Features to look for in an inventory management system
Stock is frequently the most expensive asset a business owns. Overstocking ties up funds that the business could be using more effectively and exposes the business to the risk of stock obsolescence; under stocking means that sales are delayed, customers lost, and profitability is reduced. A strong inventory system is the lifeblood of any business heavily involved in using and selling products.
But modern businesses are moving from inventory management systems that are purely about recording stock levels into systems that allow speeding up of operations (ordering, receipting, putting away, transferring and picking) and that use predictive automation to maintain stock levels at the optimum quantity per SKU.
There are many applications available to help business manage their inventory. There is no one perfect solution for all businesses. It will depend on what combination of features your business is looking for as to which system will suit you best and the industry you operate in.
So here is a list of some features that you might need for your business. You can use this to help you assess whether the inventory management system that you are considering is suitable for your requirements. And of course, you might want a lot of these features, but you might have a budget that just can’t stretch to all that you would like. Not all the features listed are essential for all businesses – it depends on the size and complexity of the business processes as well as the specific industry you operate in.
Stock impacts purchasing and sales, some of the features that are associated with these functions also are related to stock.
- Integration with some common eCommerce sites like BigCommerce, WooCommerce, Shopify
- Barcode capability – to scan stock in as it is received, moved and picked, to be able to scan different units of measure
- EDI capability – capturing orders from other systems without having to rekey data
- Excellent and customizable reporting – ability to report on your key indicators for example stock turns, slow moving stock, profit per SKU per location, predictive stock reports
- SKUs being able to be bought and sold in different units
- Multiple sites, warehouses and locations tracking
- Separate picking, pick lists/shipping processes to the sales order process
- Economic picking sequence so the pick speed is maximised
- Radio Frequency Identification) – to identify and detect individual products. RFID tags are serialized, enabling unique identification of each item to quickly find, pick, ship and invoice stock
- Customer Shipping or integration with shipping websites
- Complex pricing rules – for example, pricing for different weights, different customer locations, for different customer types, for multiple quantities, for specials with specific time frames
- Container and pallet management – enabling optimum packing of containers and barcoding of container contents and details
- Ability to easily capture additional costs of stock coming in – freight and import costs
- Multiple types of costing – e.g. last cost, average cost, LIFO, FIFO, item specific, standard
- Batch tracking
- Expiry date tracking
- Serial tracking
- Stock recall
- Warranty tracking -both with suppliers and for customers
- Ability to automate the purchase ordering process so that optimal stock levels are maintained, and sales orders fulfilled, over a specific time period into the future, plus factoring in lead times
- Automation of purchasing from the most cost effective /preferred suppliers
- Ability to override automation results
- QR codes – enable fast identification of stock but also enable large amounts of information to be stored against the product and can also be used to link to information on the cloud. For example, record detailed notes on product usage and specifications in the QR code so that the client scans on delivery and accesses the information
- Stock that is inventoried or ordered on demand
- Ability to import and export data easily
- Tags or categories for multiple attributes of stock e.g. colour, brand, supplier
- Mobility – use of smart phones, ipads
- Identification of products that are frequently ordered together
- Negative stock options – by sku, by location, by site, by warehouse
- User security – including being able to block access to buy pricing and costs
- Back order reporting and management of priorities of distribution of shipments received to back orders
- Purchase and Sales returns process – being able to create a return authorization and tracking of reasons for the return
- Features to enable speedy order entry – templates, copying of prior orders, access to customer and supplier history,
- Predictions of fluctuations in stock requirements e.g. based on seasonal fluctuations, past history, forecasts
- Real time visibility of stock
- Identification of put-away locations
- Industry specific requirements e.g. manufacturers need systems that manage raw materials, interim products, finished products and that organize the manufacturing process; clothing businesses need systems that manage sizing, style, season complexities; retailers need systems that allow for a POS for speed.
- Management of buying contracts – pricing, quantity breaks
- Lifetime history of stock movements, costs and pricing
- Quarantining of stock and maintenance of stock for specific purpose or customers
- Ability to produce kits, factoring in components and labour costs
- Alerts for stock falling low or being overstocked
- Ability to freeze stock levels for a stock take, so that other normal functions can continue to be carried out
- Easy stock take options – single product, groups of products, total inventory, use of remote devices to capture stock count
- Identifying obsolete stock
- Dealing with stock alternatives
If you are interested in exploring which inventory system would suit you best, call 2 Peas on 03 9939 4480.