How an Automated Inventory System Can Streamline Your Operations
Here’s a fun fact: there are over 26 million eCommerce stores in the world right now. That said, the number of consumers making purchases online is ever-growing, which will cause global [1] eCommerce sales to exceed 4.1 trillion US dollars in 2024 alone.
Looking at the bigger picture, it seems that running an online store is quite a profitable endeavour, perhaps even an enjoyable one. Now, imagine you have to record every transaction on a piece of paper and count every product you procure manually. Running such a business would certainly no longer be enjoyable, not to mention impossible.
You simply couldn't keep up with the market’s pace by recording everything yourself. Fortunately, you don’t have to. Modern technology has provided a solution. Otherwise, the eCommerce sector would be such a fundamental part of the global retail industry.
This is where the automated inventory management system comes into play, which is just one of many solutions technology has provided for both retail and eCommerce business owners. As you may already know, automation does things so you don’t have to, and it does it with improved speed and efficiency, which is why it’s so highly sought-after.
But what exactly is this inventory automation, and how can it help your business? Let’s take a closer look and find out together.
What is an Automated Inventory Management System?
As its name suggests, an automated inventory system is basically a tool that allows you to manage your inventory stock levels with little to no human intervention whatsoever.
A software solution keeps a close eye on your inventory. It actually alerts you when you’re about to run out of some products, when you have excess inventory, whether or not you have any obsolete inventory, and if any items are missing from the stock, to name a few.
All in all, it’s a data-driven system that helps you manage inventory more efficiently and, most importantly, helps you do so across multiple locations. So, for example, if you have multiple points of sale online and/or multiple retail stores, as well as multiple warehouses, an automated inventory system will keep track of everything.
Every mundane and repetitive task that would normally require human intervention is now automated. And, since software solutions of any kind can be integrated with other business solutions, the automated inventory management system can help streamline entire workflows and even orchestrate the majority of your business processes.
For instance, while keeping track of sales and stock levels, the system can automatically calculate the costs of goods sold (COGS) and prepare your financial reports with improved accuracy. A pretty neat tool to have in a quite saturated and competitive market, wouldn't you agree?
How can an Automated Inventory Management System Streamline Your Business Operations?
If you’d say that automation is exactly that: a way to automate repetitive tasks, you’d be absolutely correct, but only when this technology was in its infancy. Over the years, technological advancements have made automation much more than it was a few years back.
It’s, in fact, a powerful system now that can accomplish a lot more than just automating this or that. If we closely examine the automated inventory management system, it’s actually a combination of solutions with automation as its focal point.
As such, it has the means to streamline your business operations and vastly improve your business efficiency. Let’s see exactly how that can happen.
1. Cut Down on Expenses
Every retail or eCommerce store wonder knows that keeping inventory in a warehouse costs money. How much that will cost you depends on how fast you can move goods in and out of that warehouse.
Since an automated inventory system can help you detect consumer purchasing patterns, you’ll know exactly how much inventory you need to keep at any given moment. That means no surplus and no stockouts, resulting in fewer warehousing costs.
For example, combining an automated inventory management system with a consignment inventory approach will help you move goods from suppliers to customers with little to no warehousing costs at all.
2. Boost Business Efficiency
Allowing software to keep an eye on your inventory carries more benefits than it seems. For example, you need fewer employees checking inventory levels, which means they can focus on other relevant tasks.
Moreover, you don’t need to halt operations to conduct an inventory count regularly or conduct an inventory audit, which means less downtime and more productivity.
Let’s not forget the fact that the system will notify you when you’re running low on inventory, and it can reorder products or goods from suppliers on time, provided you configure it to do so.
3. Business Intelligence
Aside from its usual functions, an automated inventory system keeps a detailed record of every transaction ever made. This provides useful insight into customer purchasing behaviour.
This allows you to utilise those insights to determine market trends and forecast demand, as well as analyse which products are selling better compared to other products in the same category.
You can, therefore, use the analytics provided by the system to optimise your inventory for improved sales and prepare your company for any shifts in customer purchasing habits.
4. Seamless Scaling
When you have an automated inventory system running the show, you don’t have to worry about what happens if you need to scale your business up or down.
The system simply adapts to changes in inventory levels. Whether it’s an increased or decreased demand, your system can handle whatever comes next.
5. Improved Customer Satisfaction
Everything consumers want is a seamless experience. If they order something, they expect that something to be delivered to their doorstep within a specific time frame. Whether that’s same-day, next-day or 3-5 business days delivery is irrelevant, as long as the customer gets what they want.
Now, with an automated inventory system, you can make that happen. You’ll always know the exact stock level and whether or not you can fulfil the order. The more you meet customer expectations without inconveniences or delays, the more satisfied they become.
How to Implement an Automated Inventory Management System?
Before you decide to implement an automated inventory system, it’s essential that you first determine your business needs.
This will help you choose the best solution that will fit right into your organisation. In order to help you out with your search, here are some of the factors you should consider before making your decision.
- Check compatibility with your barcodes, RFID tags and POS systems.
- Ensure the software can easily integrate with other solutions, such as ERP, MRP, Accounting software, eCommerce platform and so on.
- Choose a software that has built-in reporting tools and business analytics features.
- Check compatibility with systems your suppliers use.
- Determine if the software is capable of sending out warnings and notifications.
- Check for any reordering features.
The most important thing is to determine if the automated system is able to perform the way you need it to. After that, it's all a matter of setting up a budget and choosing the right provider.
Let Bezos Software Help Manage Your Inventory
As you may already know, automation technology has advanced significantly since its inception and is now quite widespread across the industry. Choosing the best automated system for your business can, therefore, become a real challenge, especially considering the fact that there are so many solutions out there.
Here at Bezos, we have state-of-the-art fulfilment software that’s more than capable of doing much more than automating simple tasks. What’s more, we’d be more than happy to have our software help your business grow. That’s why you should reach out to us today, and we’ll make sure that your store’s needs are adequately met.
Conclusion: Paving the Way to Success With Automation
The reality is that automation is the type of technology with the potential to revolutionise how entire industries operate. Most of that potential has already been unblocked, but there’s still more to come.
As an eCommerce business owner in a highly competitive market, utilising the automated inventory management system can be a great advantage. Not just because of what the system is capable of but because of what it can become in the future.
FAQ:
What is an automated inventory management system?
As mentioned before, an automated inventory management system is software or a tool that helps keep track of inventory levels in real-time. Aside from that, the system automates repetitive tasks and ensures that everything is up to date in accordance with any sales or inventory procurement.
What are the four types of inventory management systems?
How businesses manage their inventory mostly depends on their organisational needs. However, the most common types of inventory management systems include:
- Just-in-time management (JIT)
- Materials Requirement Planning (MRP)
- Economic Order Quantity (EOQ)
- Days Sales of Inventory (DSI)
What is AI in inventory management?
It’s not uncommon for automated solutions to be powered by AI (Artificial Intelligence). In this particular case, AI is used for its machine-learning capabilities so that the automated inventory system can learn from the data it is provided with and adapt on its own to any change without the need for manual updates.
