For many industries, revenue can be lost and cash flaw can be disrupted if firms do not have the right inventory technology. As companies grow, their inventory management needs become more complex. Organizations may operate from several warehouses because a longer supply chain is needed to support a larger business. When adapting to new models, such as ecommerce, firms need inventory management software to maximize efficiency.
Inventory shortages and overstocks can cost retailers a large amount of money every year, and companies could increase sales if inventory management was improved, according to Multichannel Merchant. However, many firms are focusing on their consumer-facing operations without realizing inventory management problems are an issue that can impact customer service. Consumers want to be able to purchase goods through an omni-channel approach, giving them the option to buy products online or in the store, but this can create more disruptions in inventory. New innovations on the supply side of operations can help retailers succeed in omni-channel strategies.
Why retailers need inventory software
Advanced inventory software can help retailers solve a number of challenges to improve some supply chain functions. As many retailers start to offer niche products, they can find inventory technology that will meet their unique needs and help them stay competitive, Business 2 Community stated. Some inventory management solutions help firms make the most of bar-coding and radio frequency identification technology. RFID is helping to make inventory counts much more efficient, which can prevent shortages. If retailers manually record and enter hand counts of items, there is a much higher chance for errors and it is time-intensive. Using bar-coding and RFID can increase accuracy of counts.
Some inventory management software includes the ability to track an item's movement, which can help managers identify inventory problems and the causes, including theft, lost items and stock damages.
For a multichannel approach, the same pricing may not apply, and inventory software can help firms apply volume discounts. This isn't necessary when companies offer a smaller range of products, but as product offerings grow, it is more challenging to manage volume pricing and discounts, Business 2 Community said.
Consumers enjoy having choices in how they shop, and instead of being exclusively a supply issue, inventory management technology can help retailers better meet their needs. Retailers can adopt an omni-channel approach without escalating costs if they improve inventory management.