Inventory management system

Definition of an inventory management system

An inventory management system is a combination of hardware and software technology, which tracks and manages product inventory, product sales and other production processes.

How can an inventory management system be used?

A company’s inventory management system can be integrated with its ERP system. By integrating your inventory management system and ERP your business benefits from:

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What are the benefits of having an inventory management system?

There are many benefits of having an inventory management system, these benefits include:

  • It decreases human errors, which leads to cost reduction: An inventory management system decreases human errors in data processing and prevents your business from making unnecessary purchases.
  • By having an inventory management system, your business has one centralized system which stores orders and tracks your stock availability.
  • Increases your business efficiency: Inventory management is complex, but with an inventory management system you can simplify this process. All reports can be created in a matter of seconds, something which you cannot accomplish manually. Reducing your business’s time and effort tracking, and analyzing inventory data which allows businesses to reduce their inefficacies.
  • More accurate forecasting and planning: With an inventory management system your business has an accurate view of inventory needs, which allows your business to better plan and forecast its inventory levels.
  • Increased employee productivity: An inventory management system automates various time-consuming tasks, freeing up your employees’ time to focus on other key tasks.

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What are the challenges of inventory management?

The challenges of inventory management stem from not having an inventory management system. Without this type of system, companies are unaware of their inventory levels, deal with inefficient processes, are uninformed of customer demand and preferences, and have limited visibility of inventory, which is what companies require to make strategic decisions.

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