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Diamond Trading

Inventory Management System: A Guide to Success and Best Practices To Follow

Feb 10, 2024
Inventory Management System: A Guide to Success and Best Practices To Follow
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Irrespective of the nature and size of a business you run, inventory management is a crucial function to source, store, track, and manage your stocks and facilitate sales process. The progressive shift in inventory management from manual to automated systems helped businesses to cut down time and cost and ensure sufficient stocks based on changing market demands. We will explore how inventory management systems work and how to find an ideal inventory management system for your business requirements.

What is inventory management system?

An inventory management system is an integrated platform which tracks stocks and goods movement through supply chain. Starting from purchase of materials to processing, production, and to final sales, business inventory management system governs end-to-end inventory handling for your business. If you have to manage a considerable inventory for your business, it should be handled efficiently and timely to optimize the profit margins. Choosing a reliable inventory management system will help you to achieve this goal.

Benefits of having an advanced inventory management system includes;

  • Transparency in real-time inventory to track stocks, location, and decide when to reorder.
  • Fulfilling customer demands by avoiding stockouts and leverage potential sales opportunities.
  • Expedite workflow by avoiding manual tasks and integrating inventories at multiple locations.
  • Real-time cost tracking of production and sales and optimize profitability.
  • Accurate financial reporting with proper accounting as subsidiary process of inventory management. 

Inventory Management System Examples & Types

Inventory management systems vary based on the size, industry, and inventory requirements of various businesses. For example, small business spreadsheet inventory systems are completely manual inventory whereas purchase, production, and sales teams are dependent on excel spreadsheets, which may oftentimes fail due to improper data entry. On the other hand, global enterprises are using cloud-based inventory systems which hold centralized data to track stocks at various warehouses.

Types of inventory systems

  • Stock management systems

These systems as more advanced compared to spreadsheets. Even though it may be ideal for small businesses, stock management systems lack essential features needed for medium to large enterprises.

  • Automated inventory management systems

These are designed to track and control the inventory automatically. There are on-premise and cloud-based systems to improve operational efficiency by reducing time taken.

  • Warehouse management systems

To plan, manage, and optimize warehouse storage. There are software applications which can handle purchase, production, and stock control.

  • 3PL inventory management systems

3PL means third-party logistics, with which the businesses can track their goods in and out of the fulfillment centers across various locations in real-time.

  • ERP inventory management systems

ERP or enterprise resource planning systems is a one-stop solution covering complete business planning by integrating various functions like inventory management, supply chain, accounting, and workforce planning etc.

  • Cloud-based inventory management systems

Cloud-based inventory software is a digital system to record stock levels and inventory data. It can integrate and track inventories remotely .

Other common types of inventory systems are

  • Asset inventory management systems
  • Periodic and perpetual inventory systems
  • Barcode inventory management systems etc.

The futuristic inventory management systems use technologies like artificial intelligence, Internet of Things, blockchain, intelligent order management, and quantum computing etc.

How Sarvadhi Can Help You Develop an Inventory Management System?

Sarvadhi team is highly experienced in building enterprise resource planning and inventory management applications for various industry sectors. As requirement of each business differ in terms of their inventory management needs, Sarvadhi can closely analyze your pain points and produce solutions to fulfil end-to-end inventory management needs.

Inventory Management System: Use Case 

Global Diamonds operates in the intricate world of gemstone trading and approached Sarvadhi with their decentralized inventories and fragmented inventory system.

  • Cutting-edge technologies as NodeJS, ReactJS, and MongoDB used build a robust platform to facilitate real-time synchronization, online store inventory management, curated search results, custom match pairing configuration, and an intuitive dashboard with data insights.

With our top rated inventory management software, Global Diamond achieved a 40% reduction in inventory management time, 60% increase in user engagement, and 25% boost in sales.

FAQ

What are the four types of inventory management system?

Four major types/styles of inventory management systems are

JIT - just-in-time management

MRP - materials requirement planning

EOQ - economic order quantity

(DSI- and days sales of inventory.

Need for these inventory management types may vary for different businesses.

What is inventory management vs order management?

Inventory management is meant to track down stocks whereas order management is to track down customer orders and sales. We can see inventory management is a key facilitator to order management / order fulfillment.

What is inventory management example?

As discussed above, Sarvadhi’s building diamond trading inventory management system for Global Diamond is a classic example of functional inventory management system, which improved sales, brand value, and profitability significantly.

Conclusion

We can see that inventory management is one of the most critical aspects of business management. As there is no perfect one-size-fits-all inventory management solution, it is necessary to get the assistance of a reliable expert building and customizing the most suitable inventory management system for your business. Considering the industry expertise and experience in building sophisticated inventory management systems, you can rely on Sarvadhi to find the most appropriate inventory management solution for you.

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