Are you tired of losing money due to inventory blunders?
Businesses that stock products are familiar with the harsh reality. A stock shortage is one thing, but a surplus is even worse.
Your company’s faulty ordering systems and stock miscalculations are eating away its revenue. And probably its profits.
It’s a vicious circle that needs to be broken at the earliest.
Don’t fret. Inventory optimization software is here to come to the rescue.
This article covers the best inventory optimization tools and how they can transform your business.
Here’s what this covers:
- The Shortcomings of Old School Inventory Techniques
- The Hidden Mechanics of Inventory Optimization Software
- The REAL Advantages of Inventory Optimization Tools
- Tips to Choose the Best Solution for You
The Shortcomings of Old School Inventory Techniques
Guess what?
The stock shortages and overstocks are causing American companies a yearly loss of 11% of their revenues.
Here’s the harsh truth — it’s your money going down the drain.
According to the latest studies, Inventory Optimization Software is giving the entrepreneurs a helping hand to get the supply chain systems in order.
Before diving into that, it’s important to talk about how the manual approach to managing and forecasting an inventory system can harm your business.
Manual work is Outdated in the Modern World
Let’s see something really mind-blowing…
It turns out, 67.4% of supply chain managers are still using Microsoft Excel to manage their inventory. Just spreadsheets.
It’s crazily insane and it’s hampering their businesses.
Tracking and managing the inventory manually may have been tolerable a decade ago.
But in the current market, it’s a complete nightmare. You are running after ever-changing demands, typo errors, and making decisions based on your intuition and gut feeling.
The consequence is shortages when you are really in need of the products and an overflow when you are not in need of them. Your inventory system has a good opportunity to burn your money!
How Inventory Optimization Software Actually Works
Inventory optimization software is not at all a magical application that works with some form of voodoo. Inventory Optimization Software works by using some sophisticated algorithms.
Sound fancy? It is fancy!
In layman terms, here is how it works:
The system is not dependent on wild-guesses or solely on last year’s patterns, as it would have been the case in the old school methods of inventory management.
The modern software tools take into consideration various data points, to name a few:
- Sales trends
- Seasonal and festive periods
- Supplier lead time
- The market itself
It’s a jungle out there and it would be really difficult for an entrepreneur or an inventory manager to singlehandedly manage the jungle and stay on the top.
Leading solutions with Netstock give you real-time visibility into your entire inventory across multiple locations, making it easy to see what’s moving and what’s collecting dust.
The REAL Advantages of Inventory Optimization Tools
Inventory management can become a boon for your business and not a bane.
What? Inventory becomes a good and not a bad thing? Yes, but only with the help of the right optimization tools.
So here’s what happens to your bottom line when you work smart with these inventory solutions.
You make more money.
Your cash flow improves beyond your imagination and here is why?
With the right tools in place, you don’t have any superfluous items which stay for months in your store and also you don’t have any out-of-stock notifications on your website that turn away potential and even prepared-to-buy customers.
You order the right amount at the right time.
Your clients are delighted with you.
Sales go through the roof and customer service also takes a great leap.
You have lesser stock that needs storage spaces. You need lesser employees to attend to the stock you have.
Your rent is not rocket-high because you need lesser space for your stock and the insurance rates are also much more reasonable.
Businesses are turning to inventory optimization software and spending money on them left, right, and center. Why? They have experienced the benefits.
In fact, the inventory optimization software market is estimated to reach a valuation of 8.2 billion by 2031. Talk about seeing the benefits!
Demand Forecasting That Doesn’t Bite
Here’s one of the biggest game changers when it comes to ordering the right amount at the right time.
Old school demand forecasting took into consideration sales that happened last year and came up with some weird results that had nothing to do with reality.
The modern inventory optimization solutions use the power of machine learning to predict future patterns.
Sounds futuristic? It sure is! The system scans through all sorts of patterns that the human eye would fail to observe.
Such patterns are:
- Seasonal fluctuations and even festive periods
- The economy
- The market as a whole
- Events happening around the locality or even beyond
- Competitor activity, how are they managing their demand and what is the pricing that they are offering in the market
Look at that! With such a forecast in place, how can you still miss what customers want?
Multi-Location Management Made Easy
You have an inventory that is split among multiple locations.
Managing one warehouse is difficult. Multi-location inventory is nightmarish if you don’t have the right tools in place.
A solution such as inventory optimization software is just the thing that can give you a sky-high view of your entire inventory, where the products are and where they should go next.
Take control of your inventory by automating stock redistribution between multiple locations.
Move items from one store where they are not selling well to another location where it is flying off the shelves.
The optimized route cuts down shipping costs, storage expenses, and even delivery times.
Tips to Choose the Right Solution for You
A buyer beware moment, here is something to keep in mind while choosing the inventory solution for you.
Do you run a multi-billion-dollar company or a start-up? There are different tools for different needs.
A tool that you choose must integrate seamlessly with the other software that you are already using. Inventory software should be able to liaise with your accounting software, your e-commerce website and even your WMS.
A tool that does not allow real-time analysis is like a donkey. Don’t fall for the horse in the donkey skin. You want something which will show you real-time data not what you lost or gained a month ago.
Go for a solution that your employees will be able to figure out the controls easily and implement the recommendations offered by the software.
Cloud Based vs On-Premise Solution
Most inventory optimization software is cloud-based. That is to say that it is in the clouds. They give you the flexibility to access your data anytime, they also come with automatic updates and you don’t have to pay much in the beginning.
On-premise software, on the other hand, gives you the ability to control your data, but they take a lot of your IT resources to maintain them.
Cloud-based software would be your best pick if you are an average company.
Wrapping This Up
Inventory optimization software market is growing by leaps and bounds.
What is one major reason that this market is so popular? Simple, businesses are fed up of losing so much money to poorly managed inventory.
If you are stuck with using spreadsheets or otherwise inefficient systems, you are not making the most of your money and chances are that you are also losing it in many ways you don’t even realize!
Start by working out your current inventory issues. Where do you lose more money? Shortages or Surplus? Slow-moving items?
Use these insights to help you find a tool that works best for your company.
Try a few options. Most vendors give you free trials or even demos.
Inventory Optimization Software will not only help you save some money but also totally revolutionize the way you run your business. You will have better cash flow, happy customers and a supply chain that runs as smooth as it should.
And that’s a win worth pursuing.
About Author
