Financial issues are one of the top reasons why 30 percent of new businesses fail in the first two years!
Proper inventory management can help you avoid this and take your business to the next level. If you are starting a business or are already a business owner then you know that keeping track of the products that come in and out is an important part of your success.
However, trying to do it manually is time-consuming and can lead to failure in your business. In order to avoid all of this, you can invest in a good inventory management software.
Inventory management software will do the work of organizing and streamlining your business for you. However, not all software is created equal and with so many types to choose from you may be confused about the types of inventory management software that is available. Here is a guide that will help you make the right choice.
1. The Basics of Choosing an Inventory Management Software
Selecting the right inventory management system for your business can be a daunting task. However, it can be made easier if you ask yourself the right questions from the start.
You may be wondering what are the right questions. Here are a few of the major ones that you should know the answer to.
The first question you should ask yourself is how big your business is and the type of inventory you have. Ask yourself about your budget, this is a critical question, since your budget will determine how much you can pay for your system. You should also decide whether you want a cloud-based system or one that is solely managed from your desktop.
Once you have answered these four basic questions you will be well on your way to selecting an inventory management system that will work for your needs.
However, the question of whether you should adopt a cloud-based system or a desktop system is one that you should labor over considerably. If you are a startup business with a limited budget it will be better to start out with a cloud-based system.
This is because you usually only have to pay a fee for it to be setup. These fees are usually affordable and make it easy for you to get started as opposed to getting a system that will have to be integrated on-premises.
2. The Barcode Tracking System
The next thing you will need to look at is the type of software that is available. Here is a look at the major ones so you can decide which one is right for your budget.
The Barcode Tracking System is probably one you are familiar with since they are present in most grocery stores. These systems will significantly increase the accuracy of your inventory management.
When someone makes a purchase, the system will automatically start analyzing the usage statistics of the product. You can use this data to see which products are most popular, this will make the stocking of popular products a lot easier. Whether you have a small, medium-sized store or a warehouse, this system will work for you.
If you are making your own product you can use specialized packaging solutions that make it easy to integrate a barcode on your product’s packaging.
3. Radio Frequency Identification
There can be no doubt that barcode technology is one of the best inventions for managing inventory. However, there is still greater technology available and this is what you will encounter when you use a radio frequency identification system(RFID) to manage your inventory. You can literally move thousand of goods with ease and efficiency when using this type of technology.
There are two major types of this software available. They are classified as active and passive. Let’s take an in-depth look at how each works.
Active RFID Technology
This type of technology uses fixed tag readers. These readers are assigned throughout a warehouse. Anytime an item that has an RFID tag is passed in front of the reader its movement is recorded, this active management makes it easy to know where an item is all the time.
An active RFID monitor has 300 feet of reading range. This means that even at long distances movement can be tracked and fed into the inventory management system.
This works well in environments where inventory needs to be moved often and where there are security risks that could cause goods to go missing.
Passive RFID Technology
Passive RFID technology works by using handheld readers to monitor the movement of items. This is a useful method although it doesn’t have the reach of the active technology.
The use of this system is based entirely on someone deciding to use the reader and it can only monitor from about 40 feet.
It is important to note though that no matter what radio frequency technology is used there is often some kind of barcode management in place as well.
4. The Must-Have Features
There is a lot to consider when thinking about inventory management systems. However, the must-have features if you are just starting out are barcode scanning, so that you can instantly identify a product.
The two other must-have features are inventory optimization and report generation. Inventory optimization lets you know if you are overstocking or understocking a product.
Report generation gives you a listing of popular products. You will see which products are underperforming so that you can give discounts on them or combine them in a bundle with other products to get them to sell.
A Final Look at the Types of Inventory Management
The types of inventory management available can sometimes make it a bit difficult to make a choice. However, in the long run, the type of system that you choose should be based on the type of business you have and your budget.
This way, you will always make a choice that you can live with. Consider using cloud-based subscription payment services when you are just starting out since this will help you to see what works for you without having to invest a lot of money upfront.
