Inventory Management For Businesses
Inventory management for businesses is one of the most important element to determine the success of a business. Too much or too little inventory can be detrimental to a business. The use of business management solutions such as SAP Business One is crucial to ensure that your business maintains just the right amount of inventory for business continuity.
Why Inventory Management Is Crucial For Businesses?
Optimized Inventory Level
Keeping track of inventory movements will enable you to understand the speed of inventory consumption which will translate to improved inventory forecast. This means you do not have a surplus of inventory which ties up your capital. Having too little inventory can also be problematic as you will potentially lose customers due to insufficient stock. In order to strike a fine balance, an inventory management solution like SAP Business One will be able to help you forecast and initiate suggestions when inventory levels are not at optimized levels.
Analysis & What-If Scenarios
If you are going to take on additional inventory due to special offers or discounts or incentives from your suppliers, you are probably going to think about how fast can these inventory move? SAP Business One gives you a 360 degree of your business, so you can simulate a scenario if your business is able to consume these inventory at the speed of your purchase. The ability to do what-if scenario means that you have insights and data to make informed purchasing decisions – which minimizes your risk of overstocking.
Business management solutions like SAP Business One integrates all the different departments in one single solution – which means you have data flowing across seamlessly. This, in turn, means that you will be able to forecast sales figures and demand from customers. All information is not silo-ed to a specific department, so the information sharing will enable a more accurate forecast.
Issues Most Businesses Face with Inventory Management
For businesses with a small amount of inventory (SKUs), it may be still be manageable as there would not be too much variations and planning around your inventory. However, manual inventory managemnet can be very challenging for businesses with a large variety of SKUs – example if you are stocking up on spare parts, consumer goods or industrial items (Just think of all the different sizes, colors, lengths, types, suppliers) it becomes very difficult to manage.
Manual data entry also opens up the possibility of data entry errors, human errors and mistakes, supply chain inefficiencies and the inability to have real-time information on inventory level at any point of time.
Traditional inventory management requires stock take on a regular basis, which is both time consuming and some times inaccurate. With a business management solution, your stock take is a reconciliation process that can be done periodically and your system will help you to know your stock levels even without you neding to physically walk to the warehouse!
Benefits of Inventory Management Solution
There are plenty of benefits having an inventory management solution such as optimized inventory levels (so your capital is not tied down to having excess inventory), improved cash flow, lower cost of operations, improved morale amongst staff as you become more efficient and systematic in managing overall inventory and more!
If you are thinking about inventory management solution and how it can help you, take the first step by speaking to us – our vast experience in implementing inventory management solutions coupled with best practices for the industry will be a definite plus for your organisation.
SAP Business One is an affordable Enterprise Resource Planning (ERP) software designed for small to midsize businesses. As a business management solution, SAP Business One streamlines business processes, provides real-time information, and help boost overall business performance. The solution covers finance, sales, customer relationship, purchasing, procurement, inventory and manufacturing in one centralised system, enabling accurate and precise information retrieval that assist in reporting, forecasting and analysis. Read More on SAP Business One