10 Features to Look for in Manufacturing Inventory Management Software
Have you ever ordered something, only to find out later that it's unavailable? It’s frustrating and disappointing, right? Now, imagine yourself in the shoes of a manufacturer. As a manufacturer, you don't want to create a shortage of goods in the market. However, wishes alone won’t prevent shortages. Efficient inventory management is crucial to making your wish come true.
You might be wondering how to choose the perfect inventory management software for your organization. Although the specifics can vary, this newsletter will discuss 10 major features you should look for in inventory management software.
But first, what is Manufacturing Inventory?
The word ‘Inventory’ in manufacturing has distinct meanings. Materials procured from supplier is raw material inventory. This inventory must be managed from the source to the point where it goes to production.
In production there are work-in-progress (WIP) inventory. These are inventory which are under production process.
For example, if a biscuit making company is procuring wheat flour, water, sugar, salt from vendors then it is raw material inventory whereas, the dough it created before making biscuits becomes WIP inventory.
Finally, once completed, final product becomes finished goods inventory.
Why do manufacturers need inventory management software?
A manufacturing inventory management software allows companies to streamline and manage various inventories. With the help of an inventory management software, companies can identify where are materials lying in warehouse, how much is available, what are their expiries (in specific cases), what are their specifications, etc.
By knowing all these information, manufacturer can plan production, or procurement, avert production halt, fulfil customer demands, and deal with sudden supply chain disruptions.
The software also helps to digitize and automatize various repetitive processes, thereby minimizing human errors.
Essential features of inventory management software:
Classification-
Manufacturing organizations require various materials with multiple nature. For example, chemical manufacturing organization have hazardous materials, material with high potency, materials which need special temperature and pressure to store and so on.
With various classification capability, the software should allow to tag and store materials of similar nature under same conditions and different materials in their required conditions. This separation avoids chances of material interference.
Besides, the software also allows classification of materials basis frequency of using it or its value.? Hence, materials used very frequently can be classified as A, less used can be classified as B and so on. ?
This method helps to monitor and check inventory status of each and every category and allows management to take necessary actions for particular category items.
Expiration date maintenance-
In process manufacturing industries, managing inventory expiry is critical. Failure to utilize materials on time?can lead to financial losses and wastage. To address this, effective optimization is required which can be done by monitoring expiry dates using methods like LIFO (Last in, First Out), FEFO (First Expired, First Out), and FIFO (First in, First Out).
Implementing FEFO ensures that materials nearing expiry are used first, minimizing wastage and optimizing resource utilization in process manufacturing operations.
Unlimited SKUs-
An inventory management software must be able to add unlimited items/products. The same goes with vendors, customers, transactions etc. An inventory management software must add value to your growth, rather than hampering growth with limited SKUs.
Physical Count-
Physical counting is essential in inventory management software because it helps keep the virtual and real inventory synced. By regularly checking the inventory, it quickly spots and fixes mismatches which eventually avoid bigger problems.
The software updates inventory data in real-time, making it easier to manage stock levels and avoid running out or having too much stock. Accurate inventory records also support better financial reporting and decision-making.
Additionally, the system should support cycle counts, allowing companies to regularly count small sections of their inventory instead of conducting a single full physical count.
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Multiple Unit of Measures-
An inventory management software must support a variety of units of measure to accommodate different product types and industry requirements.
This flexibility is necessary for accurate conversion of multiple measurements in terms of volume, quantity, weight, density etc. ?For instance, software must allow to measure products in litres, kilograms, or even custom units specific to certain industries.
By allowing users to define and use multiple units of measure, the software ensures that inventory records are precise and consistent, reducing errors and discrepancies. It must also facilitate seamless conversions between different units, streamlining processes like purchasing, sales, and stock adjustments.
Multi-location inventory management-
An inventory management software must effectively handle multi-location inventory management to support businesses with multiple warehouses, stores, or distribution centres. This feature provides a centralized system to monitor and control inventory across all locations, ensuring real-time visibility and accurate tracking.
The software should enable seamless inter-location transfers, allowing stock to be moved efficiently between locations based on demand and supply needs.
By synchronizing inventory data across all sites, the software reduces discrepancies and improves coordination, helping maintain optimal stock levels everywhere.
Multi-location management also improves customer service by ensuring products are available where needed, enhancing overall operational efficiency and responsiveness.
Accurate inventory details and reporting-
Inventory management software must provide accurate inventory details with thorough and real time reporting. ?This includes stock in hand, inventory cost, real time location, inventory classification, inventory in transit etc. These details are important for interdepartmental decisions like production, procurement, sales, delivery, accounting etc.
Besides, the software must provide critical alerts regarding inventory stock status. This feature prevents deadlock situations in production by providing alerts for low critical ingredients or components, and issuing near-expiry alerts.
The system should also generate a requisition as soon as the quantity of the material follows below the specified re-order quantity.
All this saves valuable time and resource that would otherwise be spent on manual stock supervision.
Barcoding and reading-
Barcoding is vital in fast moving business landscape. Implementation of this technology reduces time and manpower used in data entry. It also reduces chances of human error and effective time to train resources.
Barcoding and tagging ensures that each item’s journey from warehouse to customer is accurately tracked.
Modern inventory management software must enable bar code reading feature to leverage power of barcode technology.
Traceability-
Traceability lets your organization track inventory from where it was bought to where it was delivered. This complete traceability saves you time, money, and effort in managing your inventory, as all the information is readily available at your fingertips.
These even speeds recall and minimizes its impact saving you bucks and customers, both.
Pick, pack & dispatch
Pick, pack and dispatch is the bones and flesh of warehouse life, so you need good levels of control and flexibility in this important feature of inventory management software. ?Your software must have:
Wrap up:
Above mentioned features are just tip of an iceberg. Although, as mentioned earlier also, the features requirement varies from case-to-case basis, yet these were some un-comprisable features an inventory management software must have.
Many a times, an inventory management software having all the features work in silos. This is because it lacks integration capabilities. To avoid this, it is better to invest in a complete ERP system and not only in an inventory management software.
One such complete system is BatchMaster ERP. With centralized repository to the data, it serves as a single hub for data sharing, allowing you to assess inventory and its movement in real time. It also reflects real-time impact of an activity (say delivery) on inventory level, allowing departments to take necessary actions. BatchMaster ERP has a robust inventory management module built in. To know more about BatchMaster ERP, visit BatchMaster.