More companies are putting in a system to get control of their inventory - what should they be looking out for to choose the best inventory software to replace the pen and paper currently being used?
What is inventory software and who is it for?
The best inventory software is suited to any business that has inventory to control. It is particularly relevant to companies with a warehouse that has stock in it. You will hear the terms inventory system as well as inventory software. The difference is that when referring to it as a system, things like the barcode scanners and barcode printers are included to make the software work. In this article we will focus on the features of the best inventory software.
Firstly, warehouse management software is the next step after inventory software where the system places a greater importance on features like location/zone picking, sales order allocation and advanced replenishment. It will often require integration with the host business system (also sometimes called ERP, enterprise resource planning, system and accounting system, like Sage). The best inventory software packages can be integrated to the ERP systems and then upgraded as you require the warehouse functions mentioned above.
What is the best inventory software for my business
>> Basic: The entry-level inventory software can be downloaded via the Internet or purchased ready to work out of the box. The main advantage of this type is the rapid deployment; the main disadvantages of them are that they typically can not integrate with your other business systems and lack flexibility.
>> Standard: This type of inventory software can be rented for a pay monthly fee and accessed via the Internet or purchased upfront and installed on your servers on your warehouse site. Typical features include registering and receiving inventory for goods in, movements, stock take (also called stock count or cycle counting), inventory adjustments, electronic picking and returns. These software types are capable of integration and flexible in how they can be set up. This package type tends to be the best inventory software for the mid-market, with the possibility to add functions as they scale.
>> Advanced: The most advanced systems are made for companies where the warehouse and stores are the core of the business. This is particularly true for ecommerce companies, web shops. Features include sales order allocation, advanced replenishment, multi-modal picking (e.g. zone picking, multiple order picking at one time), conveyor control and third party shipping integration. This type of system is typically customised to the Client requirements but is not quick to deploy as a result, with project typically taking 1-3 months. If you have an operation doing greater than £3m, this is often the place to start as it definitely is the best inventory software and will revolutionise many operations.
Define objectives and match to inventory software features
You must firstly identify the problems or challenges that you are facing in the warehouse. Below are some examples of problems that we hear regularly defined as project aims to overcome and the modules that are built to meet them:
>> For companies picking the wrong products and sending out incorrect orders, then electronic picking and scanning to despatch is required.
>> Where the monthly stock take is a pain, a system with perpetual inventory counting can help to spread the workload.
>> Some companies have to process a large number of returns, for them uniquely serialised barcodes can automate that whole process saving hours and preventing different items being returned that look the same.
Some systems will be more configurable and modular than others, making it possible to turn functions on or off as and when you need them. This can be a particularly useful ability as your operation grows as the system can scale with you.
Integration - make sure it is quick and easy
Integration with the host system (e.g. Sage, Xero, Kashflow, Microsoft Dynamics, SAP) is important, as this is what will give you live inventory figures that are accurate. Inventory software with a defined integration framework that is documented makes 'talking to' the other software that you use (e.g. your accounting package) much easier.
The key fields that you need to know for integration are sales orders, purchase orders, suppliers, customers and products. The host system does not need to store warehouse locations. This is because the host system should not be concerned with the location of products, only the quantity. Knowing the exact product locations is the job of the inventory software.
Some commonly used modes of integration are web services, open APIs (application programming interfaces) and importing/exporting flat XML or CSV files. For the best inventory software that has been integrated before, integration typically takes 2-10 days in contrast with an advanced warehouse management software that is typically between 10-40 days work.
Inventory reporting - flexible, rich and relevant to YOU
Inventory software should help you to know exactly what inventory is where and give you maximum visibility on it. Here are some examples of how different software packages provide reporting:
>> Basic software will enable you to export your data into excel or similar to create graphics yourself. Reporting is functional as the data in the system is basic. Some software will also produce some pretty graphs and tables, particularly the web-based ones.
>> Standard software will come with some in-built reporting functionality, usually in the form of a dashboard. How configurable these reports are will vary dramatically between different software providers. Expect to be able to export in multiple formats such as PDF, Excel and CSV. Exporting to Crystal reports is also very standard these days, although less companies are wanting this as the inventory software is providing this now.
>> Advanced software will extend the reporting functionality to include metrics like picks per minute and distance travelled per pick. All these will be available in the formats described above.
When considering reporting capability, smart-phone compatibility is increasingly popular as it allows sales teams and top-level management to get accurate inventory and order visibility when on the road.