How much capital does your company have locked up in inventory? Reports indicate that most businesses have 20 to 40 percent of their working capital tied up in stock. That’s why efficient management of those resources is so important. Poor inventory management can lead to fewer sales, unhappy customers, lower profit and higher carrying costs.
But how do you choose the best inventory management software when there are so many options available? The first step is to have a thorough understanding of your company’s needs. From day-to-day shipping and receiving to sophisticated reporting and analytics, today’s inventory management software offers an extensive range of capabilities. We’ll give you an overview of what makes the best inventory management software and the features to look for to keep your inventory working for you.
Contents
What is inventory management software?
Who uses inventory management software?
How does inventory management software work?
What are the benefits of inventory management software?
What makes the best inventory management software?
Best inventory management software
Conclusion
What is inventory management software?
Inventory management software is used to track and control inventory -finished/manufactured goods or raw materials - so a business knows what inventory it has, where it is located, where it needs to go and when more needs to be ordered or manufactured. The primary goal of inventory management software is to centralize and streamline those processes.
Most inventory management software combines inventory control with related office or operations functions, including purchasing, manufacturing, accounting and sales. More advanced systems include additional capabilities, such as compliance tracking, demand forecasting and multi-location management.
Who uses inventory management software?
Inventory management software is used by a variety of businesses and can address a variety of needs. Distributors and wholesalers use it to optimize their warehouses, and retailers and e-commerce use it to manage stock, fulfill orders and share data with integrated back-office functions.
Manufacturers use it to track parts and raw materials, for material requirements planning (MRP), to manage suppliers and even to track labor. Inventory management software is widely used in manufacturing to ensure that materials are available to complete work orders. Once goods are complete, inventory software tracks them from the manufacturer to warehouse or point of sale.
How does inventory management software work?
Inventory management software integrates data and operations, creating efficiencies by eliminating redundant processes as well as error-prone, time-consuming manual processes. The software gives users detailed information about inventory on hand, such as what, how many and where located. That data is integrated with sales, purchasing and accounting processes to streamline order fulfillment and fuel related business activities.
Inventory data can be integrated with manufacturing operations as well, including MRP for scheduled jobs and bill of materials (BOM) tracking. Some inventory management solutions offer lot and serial number traceability to help ensure and track quality throughout a product’s lifecycle.
Typical tasks streamlined with inventory management software include:
- Inventory control / Stock management - Inventory control tracks inventory location and quantity so you always know what’s on hand and what needs to be ordered or reordered. Inventory software can automatically update inventory data when shipments arrive or leave the warehouse.
- Purchasing – Purchasing capabilities automate processes for purchasing direct and indirect goods. Modern inventory systems allow you to set reorder points that trigger purchase orders when an item gets to a certain level.
- Supplier management - This feature enables you to store and track supplier details, including documentation, assigned items and performance metrics.
- Warehouse management – Warehouse management tools give your business more control of multi-faceted locations such as areas, bins, and racks, as well as daily warehouse operations, including shipping and receiving.
- Material requirements planning (MRP) - Manufacturing inventory management ensures materials are available and ready for use by manufacturing operations.
- Sales – Sales orders are connected to company-wide operations, including order recording, shipping and invoicing. Sales data captured by the system can be used for analytics and forecasting.
What are the benefits of inventory management software?
Inventory management software simplifies and centralizes basic inventory management processes and provides visibility into stock levels. More advanced inventory management software offers real-time insights into your inventory, allowing your business to be more agile and make more impactful decisions.
Cost Savings
One of the most significant benefits of inventory management software is its ability to reduce costs. With better visibility into stock levels, businesses can avoid over-ordering or under-ordering products or materials. This minimizes the costs associated with excess inventory and reduces the risk of stockouts. Additionally, by automating inventory tracking, businesses can cut down on labor costs related to manual counting and tracking of inventory, freeing up resources to be used elsewhere.
Increased Productivity
Manual inventory management can be time-consuming and error-prone, especially as a business grows. Inventory management software automates repetitive tasks, including automatically updating stock levels and generating reorder alerts. This not only saves time but also reduces the likelihood of human errors. The software’s ability to integrate with other enterprise processes further boosts efficiency by ensuring data flows seamlessly across operations.
Production Optimization
For manufacturing businesses, optimizing schedules and minimizing production delays are critical to staying competitive. Inventory management software enables businesses to track the flow of materials, ensuring that the right products are always available when needed. This helps avoid production bottlenecks caused by missing parts or materials. With better control over inventory levels, companies can adjust production schedules in real time, leading to more efficient workflows and faster turnaround times.
More Accurate Financial Reporting
Inventory management software enhances financial accuracy by providing real-time insights into inventory costs and value. By keeping track of inventory in real time, businesses can maintain more accurate financial records, reducing discrepancies between inventory counts and financial statements. This ensures more precise reporting for audits and financial planning. Integrated systems allow for the automatic generation of reports, giving management access to the data they need for better decision-making and cash flow management.
Greater Customer Satisfaction
When your business runs efficiently, you’re better able to serve customers efficiently. With proper inventory on hand, businesses are able to meet customer demand in a timely manner. Inventory management software provides insight into available inventory so delivery times are estimated correctly and purchase orders are processed quickly.
What makes the best inventory management software?
Inventory management software plays a critical role in optimizing your business’s ability to control stock efficiently, while also offering advanced capabilities like supply chain tracking, demand forecasting and seamless integration with manufacturing operations. Below are some of the key features that will ensure your inventory management solution meets all of your business needs.
Real-time, Multi-location Inventory Tracking
The best inventory management software provides real-time data and views of inventory levels across locations, whether its among multiple warehouses, in transit or on store shelves. Automated low-stock alerts and auto-replenishment functions help prevent stockouts or overstock situations, ensuring inventory is always where it’s needed most.
Lot and Serial Traceability
Comprehensive traceability through lot and serial number tracking is essential for businesses that handle regulated products, perishable goods or require strict quality control. This feature enables detailed tracking of products across their lifecycle, minimizing waste from expired goods and allowing for quick identification and retrieval in the event of a product recall.
Digital Labeling and Barcoding
Barcoding and digital labeling tools are key to improving operational efficiency by eliminating the need for manual data entry. By leveraging these tools, your inventory management system can instantly update stock records and transaction data as items are received, transferred or sold. This not only reduces the chance of human error but also provides accurate, up-to-the-minute data about inventory levels, supporting smoother workflows and better decision-making.
Forecasting, Reporting and Analytics
Advanced inventory software provides powerful analytics tools that enable businesses to analyze sales trends, forecast demand and generate detailed reports. By harnessing real-time data, management can make well-informed decisions on stock replenishment, supply chain optimization and resource allocation. This predictive capability ensures your business stays agile in responding to changing market demands while minimizing excess inventory and associated carrying costs.
Best Inventory Management Software
QT9 INV: Advanced inventory management
QT9 Inventory Manager (QT9 INV) ticks all of the necessary boxes and more. QT9 INV automates all of your inventory management processes, gives you real-time insight into stock levels and locations, and provides advanced features that help you integrate inventory control into the success of broader operations.
With QT9 INV you get:
- Real-time, Centralized Inventory Control
- Barcoding and Scanning
- Warehouse Management
- Bill of Materials (BOM) Tracking
- Lot and Serial Traceability
- Manufacturing Operations Integration
- Job Scheduling
- Supply Chain Management
- Integration with QuickBooks, Xero and Sage 50
For highly regulated businesses, QT9 INV seamlessly integrates with QT9’s highly rated quality management system (QMS) software. What’s more, you’ll get unlimited training, unlimited customer support, free software updates and tailored implementation support, all at an affordable price point.
Conclusion
Choosing the best inventory management software is a critical step in ensuring the efficiency and profitability of your business. With so many options on the market, it’s important to focus on software that aligns with your specific operational needs, from basic inventory control to advanced features like demand forecasting, supplier management and multi-location tracking. The right system will not only streamline your inventory processes but will also provide valuable insights that help drive better decision-making, optimize stock levels and reduce costs.
Ultimately, the best inventory management software is one that offers scalability, integration and flexibility to grow with your business. Whether you're looking for real-time visibility, robust traceability or seamless integration with other business functions, a solution like QT9 INV can deliver comprehensive inventory management that aligns with your broader operational goals. By investing in the right software, you can unlock new efficiencies, reduce waste and keep your inventory working to fuel long-term business success.
