5 Advantages of Inventory Control System For a More Efficient Business Strategy
When managing a business, one thing every business owner and entrepreneur needs to remember is that inventory control is one of the building blocks of a successful business strategy. A lot comes down to how well your inventory is controlled and managed, and poor inventory management can lead to tons of problems that can either slow business growth or tank your company completely. Fortunately, there are many ways to control inventory in today’s modern, digital world. One way to accomplish excellent inventory management is to install an inventory control system for a more efficient business strategy. A digitized inventory control system can help bring your business into the 21st century in multiple ways, as well as ensure that all business operations run smoothly, accurately, and without issue at all times. What’s more, having an inventory control system in place comes with its own advantages that just cannot be matched by a manual system or strategy. In fact, the following five advantages of implementing an inventory control system will show you how and why going digital with an inventory control system is a step in the right direction for you, your business, and even your customers.
What is an Inventory Control System?
An inventory control system is a technological solution that seamlessly integrates all aspects of a business’ inventory tasks. These include everything from shipping and purchasing to receiving, warehouse storage and organization, turnover, tracking, reordering, data entry, stock counting, and more. When your inventory control system is computerized, it allows you to integrate all of these functions into one place, making management of your warehouse and various company functions much more streamlined while also increasing your ability to navigate between different tasks and needs from a single focal point: your control system.
When it comes to inventory control systems, there are two main types to be aware of: perpetual inventory systems and periodic inventory systems. Within these two main systems, there are two types of inventory management that are used: barcode systems and radio frequency identification (RFID). In short, inventory control systems are all about helping your business track inventory and providing you with pertinent data that helps you control and manage your inventory in the most efficient way possible.
Now, let’s break down the two inventory control system types a bit further:
- Perpetual Inventory System: The type of system is responsible for continually updating your inventory records and accounts when inventory items and products are received, sold from stock, moved to different locations, or scrapped. Some businesses enjoy this type of management system because everything is always up to date via seamless repetition and unmatched accuracy with physical inventory counts after sales, reordering, shipments, and more. The inclusion of barcode scanners makes for increased accuracy when tracking different items either in your warehouses, during shipments, or upon delivery to customers. Perpetual systems are also widely preferred because, with proper management, you are always in the know and up-to-date with how your business is doing at all times. The increased accuracy is thanks in part to barcode scanners. Finale Inventory is one inventory software solution provider that offers many of the advantages of a perpetual inventory system thanks to barcode scanner software, focus on accurate inventory numbers, warehouse organization and management, and more.
- Periodic Inventory System: Unlike the perpetual system, the periodic inventory system does not track inventory daily. Instead, it lets your organization know the starting and finishing inventory levels for a previously set period of time. This system, then, tracks inventory using physical inventory counts. When your physical inventory is complete, the balance in your purchase account will change to reflect this, adjusting itself to match the cost of the ending inventory. With this system, you can choose to calculate the cost of ending inventory using either the First In, First Out inventory accounting method, or the Last In, First Out method. Finale’s software solution is also compatible with this inventory control system, depending on how you set it up and your business’ specific needs.
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5 Advantages of an Inventory Control System
Now that you have a clearer idea of what an inventory control system does and how it makes for a more efficient business strategy, let’s check out the 5 advantages of installing one:
1. Warehouse Organization
An inventory control system can lead to a more organized warehouse in a short amount of time. With a new system in place, you have a strategy that helps get your stock items in a type of order that works well with demand. Most companies carry this out by putting their highest selling items together in an area of the warehouse that is easily accessible and conducive to quick shipping and restocking. When your warehouse is more organized thanks to an inventory control system, it can also save you money on storage as well as improve order and delivery fulfillment accuracy. When high-traffic items are in the same place and easy to find, they ship out faster and are at a lower risk for getting lost. If you lose products in your warehouse, it can end up costing you due to storage fees, inability to locate items when they are needed, or inaccurate stock level readings (i.e. having an item but not knowing you have it because the warehouse is a mess). Finale’s software solutions come with centralized inventory management cloud-based tech that allows you to organized your warehouse, whether you have a single warehouse or multiple storage facilities.
2. Increased Productivity and Efficiency
An inventory control system is all about increasing accuracy, which inevitably means that productivity and efficiency will increase with a good system in place. With the help of tools like barcode scanners and different software solution features, your efficiency and productivity can increase. This happens because less time is spent on trying to keep up with products manually and instead allowing your tech solution to do the middle-man work for you. This frees up time that otherwise would be spent on manual processes, freeing up manpower for other areas of business. When efficiency increases, it leads to more sales, which can lead to better relationships with customers due to accurate and timely shipments and deliveries.
3. Insight into Business Forecasts
Over time, inventory management and control allows you to glean valuable data about market demand and trends. With these data, you can begin to better predict which product you’ll need more of at a certain time, how much you’ll need, reorder dates to ensure that you’re fully stocked at the right times, and more. While watching out for market trends and demands, you can also avoid over-purchasing certain products when they aren’t needed or widely purchased. When you can read and predict the coming business forecasts, it can positively affect your social media strategy, campaigns, promotions, and much more.
4. Lower Labor Cost
If you have a smaller business that needs to grow, how you use and distribute money is really important. You don’t want to hire more employees than you can support, and you don’t want to use manpower on tasks that can be done by a trusty control system. With this in mind, an inventory control system allows you to save money on labor costs by delegating many tasks such as data entry and updates directly to your system. What’s more, the tasks are more likely to be done faster and much more efficiently when automated, allowing you to avoid common but potentially detrimental errors like inaccurate number readings, item listings, and stock updates.
5. Better Time Management
Finally, when you implement an inventory control system and have tasks taken care of automatically, accurately and efficiently, it frees up time for other endeavors such as customer support, new marketing campaigns, and better customer service. A large part of your business is ensuring that your customers are happy and satisfied after every interaction, and an inventory control system can accomplish this. When you have more time to interface with your clients, you build better rapport, have more time to create customer-focused business strategies, and can contribute to the growth and sustainability of your company at all times.
Choose Your System, See Results
While there are many inventory control systems out there, few come close Finale Inventory’s. On its own, it comes with all five advantages of an inventory control system in general while also providing many more features and advantages such as multiwarehouse management, Lot ID and serial number tracking, and plenty of integrations across multiple channels. What’s more, it can work well either as a perpetual or periodic system, depending on the needs of your business. In short, if you’re looking to improve your business strategy with an inventory control system, you need look no further than Finale as your first choice. Check out Finale and start a free trial today!