Updated: Dec 10, 2021
Finding the Right Inventory Tracking Software
Logbooks and spreadsheets have gone the way of the dinosaurs. With paper inventory management, mistakes are more likely to happen and become more costly. Companies typically collect inventory data on spreadsheets that are stored on shared hard drives. As a result, they are at risk, particularly in competing markets.
Despite its challenges, the software industry remains confident. Implementing a system that offers seamless inventory management will benefit a company in terms of saving unnecessary costs and adding value to their customers.
Considering that there are so many choices and systems to choose from, finding the system that balances functionality with ease of use can be challenging.
The five most crucial questions you should ask when you are evaluating inventory management and tracking systems.
How to choose inventory tracking software
The majority of systems offer the same basic features, but you should understand the relationship between those features and your enterprise processes. Consider each solution in light of this question.
Can I see stock levels and status of orders in real time?
Companies in the modern business world require real-time visibility into order status and stock levels. An inventory-updating system that is cloud-based usually offers better stock visibility.
Unless your business units have real-time, up-to-date stock information, they will be forced to guess at what stock level is appropriate for certain situations. It's likely you will have out-of-stock inventory or late deliveries despite having a system in place. With systems that don't receive real-time inventory information, failure to display overstock and understock is common.
Are my needs going to be met by the system in the future?
In many cases, inventory management systems, especially custom-tailored solutions, do not offer sufficient flexibility to support modern business practices.
Is the system capable of adding a new product line if your business needs change? Do you have the capability to create variations of the same item using unique SKUs? Can you source products using the data for your inventory organized in helpful product families? Do you have a system that generates unique serial and batch numbers?
In the case of custom solutions and systems not based on pure plays, you will need to contact the supplier in case of changes to the family of products. As a result, the solution is inefficient, costly, and limited.
Can the reporting system help make quick, accurate business decisions?
Making better business decisions can be achieved by generating accurate and timely reports when and where you need them. Establish a list of reporting requirements for your organization. Which reports do you need? Review the timeliness and schedule of your reports. Can they be generated automatically or can they be accessed whenever necessary? The data used for the report is it coming from real-time reports or from last day's? Do I have the option of creating both site-specific and enterprise-wide reports? Besides specialized reports like Bill of Materials and Job Costing, do you have any other options? Once you understand your reporting needs, go through the reports that are provided with the system. Request any reports that aren't part of the standard offering from the supplier. Some companies limit your access to reports and data unless you pay for additional modules.
Is the solution integrated across the enterprise?
Modern software systems are dependent on enterprise-wide integration or system connectivity. It's also a weak point, and can cause problems with some systems. Consider your needs for integration and what the solution offers. Check for any gaps you may notice with the vendor. In order to reduce manual data entry, you should eliminate it as much as possible. Data from other systems should be pulled and organized from integrations in order to improve efficiency and eliminate errors. Don't forget that the integration needs you have now may not be relevant to your future needs. Check for systems that offer API (Application Programming Interface) functionality. It is possible to configure the system API so that it supports your own integration paths. The convenience of custom integrations will eliminate the need for costly expenses in the future.
Are the support resources suited to my company?
The level of support given to software can make the difference between an efficient solution and shelfware for many companies. Does your solution have any support resources? Could you use a forum or documentation, or are you subject to a helpdesk in another country? For issue tracking, do you have a ticketing process? Make sure to consider the cost too. Do these charges come out of the license fee or is there a separate charge? It's common for support costs to drastically increase the overall price of your software solution.
Integrating Inventory Management
In light of your newly expanded knowledge of how inventory management systems can contribute to overall company efficiency and cost savings, it’s time to put your knowledge into practice and begin searching for a good solution.