8 Must-have Inventory Management Features

If you're a retailer or run an eCommerce business, inventory management is one of your core business functions. No retailer can function without offering goods to buy to customers. And no retailer will survive if they constantly run out of the goods that they're offering to buy on their website.

But finding the right inventory management system for your business is no simple task. So if you know what you’re looking for in an inventory platform, you'll simplify this task considerably.

In this article, we will look at 8 core features that you have to consider when considering the different inventory offerings available in the market. Each one may not be essential in its own right—but they have the ability to revolutionise and streamline your inventory management to a degree that you might not have thought possible.

So take your time in considering your options—and don't forget to keep these 8 features in the back of your mind before making your final decision.

1. Automatically tracking inventory levels

The core functionality of any inventory management system revolves around keeping track of stock. You have to be able to know the status of all the goods, materials, and finished products you have available throughout the entire supply chain.

The goal is to automate these tracking services. Manual systems won't be able to give you the up-to-date, constantly updated inventory tracking that you need to do proper inventory forecasting and management.

You need a system that will be able to automate the most repetitive, error-prone inventory tasks for your team. As an example of inventory automation, the system could be set up to instantly generate tracking numbers when an invoice or receipt is issued. This saves valuable human resources that could have been spent on more specialised functions.

The benefits of automatic inventory tracking are significant. For one, you would be able to communicate accurate inventory numbers on your webstore and in your interactions with customers. Which means that when a customer clicks on the buy button on your website, the item they bought was definitely in stock at that time. The item can then be shipped out to them in short order.

Once the product is shipped out to the customer, they will also receive an automated notification. The result is better service,  happier customers, and better customer retention.

2. Automated inventory barcoding

Another feature that will be a great boon to your inventory management effort is inventory barcoding. Instead of manually creating SKUs and labelling products—or handwriting product codes—these can be automatically produced by the system.

Barcodes are a fantastic way to manage and track inventory. The benefits of automated barcoding is that it eliminates human error that is the inevitable result of manual stock taking and inventory data entry.

Another significant benefit is that it allows instant, automated communication between different parts of the inventory management system first when a barcode is first issued for a product, and then every time it is scanned.

When all your inventory data is digitised and controlled from a centralised system, you ensure data integrity and consistency. Which means that any time you have to perform a physical action with stock—such as taking in new inventory and collecting the inventory data into the system, moving the stock to a different location or shelf, or picking and packing items for shipping, the system is automatically notified and updated.

The result is cohesive inventory operations. By issuing relatively inexpensive barcode scanners to your warehousing and shipping staff, the accuracy of your inventory numbers are instantly improved.

When you have to restock items, the process is much more seamless and hasslefree—and speedier too boot. Which means you will finally be able to eliminate reams of paperwork that has traditionally been associated with inventory management and stock taking.

3. Inventory data analytics

With an inventory management system, all inventory activity is digitised and tracked by a centralised system. Which means that a constant flow of data is generated that can be processed and analysed to produce valuable business insights and inventory demand forecasting data.

In the last couple of years, the large retailers have started to rely heavily on analytics in their daily decision-making and planning activities. This is because analytics is an invaluable tool to get an understanding of your customers base and their shopping habits, as well as measure the performance of the different processes in your business.

Your inventory management system needs to have the ability to process this data and present its analysis in an easily understandable and digestible manner. The system must present data in clear, easily understood charts and updates to give business managers and decision-makers a coherent picture of what's happening on the warehouse floor.

To aid in this regard, many inventory management solutions make a number of preset data reporting formats available. The goal is to process inventory data into essential business metrics.

The more sophisticated systems give you the option to customise this reporting system to focus on specific data sets and prioritise those business insights that are particularly important to your industry and management style.

4. Constantly updated inventory numbers

One of the most useful functions of the modern inventory management system is its ability to constantly update your inventory data. Which means that if you request the latest stock numbers for a particular item, you will always get the latest information.

All inventory counts are perpetually updated to give you live numbers. You will always know the stock numbers for your whole inventory at any moment in time.

This gives unprecedented control to inventory managers—who have previously had to make do with manual stock control processes. These included scheduling regular stock taking days where all or parts of the stock was assessed and counted by hand. These stocktaking events would take place on a monthly, weekly, or even daily basis.

Manual stock taking has several disadvantages. Firstly, the stock numbers are always subject to human counting errors. Items might be misplaced, mislabeled or miscounted. Another disadvantage is that your stock numbers are only as accurate as the last time the stock was physically counted.

Constantly updated stock numbers are always superior to manually produced stock numbers—especially if you run an online store. For one, it eliminates the possibility of a customer ordering an out-of-stock item.

Since you keep constant track of your inventory numbers, you will be able to keep a constant oversight over product and raw material levels. Now it becomes possible to restock before any item runs out and always meet customer demand.

5. Technology integrations

One of the most important features that you have to consider when looking at inventory management systems, is whether the software will be able to integrate with the other technology platforms you employ in your company.

Usually what happens in a modern retail or manufacturing company, is that several technology platforms are used to run different aspects of their business.

You want any inventory management system that you deploy in your business to be able to connect with those other back-end applications. This means that the inventory management software should have the capacity to seamlessly pass data on to those other platforms, while also receiving data syncs from those technologies in return.

The alternative is manually passing data between your different systems. This is both time consuming and error-prone and will cause irritating delays in your order processing, business management and accounting workflows.

Typically in any business, the inventory management software has to share information with your warehousing software. Another benefit is if the system is able to share information with your vendors and suppliers, as well as your purchasing systems.

The result is a supply that is truly streamlined and well-managed, saving you time and money and avoiding costly inventory-related mistakes.

6. Ease of use

Business managers often overlook the impact the usability of a piece of software can have on its overall usefulness in your company.

In the end, all software has to be used by human agents—the members of your inventory management team. How long is it going to take them to learn the ins and outs of this new software? If it's going to take days, weeks or even months for them to master, the software might just not be worth your while.

When you evaluate different inventory management offerings, don’t limit your consideration to cost. If the system isn't easy to use and simple to understand, you will probably never achieve the full benefit of everything the software could offer your company.

Software cannot be used efficiently if its usability is subpar. Your goal should be to simplify your inventory management processes, not complicate matters. If the software comes with a sharp learning curve, it will cost you time and money both now and throughout the lifecycle of the platform.

7. Quality of after-sales support

Don't underestimate the value of quality support when investing in a new piece of software. Often it's one of the most crucial factors which determines whether a system will be successfully deployed in a company or not.

When your team members run into any kind of problems in both the deployment and running of the software, you need to have a direct line of communication with the vendor to get help.

Without proper support, the issues that your team members experience with the software will probably go unresolved. Which means  a member of your inventory management team won’t be able to access a particular purchase transaction or create a new stock level notification. Is that what you want from your brand new piece of software?

The problem of a lack of after-sale support goes further than just wasted time and lost effort. You will be creating serious bottlenecks that will affect your entire supply chain.

Be sure to check the type of support the vendor is able and willing to provide once you purchase their product. Support should include some form of staff training program. Find out if the vendor provides a warranty to ensure that the technology functions satisfactorily in your company.

Does the vendor make assistance available on a 24/7 basis? These are important questions to take into account when considering various inventory control packages and vendors.

8. Future growth potential

No project manager has unlimited funds available when they have to decide on a piece of software. You want to choose a technology solution that is both cost effective on the day of purchase, as well as technology that is designed to adapt and grow as your business expands.

Which means you should not only consider the current functionality of the program, but also the future iterations and promised updates to the software.

Furthermore, some vendors give upgrade options with extra features that you would be able to deploy as your business needs evolve.

Choose technology that will be able to scale as your company grows. Don’t only look at the current features that an inventory management package offers your company. Also consider the future capability of the technology to expand.

If the software is able to meet both your current and future needs, you're well on your way to make the deployment of that technology a success in your company.

Conclusion

Inventory management systems have revolutionised the field. This is because they give managers the ability to automate and control all of their inventory management functions in an intelligent and proactive manner.

Inventory management systems have helped companies big and small to transform the way they handle inventory. It’s software specifically designed to improve the efficiency of all your inventory management processes. It will automate those tedious, error-prone processes that used to cause all of the inventory problems in your business.

Which is why it's a shame that so many business managers only wait until their inventory management devolves into chaos before considering making the shift to digital inventory management. Why wait until you regularly have to deal with missing inventory, stockouts and order fulfilment delays before investing in a software solution?

With the right inventory management technology in place, you will experience more efficient processes, fewer stockouts, lower costs, better profit margins, and ultimately higher customer satisfaction numbers. Which means the benefits of this technology will more than make up for its cost.

Inventory management systems are a remarkable way to improve the daily operations of your business. It will end up saving you money and remove several obstacles to business growth. Which means you will be able to direct more time and resources to the future success of your company.