How Does an Automated Inventory Management System Work?


What is Automated Inventory Control?

An automated inventory system is designed to streamline the inventory control process for businesses, much like an ERP system. This system can take over tedious inventory management tasks, reducing the risk of errors and increasing efficiency. For more information about our ERP systems, please click here.

Inventory automation, which was once mainly used by large enterprises with big budgets and complex multi-layered inventory, has become a necessary tool for even small and medium-sized businesses. This is because wholesalers, distributors, and e-commerce stores now utilize these systems to streamline inventory management operations.

Benefits of Automated Inventory Management:

1. Save tons of time

Imagine not having to spend time manually updating inventory data on Excel spreadsheets. Automation will enable precise, automatic updates on all your channels. Whenever an item is sold, returned, or received, the automation engine will update the system – no manual effort required – leaving you with more time to devote to the important stuff.

2. Gain real-time visibility 

This system enables you to monitor your inventory levels in real-time. You can easily keep track of the amount of inventory you have in your warehouse(s), the stock that needs to be selected for current orders, and the stock on orders from vendors. With this system, you won’t have to worry about stock-outs or unfulfilled orders again, as you will be able to monitor your inventory accurately.

3. Stop miscalculating stock levels

Miscalculations of stock can be very damaging to any store’s operations. Fortunately, an automated inventory management system can be beneficial in avoiding such errors. Through inventory analytics, retailers can look at their customer’s data to determine the right amount of inventory to keep in stock and when to replenish it.

4. Enjoy increased accuracy 

Human error can be the downfall of manual entry. To avoid this, automate your inventory management processes. This way, the software will do the data entry for you, making adjustments to stock such as adding, deleting, forecasting, and replenishing in real-time.

5. Scale up with ease

In conclusion, automation provides excellent potential for scalability and growth. Automated inventory management software is particularly beneficial as it saves time, is more accurate, and can process thousands of transactions daily without any chance of mistakes.

How Does an Automated Inventory Management System Work?

Modern retailers, both e-commerce and physical, rely on automated inventory management to keep track of their stock, supplies, and sales. This computerized system allows them to monitor and organize their inventory in real-time, allowing them to make quick decisions based on the current state of the business.

To ensure real-time accuracy, inventory automation should be used with retail management tools, such as order management or point-of-sale (POS) software. For example, when a product reaches the predetermined reorder point, and its stock is running low, the inventory management software can alert or reorder it for you. This ensures that all sales through all channels are tracked and considered when managing your inventory.

What are the features of automated inventory management?

The functionalities of an automated inventory management system vary depending on the type and plan of the software selected. However, some of the standard features that you should see in all modern automated inventory control systems include the following;

Stock reordering 

A robust inventory management system can prove invaluable to inventory control managers by allowing them to set a minimum threshold for inventory stocks. Once this threshold is reached, the system will automatically place a purchase order for the specific item (in the predetermined restock amount) with the vendor.

Barcode scanning 

The barcode scanning feature simplifies inventory management for store managers by eliminating the need to manually enter data for each item. This software can quickly capture all relevant data, such as the SKU, for each item by scanning the barcode, reducing the time required for the inventory count.

Real-time data monitoring and forecasting 

Inventory forecasting and reporting is a crucial feature that provides businesses with immediate information about their inventory. The reporting tools provide detailed information about which items are selling, which ones are not, and other relevant performance metrics. Without the automated system, manually analyzing Excel spreadsheets would take hours to discern patterns.

C-suite managers can utilize this data to gain insights into business performance, forecast future performance, and make necessary adjustments to optimize sales.

Run multichannel inventory tasks.

Businesses like POS or e-commerce stores can now utilize modern inventory management systems to connect with multiple sales channels. This allows them to make sales effortlessly on different media without worrying about manual updates and other inventory management duties.

Manage inventory control at multiple locations. 

An automated inventory management system is ideal for growing businesses with warehouses in multiple states or even countries. It supports multichannel inventory and enables inventory tracking across multiple locations. The software continuously tracks and updates inventory stock levels, thus providing real-time merchandise updates at all times. This helps businesses stay on top of their inventory and ensure they have enough stock to meet customer demand.

Order fulfillment automation 

Many automated inventory management systems offer an advanced order fulfillment system different from a standard feature. This system helps businesses with tasks such as printing shipping labels, assigning tasks, tracking orders, and other activities related to order fulfillment.


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