Before getting to the core topic, I would like to explain what Inventory Control
System exactly is. Is it an old expression or the invention of modern world? Or
should I put it as the mix of both, the system is old and the approach is new. In
English definition, it seems as a modern terminology but in actual sense it is done
and performed since the existence of mankind when he started inculcating understanding
of commodity and its quantity.
In earlier times, before the technology role came into play, it was just “Inventory
Management” not “Inventory Control System”. This term is the offering
of technological world on account of using different systems, processes, automation,
software and control practices, hence making it a “Control System”.
Meaning & Relevance
So let us discuss about it in more detail with the help of the following points
which covers its meaning, advantages, challenges, failures, role of software’s,
task of humans and other prospective.
ICS signifies “dealing with any physical goods in terms of its quantity”
with the help of software components. This definition completes the meaning of “System”
in the whole terminology.
Modern ICS relies mostly on Barcode, RFID (Radio-frequency identification) to identify
tags on each product itself, which is unique in its nature.
Need of Inventory Control System
The major challenge was to handle the situation when products go out-of-stock and
the sales is accidently made for it to a customer. Later on it becomes very difficult
to handle the refunds, exchanges, extra fees which needs to be paid to customer
and on top of that, it spoils the goodwill of the company to its highest damage.
To fix this problem, the ICS did a wonderful job. Studies showed that implementing
ICS has reduced out- of- stock products problem (just stated above) from 30% to
0.1%, which is a big achievement for companies.
Applications
ICS is widely used for automating the process of selling goods, as it can identify
the goods with the help of unique tags, can gather information about products, check
for conditions or warning attach, products’ available quantity, goods-in-transit,
help workers to pick products, allowed packaging on it.
The complete automated Inventory Control System should be integrated with LAN or
Internet connection as it becomes necessary to handle real time transactions on
inventory.
These days, mobile network and devices are playing significant role in ICS by communicating
almost every activity to customer like delivering SMS for packaging, in-transit,
leftover stock, shipping, arriving soon, delays and others. This helps both, the
customer and the seller.
Types of Inventory Control Systems & Analysis of their Demand
The difference between ICS can be categorized in terms of their automation and implementation
technique. If we talk about automation, we will classify them on approach of RFID
or barcode as complete automated system and if we classify this on technique they
are managed by tags (product key) or SKU then we would say semi-automatic. Similarly,
a differentiation can be created in terms of stand-alone ICS (Majorly just a software)
or integrated system (An ERP Solution) or may be a cloud solution, not very popular
in current times but showing upward movement so may be in future it will become
more commonly used type.
To get more on this classification, below mentioned graph exhibits the movement
of trends and popularity of different approaches of ICS. These movements are acquired
with the help of Google trends.
Figure: Demand Analysis Graph "Inventory Control System"
As per the results from the above graph we will try to draw some conclusion about
the demand of different types of inventory management control systems. But first
let me explain you the graph itself.
The research was conducted on 3 keywords
“Download Inventory Software” Considering it for the
standalone license software’s (PC License), graph marked with Red color.
“Online Inventory Software” Considering it for the
cloud version, demand anticipation marked with Yellow color.
“Inventory Module” Considering it for the ERP implementation
(Inventory Module) marked with Blue color.
Now let us discuss about our conclusion from the respective graph.
Stand-alone License software has huge demand as compared to others and exists before
ERP and cloud solutions birth, which we can clearly see. But as now the ERP and
cloud versions are also growing, Standalone ICS is facing quite a direct dip in
the demand although still it is able to sustain itself and manages to run above
the other two, but it’s difficult to say if standalone license can keep this
pace as cloud and ERP are picking up fast.
Definitely we can see cloud is picking fast, although in its earlier times it did
not show any movement, may be because of the non-availability of Internet or may
be at that time, professionals were not ready to keep their information at somebody
else’s server. Of course speed of internet connectivity is another major reason
for drastic upward movement of the cloud solutions.
The ERP is keeping itself constant; not too much variation and amongst the three,
it has the lowest trend but of course we need to accept that ERP solutions are very
expensive and are used by large organizations, so this may be the cause that they
are lesser in trend but might be fetching more money due to their nature of handling
work and integration.
I have tried to give my knowledge and research to you for ICS. We are not covering
challenges of Inventory Management here as you can read them from our
another blog.
I would be happy to have your opinions and anticipations for the demand on ICS in
near future. Please do share your views. Or
download our inventory management software - Bubble Inventory which will
help you in framing your views.