Whether it's a brick-and-mortar retailer or an online shop, most successful sellers have one thing in common; they all use automated inventory management systems. Thanks to the wealth of benefits it offers, it's fair to say that this business solution has become essential for retail businesses of all types and sizes.
But what is an automated inventory management system exactly? And what advantages do they bring to the table? Let's have a look:
Automated inventory management systems - a short guide
Automated inventory management systems are software applications that allow online and brick-and-mortar retailers to manage their inventory and stock levels from a single solution. This solution automates burdensome tasks such as inventory tracking, forecasting or updating. That means that you won't need to manually update your spreadsheets or databases - your automated inventory management system will do it for you.
On top of considerably reducing your workload, an automated inventory management system will allow you to check your inventory data in real-time. This makes it a lot easier to respond to unexpected changes in demand. To make things clearer, let's provide an example.
Let's say that one of your products has suddenly started to sell really well. This spike in sales has come completely out of the blue - you weren't expecting it at all. Now, you're wondering whether this is just a passing fad or an amazing business opportunity. Should you order some extra stock? Unfortunately, you can't really answer that question without having access to accurate, up-to-date data.
Without an automated inventory management system, you will have to wait for an end-of-month report before deciding whether you should order more stock. But with this kind of automated solution, all you have to do is have a look at your stock control system. In just a couple of clicks, you'll have all the information you need to decide whether you want to put through a new order or not.
Best of all, you can even use your automated inventory management system to put your order through. Let's see how:
How do automated inventory management systems work?
Automated inventory management systems don't work on their own, isolated from all your other business processes. Instead, they're part of something bigger - an Enterprise Resource Planning (ERP) solution. ERPs integrate all your business operations into a single, centralised system. That way, all your departments source their data from the same data pool - which is updated automatically and in real time.
What does this mean in practical terms? In the context of automated inventory management systems, it means that your inventory and stock levels are directly connected to your sales channels. If you sell a product on an online channel, your stock levels will be automatically updated. If a customer returns a product, the same thing will happen. In fact, some automated inventory management systems even allow you to re-order stock automatically once it's sold out.
