Choosing an Inventory Management System

by KEN

Inventory management is not as simple as the people who have experience make it seem. Warehousing is a real science that relies on complex ideas and schools of thought that takes away the complexities. After computer systems made its way into the stock rooms, however, things got a bit easier. Spreadsheets replaced the trusty clipboards filled with dizzying numbers and checklists that look more like a school detention task more than anything. And then all were alright and every warehouse personnel lived in blissful harmony – not. While spreadsheets were indeed a decent upgrade over manually making the inventory system work through pen and paper, it was not the perfect solution but neither are the modern inventory management systems. But we can get pretty close, and in this article we are going to look at the factors you need to consider to pick out the best one for your business.

The First Steps In Choosing An Inventory Management System

First, let us talk about the bad news. Inventory management is hard not just because it requires a lot of careful analysis, but also because a simple mistake can have grave consequences. Inventory tracking, counting and forecasts are all delicate tasks that require a lot of experience and a lot of foresight. One wrong move, and you could end up with excess supplies enough for an entire neighborhood but with no room to put them. This translates to losses, extra expenses in transportation, rent and even destruction of products. There are reasons why boxes in warehouses are stacked up into a specific limit. And that is not just because forklifts cannot go high enough. And moreover, inventory management is always at the mercy of the feeble attempt of humans to act as machines. What this means is that a lot of tasks are routine and do no necessarily the subjective judgements of a human worker.

In summary, we need an inventory management system that does a lot of work for us. But, we also want to have our say in the decision making. It is indeed a dream to have a robot do all the work for us. But, advanced as it may be, forecasting, and other AI backed computer intuitiveness falters at the feet of some really common mistakes. So, as with most things, the near perfect inventory management system that we are looking for is right in the middle.

There are a lot of different kinds of inventory management needs, and that is why there are also a lot of different kinds of inventory management systems. Sure, some can cover a lot of different use cases, but not everything fits your operation like a glove. So before trying to see what is out there, try to look inwards first and understand your requirements. After all, it would be simpler to make a software system fit into your actual routines than it is to bend your routines to fit a software system.

Inventory Management System and Automation

Automation is a complicated word especially when it comes to software systems. One way to look at it is that, as long as you are not doing anything manually, then everything is automated. But it sure does not feel that way when you spend hours crunched back on a computer screen looking for the inventory mismatch in an order. On the other hand, there is a creeping ideal that all of the tasks that can be done at the click of a mouse, should be done at a click of a mouse. This presents other sets of problems of course because it gives us a false sense of complacency. There have been many cases where the reins to inventory management were given to someone that may not be equipped with the right skills. The  idea was that the automated software system would be able to help make up for his lack of experience. But, that backfires as soon as the system needs a correction that is not part of the manual. A solid grasp of the essentials of inventory management is necessary even if you have the most sophisticated inventory management software system.

So, what does automation really mean when we talk about it in the context of an inventory management system. Well, as expected, there is no clear definition, however, to cut misconceptions and to better communicate with prospective software vendors, we need to have a common understanding of the term. Generally speaking, it would be much better to just ask specifically what the features of their inventory management system are. But with the glut of inventory management system providers out there, it might get very stressful, very fast. Thus, to simplify things, it is safe to assume that automation would likely mean to be the inclusion of features that would do tasks that are normally done subjectively. These tasks may include deciding what products to buy and in what quantities.

In older times, having a machine make the crucial decisions for our business can make a business collapse in anxiety. Now, every business worth their salt will need to have an analytical systems department geared towards supplementing their executives with sound business decision support.

Inventory Management System Development – In House Vs Enterprise

When choosing an inventory management system, you will be faced with a decision and that is whether you want to build your inventory management system in house or buying from an external enterprise. There are sound arguments for either cases but the debate will probably never cease. Let us have a quick look at the pros and cons of both approaches.

In house software development has its merits despite being the less chosen path of most businesses. For one, in house development makes sure that you get exactly what you wanted. You can get into the developers ear and micromanage the development as you see fit. However, having a team in-house may be quite expensive and you are not ready to shell out that amount of cash, then you should consider going the other way.

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