Inventory Management Software for New Zealand (All You Need to Know)
- What is Inventory Software for New Zealand?
- What Does Inventory Management Software do?
- Who Uses Inventory Management Software?
- What are the Benefits of Using Inventory Management Software?
- What is the Process of Inventory Management?
- Factors to Consider When Choosing Inventory Software
- What are the Features of Inventory Software?
- Additional Tips for Implementing an Inventory Management System
- Conclusion
- Frequently Asked Questions
What is Inventory Software for New Zealand?
Inventory software for New Zealand is a business software that is designed to optimize the overall inventory management process in the supply chain in New Zealand. This means that inventory is tracked and managed. The entire process from the purchase of material to production, warehousing and the delivery to the customers, is managed through this helpful software.
In the manufacturing and distribution sectors, inventory is one of the most important aspects of business management, due to the fact that the value of the balance sheet is highly concentrated in this area. This leads to the premise that there is a need to focus and manage inventory continuously. Following, will be a discussion to understand detailed aspects of inventory management software such as users, types, features and how they help to manage business processes with higher efficiency.
What Does Inventory Management Software do?
Following are some of the functional aspects of inventory management software:
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Warehouse management
Since goods need to be stored somewhere, the space for goods can be a major problem in warehouse management. This is when implementation of advanced inventory software can provide intelligent information to consider, such as how to manage specific quantities in the warehouse or if you should request delivery at once or in portions. Furthermore, specific products can instantly be located via the software. This is in contrast to using manual inventory management sheets which has the potential for many errors.
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Reordering
This feature of the software allows the business to fix a certain threshold for each product. This generates an alert for when the minimum level has been reached and an alert will be made to enable the manager to decide whether to order more goods. In the same vein, alerts can be made for product expiry dates which sends an alert for products reaching their expired date. The software is responsive as it can even send automatic orders to suppliers when the reordering point it reached.
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Accounting system integration
A very versatile feature of the inventory management system is that it can be integrated with accounting software. So if a sale is made for product A, in the accounting software, sales will be credited and the sold units in the inventory management system will be decreased. This enables the accurate update in the inventory management system and will reflect the live quantity of goods. This kind of automation leads to higher accuracy and business efficiency.
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Forecasting
Inventory software enables recording of seasonal variations, trends and other sales aspects. This allows the business to predict sales and demand with higher accuracy, with the added bonus that things can be managed in advance.
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Product-wise cost analysis
This feature of the inventory software is handy if you are managing a production-related business as it allows the generation of the cost break up of products. It helps the business to understand which components of raw materials are costly and also what mix of raw materials have been used.
Overall, inventory management software helps to maintain effective warehouse management, timely reordering of goods as well as creating an ease in the overall business management. If the business is in the manufacturing and distributions industry, the importance of the inventory management system increases. There was a time in the recent past when large companies would manage inventory with manual sheets. Now, however, there is an increasing trend to execute inventory management with the software even among small business owners. Following will be a discussion regarding the users of inventory management software.
Who Uses Inventory Management Software?
There is an increasing trend in the use of inventory management systems. Even small businesses have started to implement an inventory management system to execute and streamline their business operations. It is important to note that the inventory management system is more relevant when the balance sheet is more concentrated on inventory. Often, manufacturing and distributions companies use an inventory management system to execute inventory management. Sometimes, service industries can make use of these systems when they are required to use valuable inventory in the execution of their services.
In the production industry, an inventory management system is more relevant since they need to manage different aspects of the production material and in addition, there may be different types of raw materials used in production. Similarly, there may be many overheads, so it is vitally important to keep check of the inventory level. Not doing so would lead to the potential problem of a halt in production. In addition, the cost of the manufactured product is a challenging task as so many factors are included in the process. Such things include, raw material, labour, production overheads, non-production overheads, normal loss, abnormal loss and much more. This is not an easy task to execute manually. This is where an inventory management system can be extremely beneficial. As it helps in the overall process, there are massive gains associated with implementing an inventory management system.
What are the Benefits of Using Inventory Management Software?
Following will be a discussion of some of the basic functions and features of inventory management software:
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Higher accuracy
There is high accuracy from using an inventory management system. Since the levels of stock are able to be seen on a single screen, in real-time, it helps the business to make a decision on whether the business is required to order more specific inventory. This ensures that the business will never experience a lull in the inventory stock pile.
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Sales tracking
Inventory software helps to analyze the speed of sales and therefore this leads to effective control over the warehouse and purchase monitoring. For example, if sales of some products are increasing, then the business can speed up its production.
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Centralized control
The single screen of the inventory software helps to analyze the location, quantity, sales trend, value and quality of the inventory owned by the business.
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Higher automation
The inventory system allows an alert to be generated when the business is not able to sell a certain product, and the expiry date is looming. Similarly, automatic orders can be placed to the suppliers if products reach a certain threshold. These characteristics in the software leads to higher automation.
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Real-time monitoring
Real-time monitoring helps to manage production and effective order management. Product-wise sales trends helps the business to see if there is a need to order more of a specific product. Another aspect of this feature is that it allows the business to see the speed of product movement (sales) which in turn helps to make certain business decisions.
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Higher productivity
Inventory software is capable of alerting when inventory reaches a threshold. It can even directly place an order with a supplier once a threshold is reached. This inevitably leads to lower manual work and higher business efficiency.
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Cost control / higher profit
Profit management is optimized because the software helps to ensure that inventory items are not overstocked. In this way, warehousing costs can be controlled and the cost of obsolete inventory can be kept to a minimum.
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Better customer service
Due to the fact that inventory management software allows the business to be in a situation where inventory is managed effectively, this will lead to effective business management. The business relationship with customers is enhanced and the customer’s trust in your business will increase because there are fewer chances that the business will run out of inventory.
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NRV calculation in accounting
NRV which stands for “Net Realizable Value” means that inventory should be recorded at lower of cost and realizable value. The inventory management system comes with the ability to execute NRV testing. So the software can generate alerts about products that need to be recorded at below cost.
In summary the main benefits of inventory management is to enhance business productivity, implement controls, and ensure that the entire process of inventory management is executed effectively.
Next, we will explain how inventory is managed using the software.
What is the Process of Inventory Management?
Inventory management refers to the overall process of ordering, receiving, managing, warehousing, manufacturing and then dispatching inventory to the customer. Inventory management systems helps by streamlining and optimizing the overall process. Some of the optimizing methods are listed as follows:
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Purchase needs forecasting
Inventory management systems has the ability to monitor all the product sales trends and also the ease or difficulty that the business has to execute sales for a particular product. Take the example where it takes 3 days to sell product A and 50 days to sell to product B, on average. The inventory software will take this data, keep it in its memory and then use those statistics to predict demand for the products. Seasonal variation is also incorporated into the forecasting. Since the predictions are made on the basis of real data, there are higher chances of accuracy in the predictions that the software makes.
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Reorder quantity
Reorder quantity or the amount to be reordered for certain goods is dependent on sales trends, space availability in the warehouse, and time of delivery from the supplier. The inventory management system is smart enough to suggest the best economic order quantity to ensure ordering costs and warehousing costs are kept to a minimum.
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Lead time and ordering cost
Order costs can vary and be much higher in cases where products are imported from overseas. Inventory management can help in this situation by helping to create a balance between costs.
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Product identification
By setting up an alert in the inventory management software, you will be able to see products that are reaching expiry soon. For instance, you might set an alert to be notified of a product expiry, 30 days prior to the expiry date. This helpful feature will ensure that the business will be able to take certain steps to sell the products on a timely basis.
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Threshold maintenance
An inventory management system comes with the ability to generate an alert when a threshold is reached for specific products. An example of an alert might be to order more for product A when 5 units are left, and product B needs to be reordered when 10 units are left. Another innovative feature is that your inventory management system, can be linked with the inventory system of the supplier, so that automatic orders can be placed once the maintenance threshold is reached. This remarkable idea of linking an inventory system with the supplier helps to execute a “Just-in-time” (JIT) inventory system. So, for instance a customer places a sales order and the sales system is updated. Since your sales system is linked with the suppliers system, the order is placed to the supplier directly.
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Asset tracking
This feature can be especially useful if the business has many warehouses and points of sale. Asset tracking can show where a specific product is placed in real-time. This feature, for a large company, being able to locate the product is no less than a blessing.
It is important to note that effective inventory management is essentially about overall supply chain management. Warehousing is an important aspect where higher costs are incurred and efficient warehousing strategies will need to be implemented. Warehouse management strategies along with complete supply chain management can be implemented with the following types of software which will be discussed as follows:
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RFID Warehouse Management System
RFID stands for Radio Frequency Identification. It is a smart warehousing software that helps in warehouse management. This system involves using radio frequency to track and locate the items in inventory. It is able to provide live data related to specific shelf positions, live visibility and locations of products. This technology can save time in the overall process of controlling inventory movement and storage. In addition, it makes it simpler to manage inventory. A great advantage of this system is that this technology has higher accuracy in the movement of inventory and ensures protection from theft.
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PPE (Personal Protective Equipment) inventory management software
This system is specific to PPE inventory and is important for businesses that need to manage PPE at different locations. One such example is in the construction business. Due to the nature of the construction industry, they will need to manage their equipment at different working sites. Various commands can be set to enable the software to work. For instance, a system can generate an alert in the situation of when a worker is not using protective PPE while working. An automatic alert can also be generated if PPE is moving away from a designated area or where it should not be. This software process will help to ensure that the right use of PPE is made at all times while also controlling theft of equipment.
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Centralized Inventory Management Software
This system is primarily used for companies that maintain centralized inventory, which means that the inventory of the business is situated at a single location and all dispatches are made from there. This software is advantageous since while using this software, a single screen can provide comprehensive control of the status and movement of items. For example, there may be an option to have a common view of inventory across POS, market channels, e-commerce stores, and the location of inventory in the warehouse. The level and pattern of the inventory movement, productivity and dispatches can be analyzed on screen.
All of the above inventory management systems are useful and effective depending on the type of business and how you would like to manage inventory. Before a business considers the implementation of an inventory management system, it is vital to check compatibility before a decision is made.
Another consideration that must be made before implementation of the system is to judge whether the business is able and ready to manage data in-house or if there is a need to use a cloud server for the data storage:
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Offline / in-house data storage
This happens when your inventory data is stored in-house or you have in-house servers /computers to store and manage the data. To give some context, you may have seen IT rooms in companies that are filled with many computers. These are actually the servers used for storing the data. Additional measures, however, must be taken, such as aspects relating to physical security, cyber security, firewalls, data back-ups and so forth. This option is good, but can tend to be expensive. So, it is recommended that you manage your business at a higher scale.
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Cloud based / online data storage
This occurs when your inventory data is stored in a cloud or some other remote location. Usually service providers take care of the data that is stored, on their servers. It is their responsibility to ensure system maintenance, security, data back-ups and all facts related to data is updated and secure. The best feature about using cloud based storage is that data can be accessed in a few clicks with the help of a computer and internet connection. Moreover, this option is cost effective as data is stored in a shared hosting server. However, since you will be relying on the service providers to keep your data storage secure, there will be a need to do due diligence and choose credible and reliable service providers that are fit for your business.
There are many factors that need to be considered before opting for any specific inventory management software.
Factors to Consider When Choosing Inventory Software
Since implementing inventory management software can be a crucial, yet, big commitment, it is useful to ask yourself the following questions before making a final decision on which software to select.
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What is the size of my business?
If you are managing a small business, it is advisable to implement a cloud-based system. Even with a basic version of inventory software, it will come with features that include scanning, tracking, controlling stock movement and keeping an overall record of inventory management.
If you are running a large business, there is a need to implement sophisticated software that will offer a higher integration, thereby leading to effective management.
What type of inventory software are used by large corporations?
Generally large corporations use ERP software. This software gives a higher flexibility in operations management as it is a highly integrated and sophisticated software. In the software, will be different modules that all help to speed up overall business efficiency. Besides inventory modules, there are different modules in the ERP that are integrated. For example, if you record sales in the sales module, the product is automatically adjusted from the inventory record. This ERP software is highly recommended for large corporations.
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Is there free inventory software?
The answer to this question is “yes”. In fact there are many free programs which can be found on the Internet. However, there will be limited features in the free versions. If you are going down the route of implementing free software, then it is advisable to implement a free version at the start, and then upgrade later when you have learned how to use the inventory software effectively.
Understanding the following features can help to implement compatible inventory management software.
What are the Features of Inventory Software?
Listed below are some of the essential features that need to be considered when implementing inventory software.
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Barcode scanner
In a bar code, numbers are stored that can be detected by the system. The software should have the ability to connect and work with the barcode scanner. It should be compatible to read code, detect an item and record the entry.
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QR-code scanner
The purpose of a QR code is the same as for the bar code. The difference between the two is that a QR-code can store more data, however QR-code scanners are more expensive. Most inventory management systems are compatible with barcoding as it helps enough in effective inventory operations.
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Real-time inventory tracking system
The software needs to have a real-time tracking feature that allows the ability to track inventory on a real-time basis. In this way, the software should track and know where a specific inventory item is located.
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POS (point of sale) integration
The software should be compatible with POS integration as it allows the inventory systems to be automatically updated when sales are recorded. This feature is essential and acts as a primary factor for the execution of advanced inventory operations.
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Inventory forecasting software / smart inventory management system
This smart feature is expected from an advanced inventory software. It allows the business to predict stock movement while ensuring that the business does not go out of stock. The system considers relevant factors while calculating demand, such as seasonal variation, trends, marketing budget and others.
Additional Tips for Implementing an Inventory Management System
Following are additional tips that should be put into consideration if you are looking to implement inventory management software:
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For SMES
If you are managing a small business, it is ideal to implement an online or cloud-based inventory management system. This is due to the fact that this software will be fast and reliable, while at the same time, being cost effective.
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For Enterprises
For larger businesses, at any period, there will be thousands of transactions, which means that it can be difficult for a business to manage inventory. This is why it is ideal to choose a software that has higher integration. This integration can lead to higher accuracy and higher speed of operations. Indeed, it is a good idea to implement ERP for large businesses so that all the functions of the organisation remain integrated and accurate.
Conclusion
An inventory management system concerns the optimization of the overall inventory management system in the supply chain. For any business, there are many advantages in implementing and using an inventory management system.
These advantage include, higher automation, optimization of warehouse management and cost, less chances of theft or error, real-time inventory tracking and much more. Due to the large commitment that may be required, the element of cost will need to be considered when implementing the software.
Frequently Asked Questions
How much does inventory software cost?
The average cost of an inventory management system is approximately NZ$150 per month. The software, with this budget, offers reasonable features and is highly recommended if you are a small or medium entity. On the other hand, inventory software for a large corporation may cost upwards of NZ$150,000+ per month. The features and functions of this more expensive and sophisticated software, are comprehensive, fast and much more reliable.
What is cloud based inventory management software?
Cloud based inventory management software is able to store all your data on a remote server and there is the ability to access this data in just a few clicks. With cloud based inventory management software, the service provider is responsible for ensuring data security as well as other aspects of the data stored in the server.
What is multichannel inventory sync? / multichannel management?
The term multichannel inventory sync means that the system automatically updates the centralized inventory when inventory moves at any of the company’s locations. The system should accurately absorb the movement from these locations and update the main centralized system. This enables more control over inventory and the ability to replace stock when needed.
What is Process Flow in Warehouse Management System?
A Process Flow in Warehouse Management System is concerned with how the activities of the warehouse are managed. It includes documenting how goods are entered into the warehouse, related controls, controls related to the dispatch and paperwork involved in warehousing activity. Generally this system is drawn in a visual format in order to understand the flow of the goods into the warehouse and to see if there are any flaws in the system that needs be improved upon.
In the process flow, different stages of warehousing are drawn. If the business is complex, the expected stages would be higher. The usual stages of warehousing include goods handling, reserve warehouse, quality control, production control, packing, dispatch and shipping. If there are gaps in any of the stages, this will indicate the situations where improvements can be made. However, this system is manual and therefore, much time is consumed in order to manage the warehousing.
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