It is a software system for tracking stock levels, orders placed, sales made as well as deliveries. The system is mostly used in warehouses to control and manage stocks. It can also be used in manufacturing whereby there is the creation of the bill of materials (BOM) and a work order in the production firm. It is used widely to avoid shortages, stock-outs, overstocking or avoiding slow-moving items that are associated with higher carrying or holding costs. Items or materials of inventory move from one department to another until they reach the ultimate customer or a retail outlet.
There are various purposes for inventory management software in an inventory department. Helps inventory managers and storekeepers in many areas. First, it is used in maintaining a balance between excess and too little inventory. This is called optimization, whereby adequate stocks are kept to avoid stock-outs or holding of excessive inventory in the warehouse. Optimal quantities are kept to provide maximum service levels. To add on that the system is also applied in tracking inventory as it moves from point to point. Along the way the quantities transported, what has been used in order to make receipts or compile data related to such. Inventory is monitored step by step rather the use of paper and a lot of documentation. Find the best free inventory control software or check out inFlow for more details.
The system is also efficient in receiving of items into a warehouse or other location. When materials are purchaser when they enter the warehouse there is stock taking and counting of items received.Also when items of inventory are picked and shipped from the warehouse the system records all that. The information can be used by the various departments in consulting to make improvements and other adjustments. Essentially the system is used in keeping track of product sales and inventory levels. Inventory levels can be minimum, average and maximum.
The system here works in a way that it detects when stocks are low and sends signals to the manager to initiate the purchase of new inventories. Expeditions are made eventually. When the stocks are average it means that there are optimal quantities and no need for any other stocks. The maximum stock level is the stock level where we have optimal quantities as well as safety or buffer stock is available. The system, therefore, alerts the managers of any changes in the levels. The other purposes include cutting down on product obsolescence that is it determines whether the product is close to spoilage and it is removed from stock. Another one is avoiding missing out on sales due to out of stock situations. Stock-outs affect working capital thus disrupting many functions. Continue reading more on this here: https://www.huffingtonpost.com/entry/effectively-managing-inventory-across-multiple-channels_us_58ee948fe4b04cae050dc447.
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