Don’t suffer the same fate as Dick Smith Holdings Ltd
Inventory management software (IMS) is a computer-based system for tracking inventory levels, orders, sales and deliveries. Businesses use IMS to avoid product overstock and outages, both of which cost the business money.
Inventory management systems have the following features:
- Order management – When a product on hand falls to a certain level extra inventory is automatically ordered.
- Asset tracking – The use of bar codes and wireless tracking technology tracks whether a product is in transit, in the warehouse, or in a store.
- Product identification – A barcode reader is used to read barcodes and look up information on the products they represent.
- Inventory optimisation – Forecasting inventory reorder point, order quantity, lead time, and stock cover.
The benefits of inventory management software include:
- Maintaining a balance between too much and too little inventory.
- Tracking inventory as it is transported between locations.
- Receiving items into a warehouse or other location.
- Picking, packing and shipping items from a warehouse.
- Keeping track of product sales and inventory levels.
- Cutting down on product obsolescence and spoilage.
- Avoiding missing out on sales due to out-of-stock situations.
For some businesses inventory represents one of their largest investments, and the effective management of that inventory is a key factor to their success or failure. For these companies good inventory management software is essential. When retail businesses fail it is often due to poor inventory management. A classic example is Dick Smith Holdings Ltd going into administration in January 2016 due to a failure to manage their inventory effectively.