For every business, achieving revenue goals and increasing customer satisfaction is directly linked with how efficiently they can push out finished product inventory and source raw materials for rapid production. Inefficiencies in inventory management and production often cause disruptions in the supply of goods to retail markets and end users.
With the advent of technology in the business industry, there has been a major improvement in raw and finished product inventory management, order tracking, and product delivery and dispersal worldwide. From basic information systems to business intelligence and smart decision support systems – the evolution in inventory management technology has not only helped implement strategies effectively but also resulted in increased productivity, better control over resources, and superior customer satisfaction. Continue reading to discover various inventory management solutions SMBs and startups should invest in.
Why Do Small Businesses Need Inventory Management Systems?
The unprecedented surge in e-commerce sales, totaling $5.7 trillion in 2022, necessitates smart inventory management systems adoption by small firms to thrive in the fiercely competitive digital marketplace. Small businesses often fall behind in setting up smart inventory management systems due to the misconception that these systems may require large investments. Thanks to cloud-based systems with a pay-as-you-go model, small businesses can leverage technology to manage business operations more efficiently.
Smart Inventory Management Solutions Small Businesses Should Invest In
As technology progressed, inventory management systems became more sophisticated. Businesses no longer require documenting customer orders and shipments on paper or tracking down individual items. Here’re seven tech-driven inventory management solutions every small business should invest in:
1. Bar-Coded Inventory Tracking and Management
Businesses can now use a handheld barcode scanner or a barcode imaging engine integrated with simple ready-to-use inventory management systems to track inventory inside warehouses and at the point of sale. Although barcode technology has been around for more than two decades, it continues to be one of the least expensive and most cost-effective inventory management solutions for small businesses and startups.
A simple barcode can be linked to an array of data related to the product name, type, category, price, location, and quantity available in the warehouse. This makes managing on-hand finished products and raw material inventory incredibly convenient. For businesses that supply finished products to retailers, the data collected from handheld barcode scanners through point-of-sale systems can be received over the internet to forecast demand and supply. Using handheld barcode scanners, employees can easily track and locate items stored in warehouses. The scanned barcode will offer a comprehensive picture of the product quantity available at the warehouse, which lets management decide how many additional units they need to produce to balance supply with market demand.
2. SaaS-Based Inventory Management Solutions
Software-as-a-service has overturned the use of conventional client-server desktop applications. SaaS services provide new options for SMBs at a low cost. Small businesses can easily implement cloud-based solutions through pay-as-you-go models without making huge investments. Businesses can scale up or down the software’s use to meet operational requirements. Since it’s the software provider’s responsibility to maintain inventory management solutions or update features, small businesses don’t need to hire an experienced IT team to manage and maintain the software. Service providers can integrate custom features to align with business policies and strategies. Most of all, these cloud-based solutions are accessible from any part of the world, and you can access, monitor, and manage inventory information irrespective of your location.
3. Point-of-Sale Tracking on Downstream Supply Chain
A point of sale doesn’t always mean the systems installed at retailers’ checkout counters. Businesses of all types use point-of-sale systems in warehouses where transactions like order fulfillment and shipment are completed. POS solutions are some of the most cost-effective and simplest solutions to manage inventories and track sale orders and shipments. These systems typically work on a basic formula of subtracting the number of items sold and dispatched from warehouse inventory and adjusting the on-hand inventory count accordingly. Using this basic software, small businesses can check their stock levels, track sales patterns, and keep their inventory information updated.
In more advanced AI-powered point-of-sale systems, businesses can use real-time data from markets and historical sales data to make intuitive decisions related to restocking, purchase orders, and supplier selection for sourcing.
4. Radio Frequency Identification System for Inventory Management
In a tech-driven business world, no business can take a solo flight without collaborating with the entire vertical and horizontal supply chain. Radiofrequency identification (RFID) technology helps small businesses streamline inventory management and logistics in both upstream and downstream supply chains. RFIDs are simply tags with digital circuitry or microchips attached to products in retail stores and warehouses. These tags can detect the item’s movement as they pass through RFID scanners, empowering businesses to control and track inventory within the warehouse and points of sale. Businesses can use a combination of inventory management solutions and integrate RFID technology to maximize efficiency and increase data transparency.
5. Integrated Systems with ERP and CRM
Enterprise resource planning systems, both client-server and cloud-based models, have proven to be the most effective software solutions for managing core business operations smoothly while complying with international business standards. These enterprise-wide solutions integrate several essential business modules on a single platform to ensure a seamless flow of information among all departments, including inventory control, sales, finance, sourcing, logistics, marketing, customer relationship management (CRM), and production. These sophisticated systems provide built-in reporting, order tracking, supplier management, real-time production data, and tracking of accounts payables and receivables, along with state-of-the-art inventory management solutions. Cloud-based ERP systems offer a single platform for internal and external supply chain partners, allowing organizations to execute push and pull sales strategies as well as the idea of just-in-time (JIT) inventory in their true essence.
6. QR-Code Inventory Management
QR-code inventory management is another extremely cost-effective and easy-to-implement solution for small businesses. Since QR codes contain more precise information and are easier to scan, they are expected to change the traditional scanning and tracking approach. Moreover, QR codes offer a greater level of information encryption. Instead of using specialized devices, employees can use mobile devices to track warehouse inventory.
Robotics is revolutionizing all fields of business, particularly manufacturing. However, recent technological developments have resulted in the invention of intelligent robots that can help businesses streamline operations and eliminate the need for manual labor. Warehouse robots use advanced navigation techniques, hi-tech sensors, cameras, and scanners to locate and move inventory items in a warehouse. They can be fully integrated with existing ERP and SCM solutions to update inventory records, including item quantity, location in the warehouse, batch and lot number, and production date. While large-scale businesses have already started using robotics in warehouses, small businesses can adopt this technology to reduce operational and labor costs and increase information accuracy.
As technology continues to penetrate all areas of businesses, small businesses and startups can benefit from the latest innovations and smart inventory management solutions to have more control over their resources and make informed decisions related to production, sourcing, product dispersal, and sales. By using the aforementioned tech solutions, businesses can streamline their warehousing and inventory management operations and increase agility in the downstream supply chain. We hope this article will help you adopt the right technology that resonates with your business needs and provides maximum support in increasing your revenues.