How to Master the Functions of an Inventory Management System

Inventory management systems have long been an essential part of the supply chain. Without those systems in place, companies will lose track of stock, deliver products to the wrong destinations, and, ultimately, lose potential profits. It is also critical for teams to master the functions of an inventory management system to maximize its efficiency.

While cloud-based inventory control software reduces the risk of human error, teams still need to retain a solid grip on its inner workings. For instance, understanding how your inventory management solution can integrate with other systems can prove invaluable in ensuring the smooth running of the supply chain. The first step is to understand the core functions of inventory management systems.

Key Functions

Streamlined Inventory Control

A core appeal of using inventory management software is that it allows the automation of business processes and enables teams to make better decisions. The streamlining of inventory control also leads to significant savings and increased profit margins, including one client-finding an extra $15,000 a month through using SmartTurn.

Increased Productivity

Through the automation of processes, businesses can allocate resources to increase productivity. For example, being able to use barcode scanning technology to check inventory can shave off several hours each day - allowing teams to handle more stock each day.

Stock Management

The cost of stockouts is well known, with retailers taking a $1trn hit in 2018 simply due to not having enough stock. Utilizing the inventory management system, companies will be able to keep track of stock levels and set up automatic alerts even in advance of products dipping below optimal levels. In doing so, it prevents any potential issues before they emerge.

Analysis and Forecasting

The ability to analyze data in real-time can provide invaluable performance insight. For instance, you can use software to analyze the warehouse layout and staff performance to identify the best routes for pick and pack teams.

In-depth analysis can also help companies forecast supply and demand, through monitoring and recording customer behavior. This can prove to be useful during peak seasons such as Thanksgiving or school vacations during the summer.

Scheduling

With “just-in-time” supply chains proving popular, it’s essential to be able to utilize the power of forecasting to scheduling deliveries and shipments at optimum times. For instance, a business may have limited storage space, and the smooth flow of products is critical to its success. Using cloud-based software, it can alter deliveries from its trading partners with a few clicks - and the information is sent across in real-time.

Integration of Systems

One of the key advantages of SmartTurn’s cloud-based solution is the ability to integrate with external software or systems, which can include Quickbooks and Netsuite. As a result, the inventory management software can serve as a hub for multiple business processes.

Each of these core functions can be found in software provided by reputable providers such as SmartTurn. 

How to Master Inventory Management Software

Though designed to be easy to use, training your team to master inventory management software is a crucial step towards success. SmartTurn’s demonstration video can be used to support this process, and make it as efficient as possible. In addition, businesses need to consider how to structure teams.

The team structure will naturally vary from business to business, but the principles remain the same:

1. Defined Roles: For any company, it’s essential to have specialists working on different processes. For example, the receiving and putaway teams will have a different skill set than those in charge of purchasing or shipping.
2. Accountability: Across the whole company, involving both teams and processes, there’s a need for accountability. Each member of the team should take on responsibility and be held accountable to ensure the smooth running of operations.
3. Communication: As with any business, clear and proactive communication between people and systems is essential. For instance, the pick and pack team needs to be working closely with the order fulfillment teams.

For warehouses and distribution centers, there is a core set of responsibilities teams need to cover:

1. Receiving and Putaway: Covering the moment inventory comes into the warehouse, these teams need to tag the items and put them in the right areas. The foundation of inventory control is in this process, so it’s critical to get it right every time. 
2. Tracking and Monitoring: The tracking of inventory is a continual process, which involves workers monitoring stock levels and quality control. SmartTurn’s solution works with barcode technology, which can make this a quick and efficient process with handheld devices. For larger warehouses and businesses, it can be a good idea to split these teams into divisions and enable an in-depth understanding of product handling and demand. 
3. Purchasing: While the monitoring teams can track inventory levels, it ultimately comes down to the purchasing division to ensure stock levels are optimized. Working closely, the goal of the two teams is to reduce the risk of costly stockouts and wasteful oversupply.
4. Shipping: Ensuring the products get to the right destinations in a timely and efficient manner is a crucial aspect of business success. By using the integrated nature of inventory management software, the shipping teams should be able to quickly pick and pack the products for order fulfillment. 
5. Management: Clear and coherent leadership is required at all levels, setting clear targets and individual responsibilities. The overall objective of the management team is to ensure all the processes are synergized towards the company’s ultimate goal - which is to maximize profit margins.

There are other roles to consider, but these five form the backbone of warehouse operations. The manager’s purpose is to bring it all together into a streamlined set of processes running in synch. It’s also essential to have a clear objective and identify priorities. For example, speed would be of the essence with perishable goods such as dairy products and flowers, while more high-end inventory would require careful handling.

Once you have set those objectives, the task is to structure the team accordingly, and where appropriate, provide training.

Support and Train Your Teams

One of the underlying strengths of the best inventory management software is the ease of use. Due to the cloud-based nature of SmartTurn’s solution, there’s no need for technical or IT expertise. Instead, the focus should be on how to maximize the productivity of teams using the software.

Once you have your team structure and warehouse layout in place, you can instruct your managers to ensure each team member is correctly using the software. By implementing standard operating procedures, workers will be able to hit the ground running and generate increased profits for your business. It’s also important to understand that processes can be tweaked over time, with workers identifying potential weaknesses and strengths.

The core functions of inventory management systems serve as a base for warehouses to contribute to slick, efficient, and smooth supply chains. However, to take it to the next level, it’s vital for workers to master those functions and embrace technology as a solution.