South of Metro | 7 Benefits of Having an Online Inventory Management System | Manual inventory management might be adequate for a very small business. However, as the enterprise grows in size and expands its available offers, this becomes progressively less sustainable. An updated online inventory management system can offer a wide variety of benefits to businesses of any size and industry, regardless of whether they primarily operate online or in a traditional brick-and-mortar setup.
Here are just a few of the benefits of automating your inventory management and taking it online:
1.) Reduced labor requirements
Traditionally, inventory management was a labor-intensive job. As businesses become larger or as they diversify their offerings, it becomes more and more difficult to keep on top of their existing stocks. This inevitably leads to more labor inputs being needed to keep on top of the tracking and management of stocks, which in turn increases overhead expenses. Sales teams will also find that they’re using up a lot of their time calling up the inventory and warehousing team to get a better picture of available stock.
Having an online inventory management system, especially one that allows SKU tracking, can help prevent both these issues. Not only will your management, warehousing, and sales teams have an accurate, up to the minute picture of what stocks are available, no time has to be wasted verifying item availability. This can allow you to keep your warehousing team lean and it will allow salespeople to dedicate more of their time for serving customers.
2.) Reduced warehousing expenses
Warehousing is an often overlooked business expense. However, any savings in this area is welcome, as it is a recurring cost. The real-time monitoring enabled by an online inventory management system enables organizations to bring their warehousing costs down.
Without real-time monitoring, more warehouse space is often required to accommodate buffer stocks to prevent lost sales. With an online inventory management system, buffer stocks can be kept smaller or eliminated. This means less warehouse space can be used, which can bring running warehousing and rental costs to a minimum.
3.) Fewer human errors
Manual inventory management is often sufficient for microbusinesses with few items on offer. But once an organization reaches a certain size, human error in inventory management is often inevitable, especially for retailers and other sellers that have an extremely diverse set of offers. These errors can become potentially expensive and lead to all kinds of issues involving accounting and valuation, among others.
By adopting an online inventory management system early on, these potentially costly inventory errors can be reduced or avoided entirely. When paired with an automated tracking system, these errors can be reduced even further.
4.) Reduced pilferage
Pilferage has long been an issue in stock management, particularly in larger businesses. Manual inventory management, particularly in the context of a larger organization, often tends to invite stock pilferage due to the difficulty of verifying whether or not items are in stock. The huge margin for human error that has to be allowed for manual stocking systems also gives more room for these unfortunate incidents to happen.
With an online inventory management system, inventory-related work becomes far more transparent, even when reviewing available stocks remotely. It’s far harder for your stock to “disappear” for long, as any quick audit will now immediately reveal any inconsistencies. In other words, pilferers have much less room to hide their activities.
5.) Real-time data monitoring
The real-time monitoring functionality of online inventory management systems is most often used to trigger automatic ordering from suppliers. But it offers other benefits as well. Being able to access inventory status in real-time can give up-to-the-minute insights for the type of items customers are likely to buy certain offers. This can give managers a better idea of the types of items that would sell better at specific times.
Given time, enough data can be gathered to give insights on customer behavior at a specific time of the year, day of the week, or even time of day. This can be used to develop unique strategies to encourage sales and customer engagement at different times. If you have an online store, this type of data can be extremely critical when executing flash sale campaigns.
6.) Better data integration
Speaking of data, having an online inventory management system linked to an enterprise resource management app or marketing automation suite gives you other exciting options for efficiently growing your business. The data on your inventory management system can be used to send automated messages to customers to encourage them to buy when stocks are low. It can also be done to allow the dynamic pricing of offers, depending on how much of a certain item is left in stock.
7.) More time can be spent growing the business
Adopting a modernized inventory management system allows you to dedicate more time into activities that generate income and widen your customer base. Ultimately, the main benefit of implementing these systems is that they allow a business to spend far less time doing all the minutiae needed to maintain an inventory. This invariably translates into more time and money being spent on customer service, product and market development, and other activities that directly contribute to the bottom line.
Updating the inventory management system is one of the easiest ways to streamline and grow a business without having to fundamentally deviate from its main strategy. Best of all, the benefits are not just appropriate for manufacturers or large retailers, as was the case with older types of inventory software. Even smaller businesses in the emerging online market have plenty to gain from adopting these online inventory management systems.