Inventory control system Archives – unicommerce.com

What is an Inventory Control System: Types, Importance, and How to Choose the Best One

Humra Sayeed — Wed, 03 Jul 2024 05:45:19 +0000

Table of Content

What is an Inventory Control System?
How Inventory Control Can Improve Your Business
1. Boosting Cost Efficiency and Cutting Holding Costs
2. Optimizing Working Capital with Automated Inventory Control
3. Better Fulfillment with Increasing Customer Satisfaction
4. Preventing Inventory Spoilage and Obsolescence
Types of Inventory Control Systems
1. Periodic Inventory Systems
2. Perpetual Inventory Systems
Choosing the Right Inventory Control System for Your Business

As an online seller, your success depends on your ability to promptly deliver orders to customers while managing costs and maximizing profits. Imagine one of your products is performing exceptionally well on a popular marketplace, but the highest-selling SKU suddenly goes out of stock. This can lead to customer dissatisfaction and lost revenue for you, ultimately driving customers to your competitors.

The primary challenge in this situation is the unexpected stock-out of a high-demand product. This shows why having a good inventory control system is important. With an effective system in place, you can easily anticipate demand, maintain optimal stock levels, and ensure that popular products are always available on all the sales channels.

Now what exactly is inventory control and why it is crucial for online sellers? Let’s explore and understand these systems and their benefits!

What is an Inventory Control System?

An inventory control system is a framework employed by businesses to effectively manage their inventory levels, track the movement of goods, and streamline operations related to stock management. At its core, this system ensures that companies maintain optimal levels of inventory without encountering issues like stockouts or excess stock.

It involves tracking the quantity, location, and status of inventory items in real-time, facilitating efficient order fulfillment and reducing operational costs associated with storage and handling. The concept of inventory control has evolved significantly over the years.

Initially, businesses relied on manual methods to track inventory, which were often prone to errors and inefficiencies. With technological advancements, automated systems have become the norm, offering greater accuracy and reliability. Today, inventory control systems are an important component of modern e-commerce business operations, enabling seamless management of stock.

How Inventory Control Can Improve Your Business?

Inventory control plays a major role in enhancing your e-commerce operations and the overall profitability of your business. Here are some benefits that your businesses will experience after implementing a successful inventory control system!

1. Boosting Cost Efficiency and Cutting Holding Costs

When you have the real-time status of your inventory levels, you can easily minimize holding costs associated with excess stock. By closely monitoring demand patterns and adjusting stock levels accordingly, businesses can optimize capital allocation and warehouse space.

Gini & Jony, a leading apparel brand implemented an advanced inventory management system that provided real-time insights into their inventory levels. With this system, Gini & Jony could accurately forecast demand and adjust their stock levels to meet customer needs without overstocking. The SKU management was further simplified with an import feature that allowed them to upload bulk inventory through Excel.

This feature also offered additional capabilities such as adding, removing, transferring, and replacing inventory, eliminating the need for manual efforts throughout the process. With the help of this inventory import functionality, the brand can effectively manage its inventory at the SKU level, ensuring accurate and efficient inventory control.

2. Optimizing Working Capital with Automated Inventory Control

Working capital refers to the funds a company uses for its day-to-day operations. Managing working capital is very important for sellers to keep their business in good health. If the inventory is tying up your working capital it can lead to increased holding costs.

With the help of automated inventory control systems, you can easily ensure inventory levels are aligned with anticipated demand and production schedules, preventing overstocking or stockouts. Moreover, these systems provide you with the ability to set automated thresholds. When inventory levels reach predefined thresholds, the system automatically initiates purchase orders, ensuring timely replenishment and minimizing the risk of excess inventory.

3. Better Fulfillment with Increasing Customer Satisfaction

Customer satisfaction is one of the most crucial aspects of any seller and it is highly impacted by the seamless experience provided by sellers from order placement to product delivery. By maintaining optimal inventory levels and using real-time tracking systems, businesses can ensure products are readily available for prompt order fulfillment.

Accurate inventory control further minimizes the risk of stockouts, ensuring popular items remain in stock and preventing customer dissatisfaction due to unfulfilled orders. Let’s take an example of an online retailer using an advanced inventory control system. The brand is easily able to track stock levels in real time across multiple warehouses.

When popular items start running low, the system automatically places an order when the thresholds are crossed. This proactive approach ensures consistent availability of the product and increases customer satisfaction.

4. Preventing Inventory Spoilage and Obsolescence

One of the critical challenges in inventory management is preventing losses from spoilage or obsolescence. Sellers must carefully manage perishable items or products that are prone to becoming outdated. With the help of robust inventory control systems, businesses can overcome these challenges.

With real-time inventory monitoring, brands can track expiration dates accurately and implement FIFO (first-in, first-out) or FEFO (first-expire, first-out) methods to ensure older stock is sold or used before newer arrivals. These automated systems enable sellers to receive alerts when products are nearing their expiration, enabling timely actions such as discounts or promotions to move inventory before it spoils.

Types of Inventory Control Systems

If you want your inventory to be optimal, you need to employ the right system tailored to your e-commerce business needs. Here’s a detailed look at various types of inventory control systems and how they can streamline operations!

1. Periodic Inventory Systems

Periodic inventory control systems are traditional methods where physical counts of inventory are conducted at regular intervals, such as weekly, monthly, or quarterly. Here’s how they work:

Inventory Updates: In periodic systems, inventory levels are updated periodically based on physical counts. Between these updates, the system assumes inventory levels remain constant.
Cost Considerations: They are simpler and less costly to implement compared to perpetual systems because they do not require real-time tracking technology.
Suitability: Periodic systems are often used for businesses with lower transaction volumes or where real-time inventory tracking is less critical. This includes small retailers, seasonal businesses, and startups aiming to minimize operational costs.

2. Perpetual Inventory Systems

On the other hand, perpetual inventory control systems involve real-time tracking of inventory levels with the help of technology such as barcode scanners and inventory management software. Here are the key aspects:

Continuous Tracking: Inventory levels are updated automatically as transactions occur, providing a current and accurate view of stock at any given time.
Efficiency and Accuracy: These systems reduce the likelihood of stockouts and overstocks by providing real-time visibility into inventory levels.
Suitability: They are well-suited for businesses that require precise inventory management, such as retail and e-commerce, where quick and accurate order processing is crucial.

Choosing the Right Inventory Control System for Your Business!

Choosing and implementing the right inventory control system is very essential for improving your e-commerce operations. You need to carefully consider several key factors to ensure that the system aligns with your operational needs and goals. First, you need to assess your business’s transaction volume and product variety.

Businesses with high transaction volumes and a diverse product range may require a more robust, real-time tracking system to manage inventory effectively. Also, consider the scale of your operations, including the number of locations and warehouses, as this will influence the complexity of the system needed.

Cost is another crucial factor; while automated systems with real-time tracking may involve higher initial investments, they often lead to significant long-term savings and efficiency gains. Finally, ensure that the system you choose can integrate seamlessly with your existing technology stack, such as your e-commerce platform, accounting software, and supply chain management tools.

By thoroughly evaluating these aspects, you can select an inventory control system that enhances operational efficiency, reduces costs, and improves customer satisfaction!

What are the Benefits of Having Inventory Management Software?

Team Unicommerce — Sat, 16 Dec 2023 11:53:07 +0000

Inventory management refers to the process of getting the right things to the right place at the right time. However, there are different intermediate phases before the product reaches its final destination. The two most prominent stages are warehousing and shipment. Surprisingly, both of them are crucial logistical problems.

A reliable inventory management strategy becomes essential for e-commerce businesses as it enables them to employ complex inventory tracking solutions.

Why is Inventory Management Software Vital for E-commerce Businesses?

Effortless inventory management strategies demonstrate the importance of proper real-time stock management. When compared to manual data encoding, one always prefers automation.

Even if the company survives on human-centric data encoding, other formulas depending on prices are critical. Thus, the software helps streamline customer service, making transactions more seamless and easy.

Here are the benefits of affordable inventory management software one must learn before implementing it in retail.

Inventory Management Software – Top 9 Benefits

Before using inventory management software, all e-commerce businesses should know about its benefits:

1. Improves Inventory Control by Tracking in Real-Time

The best inventory management software can improve inventory control when the ERP is combined with it. It tracks in real-time and spots the product’s location and how it’s moving through the whole system. This reduces human error.

Most software systems track products that are entering and exiting the cycle from production to storage and, finally, sales. Using these systems helps e-commerce businesses reduce inventory management expenses and lets them build stronger relationships with loyal customers and partners.

Also Read: What is Inventory Control System?

2. Gives Accurate Reading

The best part of implementing these systems into an e-commerce strategy is getting a clear record of the whole inventory. The sales data helps the retail store understand when to bring more products to the platform and helps e-commerce platforms order the required amount of products to prevent any dead stock for a lengthy timeframe.

3. Makes Better Business Plans

Transferring data and monitoring the business becomes easier with a central data warehouse and the scanning of barcodes. With this, retailers can know the customers they are serving, their expectations, the level of inventory, how to implement an agile inventory to make the business procedure smoother, etc. All these can improve business conversions and increase profits in the long run.

4. Avoids Overselling of Stocks

Overselling is a crucial challenge for any e-commerce business. When they don’t have accurate details about the inventory, it goes out of stock. As a result, it fails to meet loyal customers’ demands. In certain cases, it also means suspension from the whole marketplace.

With inventory management software, online retail stores can monitor customers’ demands and measure whether they can meet the current stock level.

5. Reduces Business Costs

The most reliable inventory management software informs businesses about the stocks available in the warehouse. So, a company can easily access it soon after the order comes in. It does not require ordering products at higher prices. The inventory management tool can also reduce the business expense around transportation, employee wages, and insurance.

If a retailer has excess inventory, they might have to move it from one place to another, increasing transportation costs. Moreover, if the employees do not know how to handle the stocks clearly or how much to store, it can enhance the labor costs.

Insurance is a must for a warehouse taken on rent or lease to protect the place and its assets. But, if retailers rent a site and keep excess stock without customer demand, their business will face a loss, and they will have to bear the cost of the insurance unnecessarily.

6. Expands the Supply Chain

When it comes to supply chain operations, unanticipated challenges can emerge, such as scarcity of materials, hikes in prices, changes in customer behavior, inability to forecast the demand, congestion in the port, digital transformation etc.

But using the appropriate inventory management software, retailers can devise a plan to mitigate them.

With the data generated about the available stock, businesses can decrease the risks of long waiting times if the supplier cannot deliver products as per schedule.

7. Adds Innovative Selling Channels

Each e-commerce seller wishes to try out more innovative platforms or channels to list products effectively. The inventory management system provides an overview of all channels from a single point. This enables companies to understand how much inventory gets sold on a specific channel.

In addition, most software systems come with features like real-time inventory forecasting and syncing. This makes it easier for e-commerce entrepreneurs to maintain inventory controls around different locations.

8. Anticipates Inventory for Seasonal Purchasers

With a substantial rise in the order volume due to special events or holidays, the inventory should meet the demand. The significance of inventory management systems lies in analyzing and gathering historical or seasonal data to note sales patterns, making essential adjustments in stock levels.

9. Automates Inventory Management

Automatic inventory management systems eliminate the risk of manual mistakes while saving long hours in performing the same tasks repeatedly.
With its help, e-commerce businesses can see inventory levels as the stocks automatically update as soon as a sale occurs. They can also forecast appropriately, prevent overselling, and provide customers with a better experience. The reason is simple – it lets them see the products in real-time. Thus, be it handling more than one warehouse or selling medium, automation helps in everything.

Last Words

So, these are the multiple benefits that come with inventory management software systems. As an e-commerce enterprise, accomplishing these advantages requires having customized inventory management software. So, businesses should look at different options to streamline their supply chain.

Maximize sales and ensure order fulfillment efficiency with our powerful inventory control system.

How to Implement Barcode Inventory Management System?

Team Unicommerce — Mon, 20 Nov 2023 14:56:57 +0000

In your path to reducing manual dependencies, increasing operational efficiency, achieving higher productivity and profitability, managing your inventory using barcoding is one of the most important aspects to consider for your business.

A good inventory management software works best with a fast and accurate barcoding system and becomes completely necessary if you:

Manage your inventory on a big scale in a warehouse
Consume inventory for self utilization such as training and photoshoot purposes
Have Vendor alliances who rely on barcode scanning
Sell through multiple sales channels Online/Offline

As useful as a barcode inventory management system is, the process to fully equip your warehouse and utility centers with this system can be a little tricky and time-consuming. But we at Unicommerce are here to solve this very problem of yours with our guidance and support to help you implement a robust inventory management system using barcodes for improved efficiency and productivity of your warehouse/business operations.

This blog has been designed to help you grab onto the most useful information about what is barcode scanning, why it is necessary for your business and how to implement it whether you are a small or large scale business.

First off, let us understand what exactly is a barcode and how can you manage inventory efficiently using barcodes!

What are Barcodes?

Barcode tracking or scanning is the method to streamline inventory allocation, tracking and maintenance.

Typically present in 3 forms, barcode systems have now become essential for not only keeping track of inventory but also to extract data, make secure payments and much more.

Initially, barcode scanning systems were of numeric and alpha-numeric form and were considered as one-dimensional with a unique combination of letters and numbers and or bars of different widths.

QR codes are another form that are square in shape and include a combination of small lines and dots. The QR codes are considered to be two-dimensional.

No matter what type of barcode you choose, their use provides some huge advantages when it comes to managing your inventory. As barcodes are unique, room for error is almost null and that is what makes it so much more efficient and necessary for your e-commerce business. Now let us try to decode what exactly a barcoding scanning system is and how it makes a difference for you in your efforts to manage inventory.

What is Barcode Inventory Management System?

A barcode inventory management system allows your warehouse staff to scan these unique QR codes with a barcode scanner, a device especially made to read barcodes, to automatically present complete data of the inventory in question.

When scanned, each barcode exhibits specific information and data about each item from the Universal Product Code (UPC) which is then transferred to your online inventory database. The labels and functions on your inventory can also be easily customized as per industry standards to help you be updated.

Now that you have a fair understanding of what Barcode Scanning is and how it works, let us look at some benefits of implementing a barcode system for inventory management.

Benefits of Barcode Inventory Management System

Using the right Inventory Management Software with Barcodes will give you a lot of advantages this in your overall operations, productivity and profitability including:

1. Error Proof Results
2. Complete Security
3. Higher Savings
4. Control over Information
5. Fast and Easy Handling

#1 Error Proof Results

With no more manual dependency, the chances of error become almost null increasing your productivity and with little to no room for data miscalculations.

#2 Complete Security

The biggest advantage of having a barcode inventory management system is that it gives you the ease to have complete knowledge of where, with whom and how much inventory you have. Barcodes allow you to trace your inventory in cases of theft, wrong and or damaged deliveries all at a single panel right at your fingertips.

#3 Higher Savings

Automation not only cuts back on manual dependencies but also reduces the overall cost to a company to manage its inventory and warehouse operations. Barcoding helps you reduce labour and training costs and gives you complete visibility of inventory to help you assign work accordingly.

#4 Control over Information

Crucial information about various assets can be easily tracked with the help of barcode scanning and this enables each business to print and customize additional information that they wish to share with the end-users. From the built and type of an inventory to the locations from where it has been sent, all can be detailed in the barcode labels.

#5 Fast and Easy Handling

When you have all the information about each of your products right in a tiny QR code, you can process huge chunks of data within minutes by a simple scan and derive conclusive results based on real-time updates benefitting your overall profitability.

With these highly impressive advantages of having a barcode inventory management system, I’m sure now you must be thinking of understanding the process of how to actually take on this solution and align it with your current structure of operations!

How to Implement Barcode Inventory Management System?

Transitioning from a manual to automated barcoding system may look like a huge task but with the right support and guidance, you can not only achieve the right implementation but also reap long term benefits of the solution.

Here are the major processes involved for small or large scale eCommerce businesses, to begin with, a barcode tracking system or an inventory barcode system.

#1 Check what the Industry accepts

The first step is to ensure that you are aligned to adopt the ongoing or latest barcode system which is acceptable by the government and used within the eCommerce industry.

You need to check with the mandated norms of packaging and labelling of your products that will be eligible for acceptance. You will also have to decide between choosing a 1D or 2D label, both of which can be used based on your workflow, product, etc.

#2 Create a Product Code

Once you know what is acceptable and correct as per industry norms, you need to create an asset code in accordance with the rules. The code you create can be a Universal Product Code (UPC) or Stock Keeping Unit (SKU).

UPCs are 12 digit long codes, broadly more accepted for business uses around the globe, and can be received by registering with Global Standard 1, which then can be used to trace and get updates on your products across the world.

SKUs, on the other hand, are 8 digit long codes that are unique to every business. They can be generated manually or using an inventory management system and can be used for internal operations such as stock maintenance, tracking and data processing.

#3 Finalize what information to put

Your barcode will have all the necessary information about your product and business to be successfully carried out and delivered to the right customer. To ensure that, you need to finalize what all you want to put in the label including location, identity numbers, expiration date for perishable items and much more.

Using a combination of numbers, letters, colours and shapes of labels can help you differentiate between all the items and to avoid wrong deliveries.

#4 Generate the Barcode

After finalizing everything right from how you want your barcode to look like and what information it should contain, the main task of creating a barcode for each of your products begins.

This massive task can be done by either using an online barcode generator or a free barcode software. Once you have created the barcode, you need to print the label sheet using any standard printer (inkjet, laser or thermal).

#5 Pick the right Barcode Scanner

While you might have cautiously followed the above 4 steps, if you do not invest in having a good scanner to extract all the information put on your barcode, you might see no results.

A scanner is a wired or wireless device that allows your staff to maintain operations throughout the warehouse and gives real-time updates on your inventory. If you use wireless scanners you get the flexibility to move around the facility and have all the data from these scanners stored into a memory chip that can be later transferred to your computer systems.

You can also go for a wired scanner that is usually cheaper but needs to be plugged at all times during use, to a computer and a charging outlet.

Handheld barcode scanners wired or wireless, are the most beneficial for both small or large businesses. While it costs a little more than any other type of scanners, it is a one-time investment that is sure to streamline your entire inventory management process once and for all.

#6 Select a Barcode Software

Having a software program to manage your inventory and all other operational tasks has become a mandate now due to the heavy demands and higher expectations by the customers.

The same applies for barcode scanning, and to further ease things for you, there are some really great options to choose from. But the only thing to keep in mind is to choose a software that operates as per your business standards and allows customization.

All these steps will ensure a smooth and successful implementation of the barcode inventory system, but what changes will they bring to your warehouse operations you ask?

How will a Barcode Inventory Management System improve your Warehouse Operations?

With lots of overall benefits that a well-implemented barcode system can provide you, there surely are some specific improvements that you will see in your e-commerce warehouse management system within a short period of time post transitioning.

Business growth, increased productivity, higher efficiency and accuracy are some of the most basic outputs of a good barcode inventory management system, but there are many more features that enhance your warehouse operations to distinguish your business from others and help you scale up rapidly. The right barcode system:

Enables Paperless Operations
Eliminates Picking Errors
Provides Accurate Allocations
Reduces time to locate inventory (bin and shelf)
Cheaper to Implement
Easy-to-use interface for all staff
Allows cost-effectiveness
Generates real-time analysis of data
Updates when inventory is low
Improves purchasing and ordering processes

Impressed by how a single transition can change the way you do business?

You can achieve all these benefits and improve your ROI by simply hiring the best and most trusted technology solutions provider in the country!