An automated inventory management system assists businesses in streamlining multiple backend inventory control operations, including stock count, order fulfillment, purchase orders, shipping, and others.
Implementing an automated inventory management system is a significant business step towards process automation that helps them to improve efficiency and productivity. The automated inventory control system also allows businesses to streamline inventory control at multiple locations to enhance the efficiency of processes and reduce errors.
What is Automated Inventory Control?
Much like an ERP system (read more about our ERP systems here) that automates various business processes, an automated inventory system is specially meant to automate the inventory control process for businesses. The system can take over the redundant inventory management tasks, lowering the error chances and improving efficiency.
Today, inventory automation is implemented by wholesalers, distributors, wholesalers, and ecommerce stores to streamline their inventory management operations. Initially, these systems were mainly targeted for large enterprises with a big budget and complex multi-layered inventory. However, today automated inventory management systems have become a necessity for even SMEs. Also, the availability of various affordable systems like Dynamics AX inventory management enables companies of all sizes to leverage the power of automation in creating efficient and productive inventory management processes.
Benefits of an automated inventory management system
Inventory management system brings in multiple benefits for businesses, which aren’t just limited to the inventory control processes but the entire company. For instance, with a robust automated inventory control system, the sales team is updated about the available inventory stock, whereas the marketing team is also considerate of the items that need to be marketed on priority and items which are depleted. These systems also give real-time insights into inventory data to the company’s C-suite.
Let’s take a detailed look into some of the benefits offered by automated inventory management system;
- Real-time inventory tracking
The automated inventory management system’s biggest and most apparent benefit is access to real-time inventory count data.
With a robust automated inventory management system implemented, managers can keep up with the available stocks and make timely decisions. The automated inventory control software is able to update the inventory count in its system consistently; thereby, you always have a definite and accurate count of inventory available.
Also, the higher accuracy of stock count through an automated system means there is a low requirement of performing manual stock counts, which may only be performed occasionally to check for potential losses. Furthermore, implementing an automated inventory control system makes it easier to track and update inventory stocks spread across multiple warehouse locations, which otherwise can be cumbersome.
- Reduces human error
Manual operations are always prone to human errors. Contrarily, with the automated inventory management system, businesses can rely on the accuracy of the data they receive. The system consistently updates inventory data “as and when” an inventory item is dispatched or restocked, thereby reducing any error chances in data entry.
- Time savings
An automated inventory management system doesn’t only help reduce the data entry errors but also significantly improve the efficiency of the inventory management process. The system minimizes the need for human resources required to manage spreadsheets. Also, with the automated system being placed, the available human resources are able to free themselves up from redundant tasks and contribute more value to the business by streamlining other inventory systems or purchasing methods.
What are the features of automated inventory management?
The functionalities of an automated inventory management system vary by the type and plan of the software you choose. However, some of the standard features which you should see in all modern automated inventory control system includes;
- Stock reordering
Any robust inventory management system would enable inventory control managers to set a minimum threshold for inventory stocks. This means that once the threshold is reached, the system will automatically place a purchase order for the specific item (for the preferred restock amount) with the vendor.
- Barcode scanning
The barcode scanning feature enables store managers to easily run an inventory count to add an item manually without having to enter all the data. The software, in this case, can take the SKU and other data of all the items through barcode scanning to speed up the procedure.
- Real-time data monitoring and forecasting
Inventory forecasting and reporting is yet another standard feature that helps businesses get real-time insights into their inventory stocks. The reporting tools give an accurate picture of what items are being sold, which are not getting sold, and other performance parameters. If not for the automated system, such analysis would take hours on excel sheets to understand the patterns.
All of this data can be used by C-Suite managers to understand the performance of the business, forecast future performance, and make adjustments where required to optimize sales.
- Run multichannel inventory tasks
Modern inventory management systems are able to connect with multiple sales channels managed by businesses such as POS systems or ecommerce stores. This means that you can now continue to make sales across multiple channels without worrying about record updates and other inventory management tasks.
- Manage inventory control at multiple locations
Automated inventory management systems not only support multichannel inventory but also supports inventory tracking across multiple locations. This is ideal for growing businesses with warehouses located in different states or even countries. The software would be able to continuously monitor and update inventory products by tracking them on multiple locations, ensuring that you stay updated with the inventory stocks at all times.
- Order fulfillment automation
While this isn’t a standard feature, many advanced automated inventory management systems also offer an order fulfillment system. The order fulfillment system assists businesses with printing shipping labels, assigning tasks, tracking orders, and performing other tasks related to order fulfillment.
How Does Automated Inventory Control Work?
Inventory control management software integrate existing business systems to understand the sales patterns, make inventory forecasts, and perform inventory check for depleting stocks.
Integration of inventory management system with POS enables business leaders to gain insights into the business operations and performance. The integration with the POS system also allows the software to generate insightful reports depicting sales patterns, promotion performance, profit margins, and other key parameters.
This subsequently delivers the marketing team crucial insights into the underselling and overselling items and the profit margins of each item. The report also highlights the performance of promotional campaigns, thereby helping them to create more effective and targeted campaigns to maximize sales.
The insights from the inventory management system can also be integrated with demand forecasting service, which ultimately helps businesses predict sales trends by identifying customers’ buying behaviors. Some of the modern automated inventory management software are also capable of generating automated purchase orders. This can be achieved by programming the software and setting a minimum “safety stock” threshold for inventory items. Once the threshold is reached, the system automatically sends a purchase order of the desired limit (preset in the programming) to the preferred vendor.
The automated inventory management system is the smart solution that helps retail, wholesale, distribution, and ecommerce businesses to streamline their inventory management processes. These software are ideal for businesses of all sizes to effectively manage inventory stocks by increasing the efficiency of the inventory operations and lowering the chances of errors.
The only consideration is to choose the right system that offers you the right features and functionalities you want for your specific business needs. The final price of the system will depend on your choice of solution and business requirements. You can also choose cloud-based systems delivered as SaaS software solutions and are ideal for businesses looking for more flexibility, scalability, and affordability.
What is an automated inventory management system?
An automated inventory management system refers to the specific software solution meant to streamline and automate a range of inventory management tasks from Purchase order creation to inventory count, stock reordering, inventory tracking, etc.
What are the benefits of an automated inventory management system?
With an automated inventory management system, companies get to optimize their inventory management function by reducing the amount of time required to handle administrative tasks. The software solution also helps optimize the supply chain function, ensuring that you are never out of any stock or spend unnecessarily on tied-up inventory. All of this leads to a more efficient and cost-effective inventory management process yielding more significant profits.