track the flow of supplies and products and generate reports. In addition, cloud-based solutions offer
greater accessibility.

Improved Coordination

Cloud inventory programs also allow departments within a company to work together more efficiently.
Department A can pull information about Department B's inventory directly from the software without
needing to contact Department B's staff for the information. This inter-departmental communication also
makes it easier to know when to restock and which customer orders have been shipped, etc. Operations
can run more smoothly and efficiently, enhancing customer experience. Accurate inventory information
can also have a huge impact on a company's bottom line. It allows you to see where the bottlenecks and
workflow issues are and to calculate break-even points as well as profit margins.

Disadvantages of cloud inventory management software

Security and privacy

Using the cloud means that data is managed by a third party provider and there can be a risk of data
being accessed by unauthorized users.

Dependency

Since maintenance is managed by the vendor, users are essentially fully dependent on the provider.

Decreased flexibility

Depending on the cloud service provider, system and software upgrades will be performed based on their
schedule, hence businesses may experience some limitations in flexibility in the process.

Integration

Not all on-premises systems or service providers can be synced with the cloud software used.
 See also

Enterprise resource planning

Document automation
Inventory control system
Operations management
Supply chain management
Vendor-managed inventory
Warehouse management system

References

1. ^ Lesonsky, Rieva (1998). "Tracking Inventory". Entrepreneur Magazine.

2. ^ Dolinsky, Anton. "Inventory Management History Part Four". Almyta Systems.
Retrieved August 17, 2010.
3. ^ Polsson, Ken. "Chronology of Personal Computers 1981". Polsson's WebWorld.
Retrieved August 17, 2010.
4. ^ Moskowitz, Robert. "Using Your Computer for Inventory Control". Accvision. Retrieved August
17, 2010.
5. ^ Piasecki, Dave. "Optimizing Economic Order Quantity Carrying Costs". Inventoryops.com.
Retrieved August 17, 2010.
6. ^ Lu, Clara (March 27, 2014). "Recent Study Shows that 66% of Warehouses Plan to Expand
Technology Investments by 2018". TradeGecko Blog.
7. ^ Lockard, Robert (29 November 2010). "3 Advantages of Using Inventory Management
Software". Inventory System Software Blog. Retrieved 23 November 2012.
8. ^ "Integrations and Apps for Online Inventory Management Software |
TradeGecko". www.tradegecko.com. Retrieved 2015-11-24.
9. ^ "Tamebay : Blog : Brightpearl adds Amazon integration". tamebay.com. Retrieved 2015-11-25.