One of the major obstacles preventing businesses from expanding and growing is poor inventory management. It can seriously affect your customers if you don't supply them on time. In B2B, it leads to a lack of trust and loyalty, which are what create long-term relationships between suppliers and sellers.
In addition, as customers' shopping habits constantly change, brands are increasingly selling across multiple channels to meet their needs. So to easily manage and track products sold and inventory balances across all these channels, inventory control methods and tools are more necessary than ever.
This article explains the key features to look for when searching for an inventory management system and how to identify the key features of an inventory management system by industry.
Main contents
1. What is a warehouse management system?
2. Key features a warehouse management system must have
3. Warehouse management features to consider
4. Inventory management system features by industry
What is a warehouse management system?
An inventory management system helps organizations account for all incoming and outgoing inventory to better meet customer demand and avoid the cost of overstocking or lost business due to stockouts. The system affects every essential business function, including accounting, production, warehouse management, purchasing, sales and customer service.
What are the key technical specifications of a warehouse management system?
The key technical specifications of an inventory management system relate to providing ways to store, organize, manage and analyze inventory data. System requirements include:
An easy-to-use interface
Automation that eliminates manual processes in the business functions related to inventory management.
A secure, reliable database that provides accurate, real-time data.
Performance that enables fast inventory tracking and control
The ability for administrators to easily add software modules with minimal configuration so the system can scale.
Software integrations and automatic features that minimize manual stock updates or entries.
What are the main modules in a warehouse management system?
The modules that make up an inventory management system vary by vendor and price. You can start with basic inventory management modules (management tools and order management) and build a system that includes advanced features and software integrations (such as accounting and e-commerce), the most common of which include:
E-commerce module: These modules are useful for selling online.
Accounting module: These modules automate financial and accounting activities such as accounts payable and receivable, third-party purchasing and payments, and they categorize revenue.
Data administration module: These admin-like modules provide fast, simple tools for managing inventory system data, such as connecting users via passwords, updating inventory records and exporting data.
Warehouse management module: Warehouse modules provide must-have inventory management functions such as appointment scheduling, receiving orders, processing returns, labeling and managing third-party service providers.
Order management module: These modules help manage orders, parts requests and order consolidation.
What key features should a warehouse management system have?
Warehouse management systems have features that help manage, control, track and plan inventory. Use this list of software features to compare solutions so you can choose the right inventory management system.
STT | Features | Description |
1 | Inventory control | Inventory control is efficiently classifying, moving, replenishing, returning and tracking products and materials. Inventory control tools can classify products by type, location and SKU (or serial number), check data, create reports, and search, filter and view products in real time. Khám phá: How to improve picking and order fulfilment performance by 50% |
2 | Inventory management | Handles the business processes that happen before goods arrive at the warehouse and how inventory reaches other destinations. These features include tools for multi-location warehouse management and integration with other software or enterprise resource planning (ERP) platforms (for example, paperless invoicing and purchase orders). |
Inventory tracking | Track inventory at different stages of the supply chain and automate processes. | |
4 | Barcode-based goods management | Barcode software eliminates data entry errors and automates business functions that need to communicate with other parts of the system. Capturing, storing and organizing digital inventory data makes inventory operations faster and more accurate. Barcode software can integrate with reporting features and digital documents (for example, touchscreen signatures and paperless invoicing). Mobile barcode scanners improve inventory accuracy, speed up back-office processes and restocking, and enable paperless documentation. |
5 | Inventory optimization | Instead of standard ordering formulas and basic ordering processes, you can use tools that provide automated reports, inventory trends and views of changes across the entire supply chain. This information enables closer matching of supply and demand so you can optimize your existing inventory.
Learn more: The essential guide to inventory planning |
6 | Inventory alerts | Various modules trigger inventory alerts that help reduce waste, optimize inventory finances and manage customer expectations. These features include automated emails or SMS messages notifying you of low stock levels and delivery and supply chain delays. Inventory alerts provide an extra level of operational control over sales forecasting, materials planning, shipping logistics and supplier management. |
Warehouse management features to consider
Consider the following features of modern warehouse management systems, which you can tailor to your business needs and which do much more than control inventory:
STT | Features | Description |
1 | Cloud infrastructure | Cloud-based software is a scalable, cost-effective solution. Cloud computing means organizations don't need to hire dedicated staff to manage and maintain those systems. Cloud infrastructure also enables automatic backups, secure access and real-time collaboration across multiple locations. Provides a scalable, cost-effective database, automatic backups, mobile device integration and secure access across multiple locations. |
2 | Internet of Things (IoT) integration | Delivers automated inventory control and reporting, digital labeling, GPS tracking, and Bluetooth- and RFID-enabled tracking. This technology has also been used to improve security against theft and loss.
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3 | Digital labels | The move to digital labeling has produced features such as GPS-enabled RFID tags and digital barcodes. With digital inventory data, organizations can now network handheld devices with databases for real-time tracking and paperless documentation. |
4 | Mobile devices | Mobile devices and apps enable real-time tracking and instant inventory alerts and notifications. |
5 | Machine learning and AI | This technology provides real-time data analysis that can improve forecasting and reporting on inventory trends that are hard to track and predict manually.
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Inventory management system features by industry
In this section you will find a list of the key features of warehouse management systems for each industry, in addition to the must-have and to-consider features above.
Manufacturing
Inventory management systems for manufacturing have combined features for managing finished goods and raw materials warehouses. These features combine advanced unit conversion for handling bulk raw materials, lean manufacturing, materials requirements planning and bills of materials.
Learn more: What is lean manufacturing, and how does Toyota do it?
Key features of inventory management systems for manufacturing include:
STT | Features | Description |
1 | Unit of measure conversion | Convert quantities of inventory received into higher or lower units of measure.
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2 | Automatic reordering | Set stock limits and place orders when inventory falls below a certain quantity.
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3 | Materials planning | Track direct or indirect materials through purchasing and production cycles, create bills of materials and determine the return on investment (ROI) for a given material.
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4 | Purchase order management | Assign suppliers, track product delivery times and manage the purchase order life cycle.
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5 | Serialized inventory | Drill down to individual items to track the product life cycle, identify defective inventory and track warranty information.
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Distribution/Wholesale
Wholesalers with online distribution channels need inventory management features that help control and track bulk inventory, manage multiple suppliers and customers, and automate processes.
Key features for wholesale distributors include:
STT | Features | Description |
1 | Sales order fulfilment | Use one dashboard to view sales orders, create packing slips and automatically send email confirmations to customers. |
2 | Multi-warehouse fulfilment | Track and fulfil orders with inventory stored across multiple warehouses. |
3 | Bundling | Control, transfer and combine items that are usually tracked individually into bundled sales orders for offerings such as subscription boxes.
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4 | Lot tracking | Track quantities of perishable, time-sensitive items by manufacturer expiry date with traceable lot numbers.
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5 | Bin management | Bin management lets you receive inventory at the warehouse and put it into preferred bins in the warehouse racking system for easy picking later during order fulfilment. |
Retail
Retailers depend on inventory management features to optimize the in-store customer experience. They need solutions that improve inventory tracking, demand forecasting and inventory alerts. Accurate multi-location management features are essential for omnichannel operations (for example, buy online, pick up in store). Point-of-sale and accounting integration features play a key role in traditional retail operations.
Key features for retail include:
STT | Features | Description |
1 | Partial receiving | Control and track partially received inventory. |
2 | Purchase order management | Create new purchase orders with consolidated supplier orders and track products by type, expected arrivals or season. |
3 | Demand forecasting | Set preferred stock levels according to seasonal demand, automatically replenish across multiple locations and create reports to identify future demand trends. |
4 | Cycle counting | Classify inventory by volume, value or transactions and receive automatic reminders about stock counts to set safety stock levels. |
E-commerce
E-commerce warehouse systems need to support accurate inventory control and automated processes to deliver products to customers without interruption. Accounting integration combining online payment processing, email invoicing and stock tracking are common e-commerce features.
Top features of inventory management systems for e-commerce include:
STT | Features | Description |
1 | Returns processing | Send customer email updates, designate warehouses to receive returned goods and create reports on return trends.
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2 | Automatic replenishment | Create purchase orders automatically when stock falls below the preset level.
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3 | Multi-carrier shipping | Store contact information and data on preferred carriers and manage multiple logistics providers. |
4 | Virtual warehouse control | Create virtual warehouses and manage drop-shipping logistics with supplier inventory stored elsewhere.
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5 | Show inventory availability on the website | Accurately reflect stock availability across e-commerce platforms. |
Khám phá: How 5,000+ large businesses successfully build smart warehouses
Conclusion
Decision-makers have many options, and choosing the right solution takes time, research and asking smart questions. SmartBiz has the answers and many tools that can make this process easier. Optimize your warehouse performance. Track and control warehouse operations accurately. A modern online warehouse in one management software.
Learn more about how SmartBiz smart warehouse management works to automate inventory management, increase accuracy, improve performance, reduce costs and increase cash flow.