What are the Types of Inventory Management Software?
There are generally two types of inventory management software.
- Periodic
- Perpetual
What is periodic inventory management software?
As the name suggests, this type of software is used periodically in order to manage your inventory. In this, basically, a person or a team of people count the total number of products in the stock periodically, such as quarterly, semi-annually, or annually. Then the quantity of each product is recorded in the database of the inventory management software and compared to the data of the last period in order to determine the changes in inventory.
This kind of technique is really efficient for small businesses however if your company has to deal with millions of products, in that case, this technique may not work properly as a huge amount of labor and money would be spent in determining the size of stock. Instead, you can use any advanced technology such as bar codes.
What is perpetual inventory management software?
As explained, the periodic inventory management software determines the changes in stocks periodically. But if you need to get updated after every single change in the stock, in that case, you can go with Perpetual Inventory Management Software.
In this technique, your product’s packet will contain a barcode scanner. That barcode will be scanned whenever the product is received, scrapped, relocated, used, or sold. This is usually done with the help of barcode scanners. This technique is highly efficient for a large number of products and can also track details such as the location of the product, delivery status, SKU counts, etc.
When fully automated, perpetual inventory management software also reduces the labor hours needed to track inventory. This saves a lot of money for the company. Subsequently, the constantly monitored inventory data can be used to take some major decisions regarding the company’s marketing strategies.
Though this software may sound exciting, they come up with their own challenges. The cost required to run a perpetual inventory management system is significantly higher than that of periodic inventory management systems. It also requires perpetual inventory management software, barcode/ RFID tags, and barcode scanners.
Also, the barcodes need to be scanned whenever the state of a product changes. When a product is skipped, it won’t get reflected in the database of your company. So, a significant investment is required if you want to bring this system into your company. Additionally, you will also need to spend some resources on staff training.
What are the benefits of inventory management software?
An inventory management software helps you solve lots of inventory-related challenges like
- Reduced risk of overselling
- Greater cost-savings
- Avoidance of stock-outs and excess stock
- Improved business negotiations
- Better product visibility in the event of a recall
- The ability to make more profitable business decisions
- Simplified inventory management
Typical features of inventory management software
- Barcoding & Scanning
A barcode is a visual, machine-readable data display that uses a scanner. The information contained in the barcode is usually tied to something, such as SKU, lot number, customer shipping, or purchase order. When scanned, this data is available and displayed to the user to read more details or take action. Bar code functions can be provided by the WMS vendor, but the design application needs to support usage
- Improved, actionable inventory analysis
Given the large number of products and SKUs that most companies have, the sales and procurement departments must find time to address the required actions while staying on top of some of its functions. If there are data dashboards, how effective are they? Does the plan identify the purchasing agent or supply chain manager where the products will take action? For example, will the system mark potential stock outages; calculate recommended purchase orders; and those who want extreme closure? If not, will you need to upgrade these management tools? How do potential programs better support market research marketing activities or shopping activities? These features include having the first and second product vendor data elements; department and product classification; and being able to place vendor-driven features in product records such as notes and data analysis.
- Configurability
This feature allows one system to be set up and configured for two different business organizations/companies so that each has a different “look and feel” or personality. In this way, complete systems are successfully used in all industries and sales without customization.
- Integration and Interfaces
In most systemic cases, Inventory Management Systems and Warehouse Management Systems (WMS) are two separate systems. They have to be tightly integrated to stay in shape from a data and time perspective. Many businesses find a solution by making Inventory Management work as a “management” asset management system. In this model, WMS acts as a “second” system, which provides and manages data from the asset management system. Some vendors can offer all asset management and WMS in one app.
- On-premise versus Software as a Service and Cloud system
For many companies, cloud-based and software-based (SaaS) subscription services make asset management systems cheaper than basic deployment and support systems because they are based on the number of users and the use of data storage. In addition, implementation can be achieved on time because it is a service that requires less IT internal space. The key question here is what is the right IT strategy for your company?
The cost of inventory management systems
Depending upon the type of inventory management software, the size of your business, and the software plan, the cost of inventory management software greatly varies.
Considerations when purchasing inventory management software
- The Cost of the Software
The price of the software will depend on how difficult your needs are. You need to find the market price of the software, to determine if the price offered by the seller is worth it or more expensive. Before investing in asset management software, you should make sure that your business’s finances are stable enough for a significant plan. Examine your budget and ask yourself; Is this the right time to invest in technology?
- Your Own Requirements
Before you decide to purchase an asset management plan, you need to understand your needs first. Find out the challenges you face in managing the inventory and solutions you want. Ask yourself, for example, what do you like; Do I want to be able to monitor the status of the post? Do I just need to follow up on the founding standards? Explaining your needs to the seller will help you get the right price faster.
- The Customization
If you have very complex definitions, then you may need to customize your asset management plan. Ask the dealer if the software can meet your specific needs and how long it will take to customize it. If you currently have an asset management system and need a new one with additional features, make sure the new system can be easily integrated with an existing one.
- The Usability
This point is often overlooked by business owners, while in reality, usage determines how effective an asset management system is in your business. If it takes hours for your employees to learn the ins and outs of the software, it may not be worth buying. Remember that you are looking for a solution that can help you simplify your asset management, so choose an easy-to-use replacement solution.
- Integrations with Other Systems
You may not have thought of integrating your asset management software with other software tools, but you may need to integrate as your business grows. In addition, asset management is very close to other areas in your business. These days, many startups have used up to four software systems to simplify their business processes. Therefore, it is important for you to make sure that the software you choose can be easily integrated with other programs. Asset management systems are often integrated with asset management, accounting, eCommerce, and procurement systems.
