What Is Computerized Inventory software?
Computerized inventory software enables the business to handle operations related to inventory in real-time throughout the day. Inventory management software helps in recording incoming and outgoing stock, materials etc.
Plus this software helps in maintaining the stock level in the warehouse by automatic addition of inventory, recording the removal and updating the stock balance.
Mostly, because of software’s easy use and accessibility makes it easier for businesses to operate and reconcile the stock position easily.
What Is Inventory Management?
Inventory management is a part of supply chain management which includes looking for procurement of raw materials, maintaining the storage of goods, controlling the goods for sale, and order fulfilment.
Note: Knowing about how to record, where to record, when to record the movement of goods from inventory becomes a complicated job but computerized inventory software makes it easier for even small business.
Moreover, inventory management is not just a part of big business, it is all premises management that is required in small or big and in different types of industries like factories, manufacturing units, wholesalers, retailers, restaurants etc.
Plus the inventory is divided into:
- Raw Materials
- Spare Parts
- Finished Goods
What Is Warehouse Management System?
A warehouse management system refers to all the activities and operations which take place from procuring raw material to the supply of finished goods. As the warehouse management system is a wider concept than the inventory management system. However the purpose of both of them is to have smooth functioning, that’s why the computerized inventory software is used.
So, a warehouse management system works in different levels and different directions, here are the different functions of a warehouse management system:
- Maintaining and gathering correct equipment for inventory
- Gathering and managing inventory in a warehouse
- Collecting and packaging of new stock or order
- Assembly of new stock
- Tracking and analysing warehouse performance
Warehouse Management System VS Inventory Management Systems
|Inventory Management Systems||Warehouse Management System|
|Track all inventory across all locations.||Track stock movement and locations within a warehouse.|
|Provide an overview of all inventory.||Generate reports on stock status.|
|Focus on maintaining inventory levels to fulfil projected orders.||Focus on picking, packing and shipping stock.|
|Provides information to calculate sales trends, profit margins and holding costs.||Analyzes sales trends, profit margins and holding costs|
Advantage of Computerized Inventory Software
Computerized inventory software helps the organization to manage the inventory and to reduce the complications from the process and making inventory management more effective and efficient. So, here is the different advantage to the organization from computerized inventory software:
Automated In-Stock Information
Computerized inventory software helps the employees to let them know about the stock position, place etc. As the inventory system is synced with the organization sales and purchase system. So, the inventory system automatically adds and reduce the inventory whenever any purchase or sale respectively is made.
Plus it helps the organization to reconcile the stock position for the duration of yearly, quarterly, monthly, weakly, daily even in real-time.
As a result, it will take only a few seconds to evaluate any product availability in-stock position.
Integration With Accounts
Secondly, the inventory position and value of stock need to be updated in books for accounts. So, one of the advantages of computerized inventory software is the integration with accounting books.
As result of the integration of accounts and inventory software helps the organization to transfer and analyse the inventory cost. Plus it reduces the cost for bookkeeping and the cost of analysing the stock evaluation and updating them in the final statements of accounts.
Forecasting and Planning
Planning for raw material purchase, forecasting the demand for goods and planning of production is some of the key factors of the warehouse management system. So, a computerized inventory software helps in tracking the inventory and establishing the patterns for purchase of raw materials and correct holding time of stock.
A big organization saves millions of dollars by just planing and forecasting the correct time, quantity and product of purchase.
Forecasting of inventory management is analysing the purchase of raw materials, holding of the stock. Whereas, planning refers to creating plans and patterns for such activities.
Quick, Accurate Counting
Another advantage of computerized inventory software is the ease ad accuracy of counting. As the user only have to update the purchase of raw material at arrival and according to production capacity, the software will automatically calculate the goods in work in process and finished goods.
As a result, it provides accurate and there will be no need for the user to calculate the inventory manually. The work for calculation becomes and analysing becomes easy and convenient.
Easy Loading and Unloading
Easy loading and unloading are referred to the racing and sending of goods. So when an organization receives delivery for raw materials or spare parts or components an employee only have to update their purchase account in the accounting system. Afterwards, computerized inventory software automatically updates the inventory.
And, in the case of sales when an organization generate a bill to a customer or supply order it automatically deducts an equal amount of inventory.
Reduced Shrinkage and Missing Inventory
Every time an organization evaluate the inventory there is always some units that are missing. Because of several reasons like product breakage, stollen, administrative errors etc.
According to figures from a 2017 National Retail Federation survey, they account for a combined total of more than 26 per cent of shrinkage, which can add up to real money.
But a computerized inventory software helps in reducing these numbers as an organization controls the number of products and can analyse the reason for such problems.
Better Inventory Management
With a computerized perpetual inventory system, you’ll always know your inventory levels with just a glance. You may be able to carry less inventory or even go to a full-blown, just-in-time inventory system, with product arriving from your vendors as it’s needed. That can represent a real cost saving.
Real-Time Management Information
Computerized inventory software helps employees to check the inventory levels in real-time. As it helps the administration to check the inventory levels in real-time.
For example, the sales force while working in their field job they need to be updated with inventory levels.
Plus, it makes the job in the administration of analysing, purchasing, selling and marketing activities much easier.
Disadvantages Of Computerized Inventory Management
Besides the excessive use of computerized inventory software and its multiple advantages, it still consists of many drawbacks. So, now let’s understand the different disadvantages of computerized inventory software.
A very common disadvantage of computerized inventory software is the system crash. As the world face this exact problem with each software and the system in the world. That there is a possibility of the system getting crash and user gets all their work get removed within a second.
So there is always a need for a more advanced mode of working in an organization like CRM in cloud computing.
Another serious disadvantage of computerized inventory software is the hackers which are all over the world. An inventory system connected to point-of-sale devices and accounting is a valuable resource to hack into in search of potential financial information or personal details of owners, vendors or clients. Updating firewalls and anti-virus software can mitigate this potential issue.
Reduced Physical Audits
After everything is automated it will make the process of auditing real simple. As the entire process of inventory management becomes automated. So, the process of physical audits and supervision reduces. Which can cause a reduction in product quality or an increase in incidents in the warehouse.
However, it becomes really important for an organization to conduct regular physical audits.
Warehouse Inventory Management Software
So, to understand the computerized inventory software lest understand the different examples of warehouse inventory management software:
Square for Retail
Square for Retail is a cloud-based retail management and POS system that helps businesses manage online and offline retail operations. Key features include website builder, inventory management, order management, checkout and payment management, and reporting.
Zoho Inventory is a cloud-based inventory management solution that features inventory control, warehouse management, multichannel selling, and order management.
Fishbowl Inventory is a software company found by David K Williams with its headquarters in Orem, Utah, US. This system is suitable for any sized organization. This company provides manufacturing and inventory management solutions for QuickBooks.
NetSuite WMS helps in streamlining warehouse and manufacturing operations. It helps the users in performing major functions of the warehouse-like receiving, storing and shipping of goods. NetSuite is the product of Oracle.