Before the digital age, warehouses, restaurants, and companies would manage inventories using plain paper and pencil. They would use proprietary techniques to keep track of things, such as tagging items. Nowadays there are a lot of companies that have decided to move to inventory management software. But the question is how to choose the ideal cloud inventory and then how to implement it?
To be sure, not everyone has gotten aboard the digital train yet. There are those who have partly digitized their process, but others are stubbornly clinging to antiquated methods. Either way, these scenarios could lead to inefficiencies that can be circumvented with an inventory management system.
If what is stopping you from moving forward is not knowing how to implement the digital version of inventory management, we have some tips to get you going. Also, we have come up with some criteria on how to choose the right cloud inventory for your business. But first, let us discuss the key differences between manual and automated inventory management systems.
Manual vs. Automated Inventory Management Systems
There are three main differences between manual and automated inventory management platforms. The first one is the availability of records at all times. You can count on your paper records to be always at hand for the verification of information. Plus, both you and your employees can keep an eye on the ground, so to speak. Meanwhile, with automated systems, you can encounter glitches that could lead to errors in your decision-making.
Another huge difference is the cost. With automated systems, you may need to shell out big bucks for implementation. If not, the monthly or annual cost of SaaS could be prohibitive. On the other hand, relying on pencil and paper is economical.
Lastly, manual systems do not rely on electricity. They can run despite power outages. Even if a warehouse, storeroom, or pantry is dark, the person checking the inventory can still do their job. After all, if they have a powerful hand light, they can go about their task seamlessly. With automated solutions, everything is accessible via a computer, a tablet, or a smartphone. If the power goes out and there is no backup battery or power bank, there is no other way to check on the inventory other than manually.
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How to Choose the Right Cloud Inventory
It is okay to have doubts about moving an existing inventory management process to the cloud. Why make changes when it works? But with proper research, you can be fairly certain your move will be in the right direction. Here are some of the things to consider before taking the step.
Cover Your Specific Requirements
In order to evaluate the inventory management software solutions, you have to create a list. This list will have to include all the key requirements that the inventory software needs to cover – and maybe some that it would be nice to include. The next step is to go through the list and check the requirements one by one to ensure that they’re covered. In case there’s something that doesn’t fit your workflow in the solution that you’re evaluating you should take it up with the vendor. Possibly the vendor will be able to provide some solutions such as custom development. Overall you can expect approximately 80% to 90% of coverage for your features because some of them might not be able to be covered.
There is a wide array of inventory management system examples. It can be overwhelming to the point where you do not know where to start. But when you start shopping around, keep an eye on the platform that meets your needs and can adjust to your requirements. Do not be blinded by bells and whistles that may not be necessary for your inventory management procedure.
Having an Easy Setup
Long gone are the days when installing specialized software was such a challenge that you’d need a technician to walk you through it. These days, you only have to sign up for SaaS or cloud-based software, log in to your account, and start working. There are no more complicated steps to deal with, as online solutions come with predetermined settings. You can tweak those as you need, but even that will not take too much time.
Making Data Accessible
Despite being cloud-based, the best inventory management software solutions should actually make data accessible to you at all times. They save the information offline so you can view them even without an internet connection. This allows you and your employees to continue working, thus avoiding delays in your workflow. All the data they input into the system offline will be automatically synced to the cloud once the connection returns.
Providing Real-time Integrations
Real-time integrations are also significant criteria to help you choose the ideal cloud inventory management. A good inventory management platform would have out-of-the-box integrations or is capable of interfacing with other solutions via API. This allows the system to communicate with other software for smoother exchanges of data. That means no more double entries and a reduced risk of errors.
Providing Data Backups
Your information should be stored in the cloud and should be backed up on different servers. This means that if a system failure happens, you can still get your data back without a hitch.
Generating Insights and Reports
A big advantage of an automated inventory management platform is its ability to generate insights and reports. It comes with a dashboard where you can get a bird’s eye view of updates in your inventory. You can delve deeper into the data by generating ad-hoc reports. Doing so empowers you to gain insights that you could have missed if you had been doing things manually.
How To Implement an Inventory Management System
To implement an inventory management system, there are best practices to follow for processes to go smoothly. During the course, it is important to have consistent stock locations, establish cycle count schedules, and set procedures for counting and verifying inventory. On top of these, you need to factor in your people and provide them with proper training to make good use of your inventory tools.
Consistent Stock Locations
Even the best inventory management tools can fail if not implemented properly. Sometimes, what makes it falter is not the system itself but inventory governance. That can be the case when there are multiple stock locations.
Companies usually allow each one to determine their own inventory levels. But as a white paper pointed out, “These locations can be prone to confirmation bias in establishing stocking levels.” This is inefficient and, therefore, not a good practice.
What you can do instead is to choose an optimal location for centralized stocking. This singular warehouse should be able to cater to different sites. By consolidating warehouses, you can reduce as much as 45% of your inventory.
Cycle Count Schedules
Some businesses prefer to do a final count of their inventories at the end of the year. But there is another counting technique that you can use to make inventory management more efficient. This is cycle counting. This requires checking different products each day, week, or month. What specific items or categories of supplies are to be checked on a rotating schedule depends on you. Generally, though, businesses start with high-value materials. By doing this, you can reconcile stocks routinely and keep healthy stock levels throughout the year. It is also the way that you can avoid inventory risks.
Procedures for Counting and Verifying Inventory
As mentioned above, cycle counting is an inventory management technique that you can use for routine inventory reconciliation. Other methods for counting and verifying items include computer-generated and manual count sheets, portable inventory devices like barcode scanners, and fixture maps. You can test these procedures to see which one really works for you and stick to it.
You need to get your people on board with your inventory management procedures for them to work. After all, those items are not going to count themselves. When you have chosen the best counting system for you, establish a counting frequency by convening with workers. Get their ideas on how to make processes work since they are the ones in the warehouses around the clock. While at it, appoint a trusted employee in charge of overseeing the system.
The same is applicable when choosing an inventory management platform. They will be the ones using it, so allow them to elect a solution that works for them.
Training is crucial when implementing an inventory management solution. Even if it is designed to be intuitive, there may be people who are unfamiliar with a digital management platform. Moreover, training equips them with the latest best practices in inventory management tools and techniques.
Take It Step by Step
Implementing inventory management software is a step-by-step process. At times, you may have to take a step back for whatever reason. But the important thing is to keep going and to ensure that your inventory control workforce is in the loop, too. At the end of the day, the system is meant to make their job go seamlessly, so it is crucial to have their insights for implementation to go effortlessly.