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Inventory management systems


Overview

Inventory management, or stock control, is the process by which a company keeps track of its stuff. For a small business, keeping track of items with Excel or Quickbooks or even pencil and paper may be sufficient, but as the business grows so does the complexity of the task. Eventually a company adopts an inventory management system to bring organization and consistency to its records.

Integrated inventory management systems

Small to medium sized companies are often best served by integrated inventory management systems like Finale Inventory, which include the order management system, warehouse management system, and stock control system all in one. Small businesses often use Quickbooks or other accounting software in combination with an integrated inventory management system.

Businesses have different needs. Some only use the order management system for purchases; others only for sales. Manufacturers sometimes only use the warehouse management system features. You may not need all the features that a system provides, but the features to consider are:

Inlined image: invoice.gifOrder management system. Purchase orders, split orders, re-order points, sales orders, quotes, invoices, returns, customer managed inventory, vendor managed inventory, etc...

Inlined image: truck.jpgWarehouse management system. Shipments, split shipments, shipping documents, bills of lading, picking, packing, transferring, receiving, building, kitting, bills of materials, warehouse sublocations, multiple warehouses, bins, etc...

Inlined image: stack.jpgStock control system. Quantity on hand dashboard, customizable reports, transaction history, units of measure, lots/batches, serial numbers, stock takes, reservations, integrated mobile barcode solution, etc...

Basic concepts

For wholesalers, distributors, and retailers, the "stuff" that the business keeps track of is products bought from suppliers and sold to customers. For manufacturers, stuff includes the parts or ingredients that go into making the products, in addition to the products themselves. For restaurants, stuff includes the ingredients and supplies that go into the food served. For service businesses that rent items to customers or for businesses that need to keep track of their own equipment, stuff includes the assets that remain in the possession of the business but change location (asset tracking software). There are many different kinds of stuff used by different kinds of businesses, but the basic concepts of inventory management are remarkably similar across all of them.

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The top level concepts involved are suppliers, purchases, stock, transfers, work orders, sales, and customers. Reading left-to-right, you can follow the path from which products or parts are purchased from suppliers into company stock, assembled, and sold through sales to customers. The block diagram varies slightly for different types of businesses: wholesale and distribution, manufacturing, and retail and restaurants. However the inventory control system concepts are the same.

Intermediate concepts

At the next level of detail, the concepts of inventory management address situations that occur in the real world. Purchases and sales, for example, may be be shipped across multiple shipments, or a shipment may not contain what is specified in the sales or purchase order. Introducing the concept of shipments as distinct from purchases and sales accommodates these situations.

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Inventory management systems in small and medium sized businesses are often separate from the company's accounting system. If you use Quickbooks or Excel for your accounting, then the purchases and sales are the interface points between inventory and accounting. Introducing quotes and invoices to the sales completes the main concepts for order management software, and lays out the files that can be imported and exported between your inventory and accounting system.

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In the simplest of scenarios, stock levels are merely quantities of items, but in practice stock levels are sometimes a bit more involved. Stock is stored in different warehouses, and within those warehouses in bays, or aisles or bins. Keeping track of stock levels entails keeping track of quantities per location. Items may be stored individually ("eaches") or packed into cases or handling units. Many businesses keep track of not just quantities of stock with inventory tracking software, but also the packing. Some types of products have expiry dates, or serial numbers, or other properties identified by lot or batch. Thus stock may not just be quantities of a particular product, but of a particular lot.

Detail concepts

Deeper levels of detail address such topics of price discounts, tax authorities, multiple addresses, and so forth. You can imagine, though, how each level of detail fits into the framework above it. With these levels of detail in hand, you can navigate the subjects of inventory management and focus on the details that are most pertinent to your business.


Examples from Finale Inventory

Here are a few example videos of using Finale Inventory to create a product or a sales order.


Overview (simple example)


Importing a product list from Excel


Creating large sales orders (quickly)

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PARTNER STORIES

"Keeping track of inventory across multiple e-commerce channels can be just as taxing as streamlining fulfillment for online retailers. By partnering with Finale Inventory, we can help alleviate these pain points for our customers.”
Robert Gilbreath, VP Marketing, ShipStation ss

CUSTOMER STORIES

I would highly recommend Finale Inventory to any multi-channel retailer who wants to move beyond Excel spreadsheets to an easy, intuitive software solution to manage their inventory.
StrongerRX

We've tried ERP systems at ten times the cost. Finale is the only cloud stock control system that had the depth of functionality to be used as order management software and warehouse management software while still being intuitive.
Illumination

I would definitely recommend the product to everyone. Its simplicity yet scalability and speed is exactly what every inventory manager or COO must have.
LOX Extensions

Saves everyone in our organization involved with products a ton of time and keeps me from running out of critical goods thus enabling us to grow continuously
AireBeam


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