Types of Inventory Management Software

There are different types of inventory management solutions, all of which are capable of performing a wide variety of tasks.

This type of software can be used in two different ways; either locally hosted on existing infrastructure or deployed as a cloud-based service. Most providers of this software will offer a subscription-based service, often known as a SaaS solution, with different pricing tiers depending on the features.

Different types of inventory management tools come at varying price points to cater to businesses of all sizes. For example, Zoho Inventory is a free platform to help small businesses and includes many key features a growing business would need. Midsize and large businesses, on the other hand, can rely on Shopify for its dropshipping and wholesaler management inventory features.

As a cloud-based solution is hosted on the service provider’s cloud service, all you need is an internet-capable device and a stable connection to access the platform via a web browser or mobile device.

Client server-based or premise-based HR software is normally more robust and faster when compared to the other options available on this list. This is mainly because client server-based software is installed on-premise and the documents are stored locally in the client’s server.

The software can also be categorized by how the business will use it:

Manually managed inventory software

This type of inventory management software solution is not the most efficient or advanced, but it is a decent starting point for any small business looking to move their inventory control to different methods. Manual inventory solutions are relatively simple to use, and they are designed mostly to help with purchase orders and inventory tracking.

While arguably a user-friendly solution, the manual aspect of the solutions leaves a large amount of room for human error. Making this type of software a less popular choice for rapidly growing businesses.

Barcode-based inventory system

Barcode-based software allows manufacturers, distributors, and eCommerce retailers to process bigger inventories and collect stock data directly from a point of sale (POS) system. For an incoming inventory, the POS system will instantly update stock levels through real-time tracking and automation features.

Most inventory management software solutions nowadays offer barcode scanning capabilities as an integration or an add-on module. This means there is no need for you to get a standalone barcode scanning system unless it is to integrate with an existing inventory management tool with no scanning capabilities.

Radio frequency identification systems

RFID technology is one of the more reliable options available and offers the biggest guarantee when it comes to the efficiency and productivity of your inventory control.

This type of inventory management system automates warehouse management on both ends and is the ideal software for global retailers and larger enterprises that deal with huge volumes of orders and reorders.

RFID systems work by placing fixed tax readers on products to follow the movement of sales channels, thereby removing the need for or the idea of simultaneous warehouse management.

RFID technology is more complex and has a higher price than traditional inventory management options, especially for smaller, growing businesses and startups.

Automated inventory management systems

Automated ordering and order management are also common features in most inventory systems available today. With order management, retailers can effectively manage their sales orders and purchases under a single centralized platform.

Automation is a key feature for inventory tracking because it can streamline workflows by helping with a range of processes. This type of software can help with barcode scanning, setting reorder points, forecasting inventory, monitoring multiple sales channels, and being able to integrate with other apps like accounting software and ERP solutions.

How to Choose the Best Inventory Management Software

When choosing the right software for your business, it’s important to consider these key factors to help you find the best inventory management software for your business:

How flexible and scalable is the software?

Flexibility and scalability are two of the most important characteristics of effective inventory control, especially for business owners with growing sales channels.

If you have a small business that is only warehousing low stock levels, opting for inventory features with a higher price may not be that cost-effective. Having an inventory management tool with a suitable number of key features to meet your basic needs is good, but it’s better if it has the ability to scale to match the needs and demands of your small business.

Software integrations

Seamless integration is crucial to any software product, including inventory systems. While inventory management solutions may not include a CRM, there is a possibility you might need that option when engaging with customers during the inventory tracking process.

Inventory software that provides customers with personalized services such as real-time notifications can boost customer satisfaction by giving them information about their purchase orders. Efficient customer service will result in increased reorder levels and profitability.

Reporting Capabilities

Inventory reports are an important inventory feature to have as an integration. Reports provide insightful analysis of a business’s inventory levels, order fulfillments, and more. These insights also allow users to make more intuitive decisions in the long run.

Another reason to choose a solution with inventory reporting is that the reports and generated automatically. This saves users, so they can focus on workflows. It also removes the need for manual data entry and spreadsheets.

Order management

There are various aspects of order management that companies should look into when buying software. A quality inventory management system will seamlessly perform key functions such as sales/purchase management, order tracking, and invoicing.

You should also check the degree of automation where order management is concerned. A system with an excellent automation scheme will streamline the tasks of warehouse managers, allowing for the optimization of process flows.

Stock Replenish Information

The inventory management system should not be limited to tracking the movement of inventory items among warehouses. It should also provide adequate service to deal with the optimization of the stock levels within the operations. It should also be able to automate calculations to determine when products are out of stock and reordering points.

Inventory management systems allow members of a warehousing project team to receive low stock alerts. Users can also review these notifications at any time with the low stock alert mobile apps, available on iOS or Android. Which allows them to calculate reorder quantities from anywhere.

Benefits of Inventory Management Software

There are many benefits to using inventory management software for all sizes and industries, including:

Ease of use, efficiency, and speed

When using inventory management software, users can experience how easy it is to use and navigate through. The learning curve in any cloud-based software is inherently minimal, especially when the user knows the basics of inventory control. Staff can be trained on these platforms quickly and easily, which can improve forecasting and overall productivity.

Compared to manual methods of inventory management and data entry, using the software can save teams and businesses extensive amounts of time, money, and resources.

Create transaction documents automatically

Document generation is a common feature among different management software solutions, including inventory systems. This allows users to instantly create a variety of templates and documents like invoices, SKUs, a bill of materials, and purchase orders. You may even set the system to automatically generate and send a purchase order to the supplier when your inventory of a specific item depletes to a certain level.

Real-time reporting with useful insights

As previously stated, getting instant insights is one of the biggest benefits of using inventory management software. Most platforms are fully capable of providing real-time inventory reports on a wide variety of data, including out-of-stock items in your inventory, the number of items you have sold so far, and which products are adding to profitability.

You can also expect a significant improvement to your overall financial performance, supply chain visibility for suppliers, and more accurate accounts and financial reporting. Tracking inventory items will also be easier and more efficient, while incidents regarding missing items and inventory leakage will drastically drop.

Inventory management software is a solution designed for businesses to help users monitor and manage stocks, materials, and items in different stages across the supply chain.

When using this type of software, businesses can closely monitor inventory levels, sales processes, purchase orders, and deliverables.

Common Features of Inventory Management Software