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Keeping your inventory in check as a business that sells physical inventory is of paramount importance. But why spend more time on paperwork and manual checklists in the presence of vast digital technology when you could be spending that same time growing your business? Poor inventory management often leads to unplanned out-of-stock situations, which could be costing you up to 12% of your revenue!
Only 18% of small businesses use automated inventory management, even though it helps alleviate common warehouse issues, like unanticipated stock-outs. It also reduces inventory loss and provides better visibility into your supply chain. Best of all, automation means less paperwork, and you can spend that time on what really matters – your customers.
Choosing the right automated inventory management software for your business can be a big decision. So if you’re unsure where to start or what features are best for your business, this quick guide will help you automate your inventory management system.
What is an Inventory Management System?
An inventory management system is software used to track the flow of goods within a business. These types of systems often include features such as receiving, order fulfilment, customer service, and so on.
Your automated inventory management system helps tackle various stages of inventory management, including;
- Ordering products from suppliers so you have enough stock available to meet expected demand.
- Keeping inventory turnover rates (the rate at which stock is purchased or replaced).
- Determining the optimal quantities to order from suppliers so that the cost and the risk for out-of-stock situations are minimized.
An automated inventory management system collects data about the items in stock at any given time and where they’re located in the warehouse. It also tracks how much of each item has been used so that when you need more, you’ll know exactly how many units are left to order.
What are the Benefits of an Automated Inventory Management System?
An automated inventory management system notifies you when your inventory is running low. Then, as you order more inventory, the system can automatically create a work order to notify the appropriate personnel at the receiving end. Some systems are equipped with RFID tags to mark your inventory. This enables you to track items through the supply chain, eliminating the need to search manually for every item in your warehouse.
Here are more benefits of an automated inventory management system:
You’ll know when to order more stock.
When inventory levels have dropped to a predetermined percentage, your system can automatically flag an order to be sent to your supplier. This way, you won’t run the risk of running out of stock before you can order more.
Your records will be more accurate and reliable.
Manual record-keeping is prone to human error, and it can be especially difficult to maintain accuracy if you have a load of different goods in your inventory. One type of inventory record you’re likely to keep is the “in” and “out” transactions. This includes when items are purchased from your supplier and sold to customers.
It can be tempting to just record data as you go along without keeping a system for it – especially if you have a smaller business. But you’ll want to keep things organized as you scale up and have more inventory. An automated inventory management system can help you eliminate manual errors from your records.
It gives you visibility into your supply chain.
One of the major benefits of an automated inventory management system is that it gives you visibility into your supply chain. This means you can track shipments’ progress in real-time and ensure they arrive on time. You can also ensure your suppliers are shipping to you on schedule.
It’s easier to forecast inventory needs for the future.
With an automated inventory management system, it’s easier to forecast inventory needs for the future. You can use the information from past records to forecast future sales. For example; you’ve just noticed that you’re about to run out of a certain item. You can use your past records to predict how many items you’ll sell in the next few months and order enough inventory to cover this demand.
Did you know? Gartner Digital Markets May 2020
“By 2022 over 70% of B2B marketers are going to be using intent data as part of their marketing strategy”
What are the Features of Automated Inventory Management?
Automated inventory management software is also ideal for businesses with frequent and unpredictable product demand fluctuations. An automated inventory management system is necessary for businesses that sell a wide variety of goods with massive warehouses.
To accomplish the different roles you throw at your system, it needs the following features:
- Real-time inventory management – It tracks items in the warehouse and updates your records in real time, so you have an accurate number of items.
- Quick order processing – An automated inventory management system should be able to process orders quickly and efficiently so that the customer can receive their order as quickly as possible.
- Inventory optimization – This feature allows businesses to save money on storage by optimizing their stockroom and eliminating out-of-stock situations.
- Customizable workflows – Inventory management is a series of steps (from product delivery and reception to storage) that can be customized to fit the needs of your business.
- Reporting features – Your automated inventory management system should provide access to deep analytics about what’s working for your business, turning data into insights for more adaptive business decisions.
- Seamless integration with ERP systems: An automated management system should integrate with ERP software, including accounting software (like QuickBooks), sales CRM, and more. This will give you a complete overview of all your finances in one place.
An automated inventory management system allows you to streamline this process so that your inventory is only recorded once and then accessed from multiple locations when needed.
What Can Be Automated in Inventory Management Systems?
Inventory is difficult to manage manually, but that doesn’t have to be the case every time you receive a new batch of items from your suppliers. Inventory management systems can automate many aspects of inventory management, leaving you to focus on your main goals instead of keeping track of inventory numbers.
Inventory level tracking
Automated inventory management systems can be used to track inventory levels and order new items when those levels drop below a certain threshold. It can be used to schedule inventory reordering at the most efficient time. The system also tracks which items are going out of stock and orders new inventory for those items when their level drops below a certain threshold.
An inventory management system can automate communication with your team and customers. For instance, it may email or notify your sales team and customers to let them know when new stock will arrive. Some automated inventory management systems can notify your supplier whenever you need a fresh supply of goods.
Workflow automation lets you set rules that dictate your system’s actions based on the circumstances. For example, you can set a rule letting the system send emails to staff members when inventory levels reach a certain threshold. Your automated inventory management system can perform other tasks like calculating inventory costs, generating purchase orders, and keeping track of receiving and issuing inventory.
Sales Pipeline Automation
It is crucial for businesses to automate sales pipeline to help increase revenue and meet the overall business goal. The best way to do this is to integrate your automated inventory management software with your sales software so that you can see the current inventory levels for different products.
Then, based on what’s being sold, you can mark what items are currently available and, more importantly, when replenishment is inevitable. Don’t miss out on an opportunity to close a deal due to an inconvenient stock-out.
What to Pay Attention to When Automating Inventory Management?
Inventory management is a broad spectrum of activities involving stock auditing, controlling, counting, receiving and inspecting materials, and so much more. As such, there are a couple of things to keep in mind.
First, selecting a system that can handle the current inventory volume is important. This can be challenging because you might not know how your inventory will grow. The best way to get around this challenge is to select an open system like RFID or barcode scanners. These systems can be expanded over time to accommodate your growing volume.
You also need to ensure that your employees don’t have a hard time using the automated inventory management system. There should be a standardized way of recording purchases, transfers, sales, and returns and a clear process for reordering inventory.
How the Experts at Automaly Can Help You in Inventory Management Automation in Pipedrive?
Pipedrive offers a range of sales and marketing tools designed to help you automate core sales and marketing tasks within your business. Some of the most common uses for Pipedrive are lead generation, email marketing, sales lead management, and customer retention.
At Automaly, we can help you integrate your automated inventory management system with Pipedrive for additional flexibility. Automaly is the Automation & AI consultancy that will take your business to the next level. Our experts can help you find and set up your company’s most suitable Pipedrive integrations and train your team to use them.
We review your existing sales and marketing automation setup and make improvements where necessary. This way, you’ll never have to worry about mundane manual tasks but instead, focus on closing more deals and keeping your customers happy.
Ready to see how it works? Book an automation Process Power-Up today!
Inventory management is essential to any business, but keeping tabs on your inventory on paper can be difficult. An automated inventory management system can make this process much easier by letting you know when to order more stock, mark down items that are getting close to expiring, restock popular items, and keep your records more accurate.