The word “Inventory management” looks very simple and easy to some people
while very difficult and complex for few others. This thinking of people depends
on the complexity & size of the business and the way they are managing the inventory.
Here we will discuss the basic challenges of managing the inventory and try to find
out how those challenges can be overcome.
First, we will discuss few parts or functions involved in inventory management process. This will help us to gain good knowledge about
our subject (i.e. inventory) and once we establish what inventory is all about,
then we will actually move towards our topic - “Challenges of Inventory Management
Software”.
The exact requirement of inventory can be made simpler by exploring your business
and formulate the clear understanding of its working, especially in terms of supply
chain, inventory holding, dispatches and multi location warehouse management, etc.
This will give overall understanding of the business size and your expectations
from the software. Let’s understand each inventory function with their individual
challenges:
1. Holding Inventory:
When I wrote “understand the business” I meant know the nature of the
goods your business offers, for it makes a huge difference. For instance, if your
business deals in perishable goods then concern to hold inventory becomes very high
since special tools, techniques are to be applied (other than storage) to hold the
stock for long but if business offers non-perishable goods then holding inventory
conditions might be different. Similarly, there are certain concerns for the dispatch
and delivery of the goods.
2. Supply chain:
Supply chain is the most critical part of the inventory management and criticality
increases when business have multiple suppliers and multiple buyers, and top of
it, multiple delivery channels.
3. Purchase of Inventory:
This is a key challenge as we need to have information of “About-to-exhaust-Inventory”
before it actually get exhausted. It becomes most important task to generate a purchase
order and make sure that goods will reach the warehouse from the supplier before
our inventory get completely exhausted.
4. Invoice Generation Or Sales Order Preparation:
This process might be handled differently by different businesses. Some generate
invoices with the help of inventory software available with them while others generate
invoices from their accounts department (who will be using separate software for
their accounts maintenance). Whatever the case may be, we will surely consider it
in our challenge on inventory management.
5. Delivery Receipts or Delivery Challans:
Generation of delivery receipts is an important task as the deliverer needs to make sure that the goods
are delivered at correct place with said quantity and items.
6. Return of Inventory:
This is one of the complex cases to be handled while managing
inventory. Cases occur like brokerage, disliking of goods, and exchange of goods
and with this, you need to manage restocking of the goods.
7. Inventory Placement in the warehouse:
Here we can consider this a big challenge
to place each item in a particular place in warehouse where it can be found easily
whenever searched, it should also take less of space and easy to transport.
So let’s see if Inventory management software is helpful for managing the
inventory and is it possible to manage the challenges of managing inventory with
software.
There are lots of software variations available in the market, some are for managing
small business, some for managing the medium scale and some for large businesses
who have multiple warehouses and want to integrate all warehouses for better results.
The Challenges you will face for Inventory management software is a reflection of
the real problems. Few are mentioned below:
-
Identifying the software which serves your exact need like if you are running a
small business you just need to have standalone license software with minimum features
and less complexity. Similarly, if you are looking for a medium scale business,
you need to identify the network-managed software, may be with multiple licenses
and if you are managing a large business you might need an integrated Inventory
Management Software or may be an ERP solution.
-
Identifying the most useful features for your business and see if the chosen software
can help you with those business features. Different feature set are available with
different software, ideally it’s difficult to find software which fulfills
your entire requirement. But as the market is very big and options are many, you
will find software that can fulfill major features needed for Inventory Management.
-
Choosing software which is easy to learn and display features as open link, which
allows the user a good navigation and complete workflow. This is very important
as otherwise you won’t be able to explore and use the software to its fullest.
-
Exception handling in the software should be present as exceptions occur in normal
scenario. For example if in a hurry you generated the invoice and now the customer
wants to cancel the complete order or wants to add few more products, the software
should able to manage it without creating a bug or problem.
-
Software should be flexible enough to accommodate manual errors like entering wrong
stock, vendor names, invoice date and many other entries. These need to be taken
special care off with the high level of administrative rights or with other rectifying
methods.
-
Software should reflect the exact quantity available with you. It should consider
the exact on-order or in-transit order. It becomes even more complex when we have
perishable goods like apple warehouse; apple might get rotten in storage and not
available for sale anymore but your software shows it ready for sale.
-
Shifting demand and supply of goods sometime creates huge adjustment of stocks so
this feature should be available in the software.
-
Dispatch of goods is also a key feature, as sometimes it can be semi-dispatched
from the warehouse for a particular buyer and rest is sold to him, so your inventory
may show wrong availability figures but that is not available stock for sale.
-
If you are managing the Invoices with the same software you need to maintain the
invoices properly for all customers. Payments made in installments like when you
are constructing a house and buying of cement, may be a case to consider. You also
need to manage their payments and balances.
-
Purchase orders and their payments also need to be taken care of with the same software
as its going to reflect the stock in your inventory.
There are many other real time examples and challenges for the inventory software.
I am happy to have your comments.
And also provide us with your feedback over our inventory management software called
Bubble Inventory. Download and install the software to get some automation in your inventory
management tasks.