Many people believe setting up the foundation of a business is the toughest phase. While the initial setup phase does associate itself with a myriad of challenges, the real game begins when it is time to stabilize a company. It takes efforts and time to lay the foundation of a company, but running a company and stabilizing it requires patience, perseverance, and acceptance of failure.
A business owner has to manage a plethora of tasks to take a business towards profitability. From managing finances to attracting consumers, everything requires undivided attention. Amidst all these tasks, there is one that many entrepreneurs don’t pay much heed to – inventory management.
Importance of Inventory Management
Finances, accounts, business expansion, and marketing are undeniably the most critical aspects of running a business, but mismanagement in inventory can wreak havoc in a company. How a business owner manages inventory can prove a game-changer from ensuring accuracy in order fulfilment to efficiently maintaining stock.
Yes, efficient inventory management does bring loads of benefits but keeping track of inventory orders, organizing the warehouses, ensuring accuracy in orders is not that simple.
The solution? An efficient inventory management solution.
Understanding an Inventory Management Solution
Managing every aspect of inventory, that too manually is not the smartest approach. Regardless of the size of the inventory management team, there is always room for human error, an unavoidable factor. To efficiently manage these operations, integrating a smart inventory management system is the key.
An inventory management system, comprising both hardware and software, is a combination of technology and methodology that helps keep track of stocked products, raw material, and finished products. An inventory management system that is efficient assists companies in adapting to the ever-changing marketing quickly, irrespective of the conditions and challenges.
A company can significantly benefit from such a system only if they make the right choice. Companies need to choose a system that equips them with the necessary tools to tackle unexpected and uncontrollable market conditions. While doing so, inventory management systems must adequately scale in ideal conditions.
How to Pick an Inventory Management Solution?
There is no denying there; an inventory management system is the need of the hour in the corporate sector. Companies with organized inventory management strategies have a better chance of satisfying the customers with timely order fulfilment and facilitation.
The question is; how does a company pick such a reliable solution?
Evaluating the Present Situation
The first factor of consideration is the present standing of the business. The questions that can help companies evaluate that; may include;
- How are the present strategies impacting the company’s standing?
- How do the in-use strategies limit the capabilities of inventory management?
- Will the strategies/tools a company is using today have the same impact five years from now?
- Has the company outgrown the present technology in use?
- How is the growth rate of the business?
- Is there inconsistency in the inventory levels across the company’s sales channels?
- What is the rate at which the company runs out of stock?
- Does the in-use tool allow easy tracking and monitoring?
A business owner who can answer these questions will know exactly where they stand. This will help a company enlist its inventory management needs.
Shaping the Inventory Management Policies
The next factor that can impact this process is the inventory management policies. Why are the policies important? Well, every company has certain set protocols. It can extract the maximum productivity if the company is run on those protocols.
An inventory management policy can benefit a company in picking the right system. When choosing an inventory management solution, whether a company follows FIFO (first-in-first-out) or LIFO (last-in-first-out) must be considered.
A Clearly Defined Set of Expectations
A company needs to know exactly what they need. Stepping into a store with nothing in mind can make one end up with the wrong purchase. When it comes to inventory management, a wrong system can ruin the entire game.
A business owner must know the features they are looking for in a system.
These factors are important to bring into consideration when choosing an inventory management solution. Systems such as Oracle NetSuite are capable to efficiently manage inventory and equip a company with the necessary tools to improve its standing in the market by stirring maximum satisfaction rates.