A business exists to satisfy a need with the solution taking the form of a product or a service. In the absence of these, reasons could either be philanthropy or fraud. Where there are products involved either directly or indirectly (as is the case with e-commerce companies), the organization has to invariably take concrete steps to shore up inventories be it or raw materials or final and finished goods, in the absence of which things can go wrong seriously.
Today we tell you the basic functions of an inventory management software, including its advantages and otherwise.
1. Keeping track of material position
At its basic, every materials management software keeps track of materials, its position, whether it’s at reorder level or otherwise, when it needs to be ordered again etc. In the case of e-commerce companies, material position is a far more complex activity as they themselves do not have stocks of any kinds but deal with those of others. Their types, complexity, sheer numbers etc can be huge leading to million of sq meters of storage area.
2. Segregating materials according to importance
For a single or two-product company with limited raw materials, this may not be a spot of bother – unless they get stocks in batches and those degrade with time. For companies dealing with a large number of goods including e-commerce companies, segregating products according to movement, unit cost, special needs etc can present a problem if not handled the right way with all information in place right at the beginning. One of the best and long-lasting of ways to circumvent this problem is to procure an inventory or materials management software which has extensive features and suits taking care of the smallest of needs.
3. keeping track of money flows, material-wise
Stocks, be it of raw materials, semi-finished goods or fully furnished goods represent money. If the turn around is smooth, money is always available to the producer to produce and earn more. This is called the multiplier effect. If on the other hand, stocks get stuck irrespective of reasons, the producers suffer for lack of working capital and can also be the primary reason for lack of growth overall. One good way of getting over this situation is to employ an efficient materials and logistics management software that qualitatively tracks the goods from the stage of raw materials entry to final product exit, as also points out those sections where things go slow. By doing so, the software practically pin-points the exact location of problems which if solved can give the organization high growth and productivity.
4. If there are external places of storage, the systems additionally keeps track of stocks at all centres + those on the move
A growing organization may find it difficult to stock all its materials at one location. This is a natural occurrence, and a sign of growth. What could be a thorn on the side if the lack of information on stocks at each such place. By brining the entire thing under one umbrella using a logistics and materials management Software, can be the best way of keeping track of stocks across location. It would, in effect negates the very fact of things being stored at external locations, and practically brings them under one roof.
5. Keeping track of material-related logistics
A material management software is nothing if it cannot keep track of materials, be it raw materials, work-in-progress or finished goods. For this reason, almost all the better and renowned material management software invariably devote an entire section to logistics in some serious depth which take care of not only movement through various means but also warehousing and distribution. Be it LIFO, FIFO, Most important to least important and other variations, a material-management software takes care of all these variations.