Inventory refers to the goods stocked for future usage. Every retail chain has its own warehouse to stock the merchandise to be used when the existing stock replenishes.
Inventory management is an intricate process, particularly for the retail industry, but the basics are essentially the same irrespective of the organization’s size or type. In inventory management, goods are brought into the receiving area of a warehouse in the form of raw materials or components and are put into stock zones or shelves.
Inventory management uses a range of data to keep track of the goods as they move through the process, together with lot numbers, serial numbers, cost of goods, the number of goods and the dates when they move through the process.
Managing inventory also helps the retailer during circumstances beyond control like transport strikes, curfews etc. The retailer has sufficient stock as a result of judicious inventory management even at the time of crisis.
Different Types of Inventory
Inventory of materials occurs at various stages and departments of an industry.
Types of Inventory by Function
A need of inventory Management software
- Increase in Efficiency: Without organized inventory management, you are paying your employees to dig through files, email spreadsheets back and forth, run out to the warehouse each time there is a question about what’s in stock, or manually write reports on a daily basis. Instead of paying them for these errands, you could easily eliminate them by implementing a good inventory management system.
- In-time delivery. The core value of using inventory management software is being able to hit delivery deadlines, and avoiding customers from waiting ages for their shipment to arrive. Advanced programs will even include them in the process, giving them a realistic picture of the status of their order, and allowing them to track the product’s movement from purchase to arrival.
- Accurate planning and forecasting. Inventory management systems aid one plan ahead and become more proactive, as they track the status of the products, manage negative trends and chances, and retrieve vital historical data to predict the progress of the sales.
Features of Inventory Management Software for Retail Industry
- Basic Inventory Control: Using inventory codes speeds up data entry. The codes are related to the correct income and cost accounts, so there is no presumption by sales staff in which accounts to use. It means reliability and increase in speed of sales order and purchase order entry which can be done by numerous people in the business
- Order management. Retailers can manage their sales and purchases from the same system, track orders and control stock levels, and even bill and invoice their customers.
- Categorization of products. One can transfer products between different groups and channels, and make them easily searchable by type, name, price, date, supplier, status, and many other filters. Better yet, the feature ensures full stock control, as it allows one to forecast demand, and make precise orders from your vendors.
- Alerts & Forecast: Since sales are being tracked by item code, the business owner can get an alert when stock shortages are likely to arise and put in orders to ensure that the stock is replenished in time. It also means that forecasts of required stock levels avoid over-ordering as well so that valuable cash isn’t being tied up unnecessarily in stock. With the proper tools in place, one can learn more than just which products are selling and which channels are performing. It also provides essential information to help keep more accurate levels of inventory and make better decisions about what and how much to buy.
- Barcoding & Scanning: Increasing daily orders can be exciting, but it can also lead to holdups if you’re not prepared to process and fulfill those orders efficiently. Retailers who are dispensing higher volume of orders look to streamline their processes even more by implementing barcoding and scanning at the pick/pack/ship stages.
Inventory Management for Pharmacy: CASE STUDY
Mr. Arun Dash is a pharmacist. He owned a small pharma where he used to do his accounting manually. He once bought medicines in bulk. And so the variation in expiry dates. There were some medicines which were sold faster than the other. He was unable to identify which way he can sell his medicine so that the medicine with nearer expiry date would be sold first. So, the end of the month he was left with so many medicines which were past their expiry dates and a bunch of medicines which remained unsold. And he was unaware of the medicines that ran out of stock.
With the help of GST Accounting Software by SlickAccount, he was able to solve this issue.
He entered all the details of medicines, in his different warehouse into the SlickAccount’s journal, and all the information were sorted by FIFO (first in first out) order with an expiry date, mfg. date, date of arrival, batch number, and some other parameters as well. With the help of the software, he now has the data of all the medicine’s expiry date and which one to sell first.
Due to the generation of multiple invoices, he now knows which of his medicines are needed in the market more than the other. And hence, he buys that medicines more.
Now he gets alerts when his inventory is running out of stock and that he should refill his stock. He gets notifications when his medicines are nearing expiry date or are expired so that he could now return them to a wholesaler in exchange for money.