Purchasing the right inventory-tracking tools, like asset tags and bar code solutions, is the first step in the right direction for achieving a more comprehensive asset-tracking plan. But, these tools aside, the best thing an operation, whether it be in the retail, healthcare, utilities, manufacturing, education, or government spheres, can do is to devise and invest in an inventory management system.
Inventory management systems, otherwise known as IMS’s, are hardware/software-based systems that combine the latest, cutting-edge technologies with established operational procedures and processes. Although, these days, many IMS’s are flexible enough for customization, most systems include a basic set of features and functions, including asset-tracking identifiers (tags and bar codes), hardware tools for reading the identifiers (i.e., bar code scanners), documentation and reporting processes (i.e., FIFO, JIT), and, of course, inventory management software designed to gather and synthesize inventory data.
Perhaps unsurprisingly, operations that implement thoughtful and tech-savvy inventory management systems reap long lists of benefits, both financial and organizational. Let’s take a look at the 4 most impactful advantages associated with IMS implementation:
While inventory management systems are utilized in a wide range of unique industries, the retail sector is, quite possibly, the one that sees the most return from investing in these systems. Take, for example, the case presented by Emerge Blog, of an e-commerce startup that sells its product over a range of channels.
As multi-channel retail, in which goods are sold on a variety of different platforms online, and in brick-and-mortar stores, is a path that is still very much being paved, the best thing that a retailer can do is to have a firm grasp on their inventory situation. By honing an acute understanding of cycles, lead times, movement, and replenishment, from location to location, the retailer can achieve the most informed forecasts and action plans possible.
Now, let’s switch gears to the subject of loss prevention, a topic that affects all of the very industries who benefit from IMS’s. Although it’s something that not all operations are happy to admit, you’d be hard-pressed to find one that hasn’t been affected by the issue. As a matter of fact, in the construction industry alone, an estimated $300 million to $1 billion is lost annually to equipment theft alone. It’s a staggering figure, but it’s also one that proves an important case.
When the high-tech components of inventory management systems are implemented, for example, the software and the bar coding elements, operations gain awareness as to when — and sometimes where — the item first went missing. This can be done through short, second-long scans that gather key information, such as user, facility, and even quality data. Once this information is aggregated within an IMS software, users will be able to quickly identify what is missing, resulting in more effective investigations.
When all members of your supply chain can easily log in to a system to view the current levels, locations, and cycle times of your inventory, you have automatically achieved heightened end-to-end visibility, a victory that results in fewer communication errors and optimized collaboration. To make it even better, if you invest in a software that is smart enough to analyze historical data, the rest of your supply chain will be able to use this information as a more fortified benchmark in comparison to traditional forecasting.
In addition to optimized supply chain communication, software systems that give e-commerce customers a better sense of inventory levels are more likely to have them coming back for more later. According to Unleashed, customer retention thrives when IMS’s are established, as this data also prevents stock-outs, which often equate to lost financial gains, particularly in regards to new potential clients.
Sales professionals, especially those working in the precarious industries of raw materials and chemicals, are often made to make promises that can be difficult to keep for their products with the shortest shelf lives. Of course, natural salespeople are used to finessing their ways through unpredictable situations in order to make a profit, but the most powerful are the ones who use their talent to sell items with predictable lead times.
Because today’s inventory-based software systems can be accessed remotely, anytime, anywhere, these valuable sales professionals are able to carry this valuable data in their pockets, no matter how much it might fluctuate. Possessing this level of confidence brings a valuable level of certainty to traditionally shaky selling conditions.
Whether you run an established, multi-channel operation or are in the process of launching a startup, it’s important that you adopt as comprehensive an inventory management system as possible. Without doing so, your businesses runs the risk of missing out on the valuable profit that lies within your product.