So how do we choose an inventory management software given the barrage of ads that we have to sift through with a simple google search. Here are some simple ways of doing exactly just that.

Everyone has a Stake on Your Inventory Management Software Choice

Stakeholders are the people or group of people who have a vested interest in your business. So, basically this includes everyone in your company, your customers, your suppliers, and everyone else in between. Now that we know who they are, exactly how do we appease them with something that seems as immaterial as your choice of inventory management software? To answer that question, we first need to understand exactly why inventory management is important.

I like defining inventory as the lifeblood of a retail business. Of course, any business can have a functioning inventory system, however, I argue that it is not as important for them as it is for retail. To understand the flow of inventory in retail, we are going to need an example. For instance, in the case of the simple corn soup, how does it move from the cob on the cornfield into the warmed tummy of a happy corn connoisseur?

Like most food we consume in the modern world that we live in, corn is grown in a farm. The corn will be purchased by the corn soup company in bulk and process it in one of their factories. The retail store will then contact the soup company for an order. At this point, I would like to pause to highlight an important point because the inventory management system has already kicked to gear. If one was to be asked when exactly inventory management came into the picture, a common guess would be the instant that the store staff made the call. As you might expect, this is not true and that is because inventory management happens way earlier than that. Inventory management is not just the management of inventory per se. It also includes the whole decision process that goes through whenever there are changes in the inventory in the system and that includes the decision to make a purchase. 

Continuing down the line with our corn soup example, after the order was made the store will then expect a delivery either by the suppliers or the shop’s own staff. This is also an important aspect of inventory management and could spell trouble for the store if improperly logged. What I am talking about of course, is the supplier reliability. Because suppliers have processes of their own and they may or may not be able to keep up with their commitments, it is up to the store to have a profile of their suppliers. This way, they will be able to get three critical pieces of information from each supplier. The first one is the average minimum delivery time or the earliest possible time for the supplier to make the delivery. The second is the maximum delivery time, which, despite its positive connotation is actually negative. And finally, the average delivery time that is computed by averaging the delivery times for each instance. At first glance, you might think that having the supply delivered to you as fast as possible each time would be preferable. That is not true however, because the most important factor is actually predictability. Whether the supplier delivers early or late won’t really matter unless the store can accurately predict when that stock will arrive. And, expectedly, stores that always deliver on time, not earlier, should be higher up the supplier choice.

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Find Your Inventory Management Software Needs

As with most software available in the market right now, the many choices give you a variety that might overwhelm you. When this happens, the first thing you have to do is to keep hold of your money and be careful from being sweet-talked into buying inventory management software that you may not actually need. So, how do you choose the best inventory management software? The answer is simple, you find out based on your requirements.

The first step is to gather data about the existing inventory management system that you already have. Whether you already have a digital inventory management software in place or not, you should have a clear bird’s eye view of the entire cycle. Gathering information does not only include looking at, and crunching the data that you already have. What may be more important, is to put into pen and paper the process that you follow. You have to interview the individuals involved, from the store clerk to the stockroom supervisor. They know best how the process goes and they should be able to explain the current setup in a simple manner.

After gathering enough information, the next step is to breakdown the process and find out how to best augment it with inventory management software, or if you already have one, an upgraded system. Here, you can break down your necessities and map them into inventory management software features that you would like to have. Then, you can make a list to submit to your software acquisition team so they can present you with options. Finally, have them make a demo for your company in particular. Take note that the personnel should be there and be allowed to have their say as they would be the ones who would directly be affected by the changes it brings.

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