Last Updated on September 19, 2023 by Ossian Muscad
As business operations’ complexity escalates, an efficient inventory management system becomes equally important. Selecting the right solution from the multitude of options available can be daunting. That’s why knowing how to choose the best option is essential. This article will explore the key features that a robust inventory management system should possess. At the end of this article, you will better understand the features one should consider when selecting an inventory management system.
What is an Inventory Management System?
An Inventory Management System (IMS) is a tool that allows businesses to manage and oversee their inventory levels with efficiency and accuracy. It tracks the inventory lifecycle as it moves in, through, and out of business, helping businesses keep the right amount of stock at the right time.
The IMS provides critical information about the stock levels of raw materials, in-process production, and finished goods, enabling businesses to manage their inventory costs, speed up their processes, and make informed decisions. A robust inventory management system optimizes the entire spectrum of inventory activities, including purchasing, shipping, receiving, tracking, warehousing and storage, turnover, and reordering.
Key Features of Inventory Management Systems
Inventory Management Systems are essential for businesses of all sizes, functioning as the backbone of successful operations. Here are some key features that make an IMS indispensable.
Real-Time Inventory Tracking
An effective inventory management system should provide real-time inventory tracking. This feature updates inventory levels in real-time as goods are sold and restocked, providing businesses with an up-to-date, accurate picture of their inventory.
Demand Forecasting
One of the critical features of an IMS is demand forecasting. This involves analyzing sales trends and predicting future demand as accurately as possible. It allows businesses to plan for peak seasons, ensure they have enough stock to meet demand and prevent overstocking.
Automation of Order Management
Automation of order management is another crucial feature; this allows businesses to automate their ordering process, thus eliminating manual errors and saving time. It ensures that purchase orders are created and processed promptly, keeping the inventory stocked.
Reporting and Analysis
Reporting and analysis functionality is essential to obtain crucial insights about sales trends, inventory turnover, and product performance. This data can be used to make informed decisions about reordering, discontinuing certain products, and introducing new ones.
Integration Capabilities
The IMS should have integration capabilities with other business systems, such as the Point of Sale (POS) system, eCommerce platforms, and accounting software. This allows seamless data sharing, reducing data entry time and minimizing errors.
Multi-Channel Management
Multi-channel management is a must-have feature for businesses that sell across multiple channels. This helps companies manage their inventory across different sales channels, ensuring consistent stock levels and preventing oversells or undersells.
By carefully considering these key features when choosing an inventory management system, businesses can ensure they select a system that aligns with their operational requirements and strategic goals.
Best IMS Features For Manufacturing
Manufacturers, in particular, can benefit from specific features within an Inventory Management System tailored to their unique needs. These features accommodate the complexity of manufacturing processes, where raw materials are transformed into finished goods. Let’s look into some of these key features:
Assemblies
One of the essential features for manufacturers is assembly management. This functionality allows manufacturers to build finished goods using various components and raw materials. With assembly management, manufacturers can track the quantity of components required for production, ensuring they always have an adequate supply.
Bills of Material (BoM) Management
Bills of Material management is another crucial feature for manufacturers. A BoM is essentially a recipe for a product, stating what parts are needed, in what quantities, and the assembly sequence. BoM management allows for easy creation and editing of these bills, facilitating efficient production planning and cost estimation.
Serial Number Tracking
Accurate tracking of individual items throughout their lifecycle is critical in manufacturing. Serial number tracking gives each product a unique identifier, providing traceability from production to sale. This feature not only aids in quality control and warranty tracking but can also be invaluable in product recalls.
Batch or Lot Tracking
Lastly, batch or lot tracking is another necessary feature for manufacturers. This feature assigns a single identifier to a group of items produced under similar conditions. Batch tracking is essential in industries where products have expiration dates, like food, pharmaceuticals, and cosmetics. It allows companies to manage recalls efficiently and comply with government regulations.
Best IMS Features for Warehousing
The warehousing industry is highly competitive, and to stay ahead, companies must take advantage of the right Inventory Management System features. Let’s look at some key IMS features tailored for warehousing:
Electronic Scanning
Integrating Electronic Scanning in an Inventory Management System (IMS) significantly enhances the efficiency of warehouse operations. It speeds up receiving items, putting away stock, and picking orders. With barcodes, QR codes, and a handheld scanner or mobile device, staff can quickly scan items, reducing manual data entry and minimizing errors. This feature ensures real-time data accuracy, which is crucial for maintaining optimal stock levels and preventing overselling or underselling.
Stocktaking Support
An effective IMS should provide robust Stocktaking Support. This feature simplifies the typically cumbersome task of physical inventory counting. The system can generate a count sheet of all or selected inventory items, which can then be compared against the physical count for discrepancies. Such a feature minimizes disruptions to regular operations during stocktakes and helps maintain inventory accuracy.
Picking, Packing, and Dispatching
An indispensable feature of an IMS, especially for warehouses, is the management of Picking, Packing, and Dispatching processes. The IMS should efficiently guide warehouse staff through the picking process, suggesting the most efficient routes and grouping orders effectively to save time. For packing, the system should be able to verify that the correct items are being packed through barcode scanning.
Finally, a good IMS will streamline the dispatch process, generating packing slips, shipping labels, and updating stock levels in real-time. This all-encompassing feature ensures smooth, error-free operations, improving customer satisfaction through timely and accurate order fulfillment.
Additional Features to Look For
While the aforementioned features cater to specific industry requirements, there are several additional features that any business should consider when choosing an Inventory Management System.
Mobile Sales App
In today’s fast-paced business environment, having access to a mobile sales app that syncs with your inventory management system is invaluable. This allows your sales team to check stock levels, process orders, and update customer information on the go, improving efficiency and customer service.
Support for Multiple Sales Channels
If your business operates across multiple sales channels—be it online, brick-and-mortar, or through third-party retailers—your inventory management system should be able to handle this. Support for multiple sales channels ensures consistent inventory levels across all platforms, preventing overselling and underselling.
Compatibility with Other Apps
Your inventory management system should work seamlessly with the other apps you use in your business, such as accounting software, CRM, and e-commerce platforms. This can save you significant time and effort in data entry and ensure that all your systems work with the most up-to-date information.
Modern Data Security
Data security is of paramount importance in today’s digital world. Modern data security features such as encryption and user access controls should be a standard feature of any inventory management system to protect your sensitive business and customer information.
Advanced Analytics
Finally, an inventory management system with advanced analytics can provide valuable insights into your business. This can help you identify trends, make accurate forecasts, and make data-driven decisions to improve your operations and profitability.
Streamline Inventory Management Using a Low-code Platform
A low-code platform can significantly streamline inventory management by offering a flexible and efficient solution. These platforms allow businesses to quickly and easily develop applications tailored to their unique needs without extensive coding.
Users can design inventory management systems that integrate seamlessly with existing processes and software, reducing the time and resources spent on manual data entry and analysis. Moreover, the systems developed on low-code platforms can be easily adapted as the business grows and evolves.
A low-code platform ensures that the inventory management system remains fit for purpose, contributing to improved productivity, reduced errors, and better decision-making. Utilizing this solution for inventory management provides businesses with a powerful tool that combines customization, scalability, and efficiency.
Why Use DATAMYTE?
DATAMYTE is a quality management platform with low-code capabilities. The DataMyte Digital Clipboard is a low-code workflow automation software with a built-in checklist and smart form builder. This feature and its drag-and-drop interface allow you to create any checklist and form template you need—including ones tailored for inventory management.
To create a checklist or form template using DATAMYTE, follow these steps:
- Log in to DATAMYTE and navigate to the ‘Checklist’ module.
- Click “Create Checklist” to create a new checklist or form template.
- Add a Title to the checklist or form template; select the category it belongs to.
- Click “Add Item” to add items to the checklist or form template.
- Add appropriate descriptions to each item, the type of answer required, and other relevant specifications, such as reference documents, acceptance criteria, or potential limits.
- Assign the personnel responsible for completing the checklist.
- Indicate any required approvals from other relevant personnel, such as supervisors or quality assurance managers.
- Save your checklist; it will now be available on any device. You can also print a physical copy of your checklist.
DATAMYTE also lets you conduct layered process audits, a systematic review of critical process steps. This auditing method focuses on the areas with the highest risk of failure or noncompliance. By conducting LPA using DATAMYTE, you can effectively identify and correct defects before they escalate.
With DATAMYTE, you have the perfect solution for creating and implementing an effective inventory management system. Book a demo today to learn how DATAMYTE can help streamline your inventory management processes.
Conclusion
An effective inventory management system is a vital cog in the machine of any successful business – particularly in an era where customers demand swift and accurate order fulfillment. The features discussed are crucial in meeting these demands. In addition, the flexibility and efficiency of low-code platforms like DATAMYTE offer businesses a tailored, scalable, and efficient solution for managing their inventory.
Adopting a robust inventory management system with these features will streamline operations and significantly enhance customer satisfaction and the business’s bottom line.
