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Inventory Management for Retailers - Improve Efficiency and Profitability

From helping businesses track stock levels to collecting and analyzing customer data, ERP Inventory Management and Fulfillment Systems are a valuable platform for retailers.

How to Optimize Inventory and Fulfillment with ERP

How ERP Inventory Management Software Makes a Difference for Retailers

As a retailer, you’ve likely experienced common inventory management challenges, including unreliable tracking, supply chain issues, complicated packaging, and constantly evolving customer demands. As a result, you’ve also likely searched “how to manage inventory in retail store” and discovered there are a number of suggested best practices, such as implementing retail inventory management software within a comprehensive enterprise resource planning (ERP) solution.

Retail store inventory management software is a powerful tool that can help you manage your inventory as well as improve your efficiency and profitability. The software helps businesses like yours easily track inventory levels, as well as orders, sales, and deliveries from a centralized solution. It can also be used to create a work order, bill of materials, and other production-related documents.

With ERP inventory management software, you’re able to optimize your inventory and fulfillment processes by automating tasks, improving accuracy, and providing insights into inventory trends, which are all things that make customers happy. But keeping customers happy requires knowing which products customers need and want, and what prices they are willing to pay while also making sure that the desired products are easy to purchase and always available.

This always-available inventory is possible with modern ERP inventory management software, and it can also help you do the following:

Accurately forecast inventory needs: ERP inventory management software can use historical data, demand signals, and other factors to predict future demand. This can help retailers avoid stockouts and overstocks, which can save money and improve customer satisfaction. For example, a modern ERP system can use historical sales data to forecast demand for the next month.
Reduce shortages and excess inventory: ERP inventory management systems can automate the ordering process and provide real-time inventory visibility. This can help you ensure that you have the right amount of inventory on hand to meet demand, without having too much inventory that they need to sell at a loss. For example, a modern ERP system can automatically generate purchase orders when inventory levels reach a certain threshold. It can also track inventory levels in real time, so you can see how much inventory you have on hand and where it is located.
Increase visibility across the retail pipeline: A modern ERP inventory management system can provide a single view of all of your inventory data. This can help you track inventory from the point of order to the point of sale, so you can see where any bottlenecks or inefficiencies are occurring. For example, a modern ERP system can track inventory levels in your warehouse, your retail stores, and your distribution centers. It can also track inventory in transit, so you can see when shipments are expected to arrive.

By accurately forecasting inventory needs, reducing shortages and excess inventory, and increasing visibility across the retail pipeline, a modern ERP inventory management software can help you improve your retail business’s efficiency and profitability, which leads to happy customers and a healthy bottom line.

The Right ERP Solutions for Better Inventory Management

Clearly, inventory management is essential to your business. A stable and healthy inventory is key to forging strong customer bonds and guaranteeing profitability. The right ERP solution can help you achieve the perfect balance by providing you with real-time visibility into your inventory levels, demand forecasting, and order management.

With the proper ERP (Enterprise Resource Planning) solution, determining the optimal level of inventory is no longer a guessing game but a well-defined and data-driven process based on updated information. As a result, stockouts—which often forces customers to go elsewhere with their business—and overstock situations—which incurs waste and additional warehousing fees—are a thing of the past.

Additionally, the adequate ERP inventory management software for retail stores should include an integrated point of sale (POS) system that provides a simple way to manage all sales transactions. Because it’s connected to the ERP solution, POS offers accurate inventory that is updated after each transaction, whether it’s a sale, a return, or an exchange. And order fulfillment can be as easy as the click of a button and can help inform your buying, manufacturing, and shipping decisions.

Once you’ve found and implemented the retail store inventory management system, measuring how well it’s performing is key to your success, and measuring performance starts with tracking key performance indicators (KPIs). According to SelectHub, the top ten inventory management KPIs are:

Demand Forecast Accuracy
Customer Satisfaction Levels
Perfect Order Performance
Fill Rate Effectiveness
Gross Contribution Margins
Order Cycle Time
Order Pick, Pack and Ship
Inventory Turnover
Carrying Costs
Supplier Quality Index.

Overall, you’ll discover that investing in retail inventory management systems provides a strong return on investment (ROI) by improving your inventory accuracy, reducing costs, and boosting sales.

"Prior to Acumatica, our IT developer kept saying we should wait until the next upgrade and things would get better...but it was always a downgrade with NetSuite."

Dave Munson, Founder and CEO

Saddleback Leather

Additional Inventory Management System Benefits

As discussed, inventory management systems offer many benefits to businesses of all sizes. Here are three of the most important:

Greater visibility and control.
Automated workflows.
Better customer experiences.

Benefits of an ERP Inventory and Fulfillment System

Greater Visibility and Control

An inventory management software for retail gives you real-time visibility into your inventory levels—something disconnected systems and error-prone spreadsheets cannot provide. The software records inventory data either automatically or through user input, giving you the flexibility to choose what methods work best for you. Access to this ERP inventory management software for retail gives your team members full control over inventory, and they can make data-driven decisions based on updated, accurate information about stock levels and inventory locations (including items in transit).

Automated Workflows

Inventory accuracy is essential for retail businesses, so relying on manual processes and workflows inhibits your ability to accurately maintain inventory—largely due to human error. This inaccuracy results in major disruptions to productivity and affects your customers’ experiences. Automated workflows through the right ERP inventory system eliminate spreadsheets (decreasing human error), improve productivity, and reduce costs. With automated ordering and fulfillment replenishment, you and your business can reduce inventory shortages and overages.

Better Customer Experiences

Having stable inventory levels and an inventory that aligns with customer demand means you can give buyers what they want, when they want it, without fail. This creates a strong customer experience, and a strong customer experience yields customer loyalty—stimulating continued growth and soaring profitability.

Here are some additional benefits of inventory management systems:

Reduced costs:Inventory management systems can help you to reduce costs by improving accuracy, efficiency, and visibility.
Increased profitability:Automated Inventory management systems can help you to increase profitability by improving customer satisfaction, sales, and inventory turnover.
Enhanced decision-making:Inventory management systems can help you to make better decisions about inventory by providing you with real-time data and insights.

By investing in an ERP system, you can improve your accuracy, efficiency, costs, visibility, and decision-making, which can lead to improved customer satisfaction, profitability, and growth.

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Inventory Management Software in Action

“Now, I sleep, dream, and hope….Our culture and atmosphere are so much more positive, and people are in a good mood. Everything is coming together, and our company is growing at a fast rate. It’s fantastic.” Dave Munson, Founder and CEO, Saddleback Leather

“We are in an extremely fast-paced industry with 50 different beers from different breweries from all around the world [arriving] weekly. Before, it was just a nightmare trying to keep up with it all. By upgrading to Acumatica, it was so much easier and streamlined, and we have all the information we need in hand to empower sales. Acumatica makes it a hell of a lot easier to sell in a product, knowing that we’ve got full control of where it comes from and where it goes.” Louise Smale, Co-Owner, Cave Direct

“With Acumatica, we can track inventory in real time knowing where each item is. Whether it’s in the production flow, whether it’s in raw material stores, or whether it’s in transit. Having real-time inventory tracking and understanding where it is located in the factories is very important to us.” Devin Samayamanthri, Chief of Staff, Design Studio

“Being able to access data and have the various departments working together in one system [Acumatica] is a real benefit. If the warehouse has low inventory for an item, it is immediately exposed to purchasing to place the order for more. We now have real-time visibility to pertinent data.” Ben Rothe, General Manager & CEO, Premier 1 Supplies

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FAQs

What is retail inventory management software and how does it differ from general inventory management software?

Inventory management software is software that simplifies and automates the processes for managing your inventory. Having an accurate inventory helps you meet customer demand while also reducing extra costs associated with over-and-under-stocking as well as with customer returns and exchanges. For retailers, choosing inventory management retail industry specific versus general inventory management software ensures that you have the exact features and functionality your retail business requires.

What features should I look for in retail inventory management?

The features you need are unique to your business, but you’ll want to find retail inventory management software that includes the following vital features:

Location Management
Matrix Items
Physical Inventory
Pricing, Discounts, Promotions
Customer and Vendor Items
Packaging and UOM
Shipments
Inventory Valuation
Kitting and Disassembly
Perishable Inventory and Lot/Serial Traceability
Non-Stock Items
Dead Stock Detection
Stock Conversions
Turnover Inquiry
Role-Based Dashboards
Side Panels
Barcodes and Labels
Warehouse Transfers
Optional Quality Management

How can retail inventory management software benefit my business?

In addition to simplifying and automating the entire inventory management process, retail inventory management software delivers greater visibility and control, reduced costs, increased profitability, enhanced decision making, and better customer experiences for a powerful ROI.

What level of customization is available with the software to meet specific business needs?

Customization and personalization capabilities are dependent on the retail management software you choose to implement. Because your business is unique, you’ll want to find a solution that’s built on cloud and mobile technology that includes low-code, no-code functionality for easy, cost-effective customization that doesn’t require expensive—and often time-consuming—assistance from external developers and experts.

What security measures are in place to protect sensitive inventory data?

ERP solution vendors understand that ensuring inventory data security is of the utmost importance. Solutions that are cloud-based are hosted in secure cloud servers that store and encrypt data that are continually monitored by the providers. Other security measures that should be in place by your ERP solution provider include two-factor authentication, environmental protections (e.g., fire detection and suppression, power backups, and climate and temperature systems), and controlled physical access. To ensure that your information is safe from both internal and external threats, carefully research your ERP inventory management software options before making an investment.

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