Inventory management in the supply chain has come a long way since the time when the software used to maintain inventory levels would rely on time-consuming manual processes. Now, with automation, advanced inventory controls, and real-time functionalities, keeping track of inventory has become an easy task. Let’s look at the key market trends in inventory management software:
Key Market Trends
- Advanced Inventory Controls
New tools that are being developed and introduced by software vendors allow buyers to be proactive about maintaining inventory levels. These software vendors use advanced slotting analysis to help buyers identify historical inventory information (including product information); usage trends; inventory shelving layout information (classifying inventory by SKUs, class or type); and ensure that reorders take place on time (provide automatic alerts when the inventory reaches threshold limits). Enterprises nowadays, with the use of advanced software, are gathering more specific insights about their inventory and operations, and they are using them to form more impactful decisions about how their businesses operate.
- “Real Time” Becoming More Important
Older, traditional methods of tracking inventory generally relied on humans to catch up on inventory and take counts at the end of the day or week. However, the increasing presence of scanning technology and more advanced systems have made it possible to keep track of inventory in real time. That means any time a product moves, the system gets updated. This, in turn, leads to faster and more accurate insights, and leaves less space for potential errors.
- More Diversified Solutions
Despite the presence of advanced controls, real-time and automated functionalities, buyers are demanding solutions that can provide more information. Improving and optimizing inventory is one such area that has affected inventory management software providers, as optimizing inventory leads to reduction in costs and improves stock availability. In order to constantly evolve, providers are pulling out all stops to offer flexible, customizable solutions that can fit almost any business need, and draw in more data points from areas of business to make more comprehensive and in-depth software packages.
Features Buyers Now Look for in the Software
Cloud inventory management software buyers now look for suppliers that can provide a solution which is capable of performing product categorization, improving and optimizing inventory, and automating tasks.
- Product Categorization and Dynamic Product Information
Many businesses need to track inventory for dozens of products, and they need an easy way to segregate products. They also need to capture and maintain complete inventory records to keep a check on product history (expiry dates), usage trends and layout information.
Buyers of inventory management tools are looking for a solution that enables them to distinguish products by SKUs, class or types, and helps them accurately and efficiently track their inventory.
- Improving and Optimizing Inventory
This is quite expectedly a key requirement for businesses, as optimizing inventory decreases inventory costs and improves availability of stock. Essentially, inventory optimization forms a component of inventory management software which helps in demand forecasting and management of inventory. Buyers now look for software that can help to analyze the reorder point (the number of units that should trigger a replenishment order), order quantity (the number of units that should be reordered, based on the reorder point, stock on hand, and stock on order), and stock cover (the number of days left before a stock-out if no reorder is made).
The most important way to improve a business is through task automation. Automation helps businesses speed up processes and reflects actual operations taking place inside their warehouse. Buyers are increasingly seeking software that can automate and bring all processes under a single platform — from creating unlimited tabs for product information, to real-time inventory tracking & cycle counts, and providing alerts when an inventory reaches the threshold limit.
The Road Ahead for Inventory Management Software Suppliers
The inventory management software supplier landscape will witness extensive transition over the next couple of years, with large software providers consolidating/acquiring niche/specialized software providers to meet current demands of buyers of stand-alone solutions. Further, the proliferation of small-scale suppliers (specialized software providers) — facilitated by low barriers to entry into the market — will intensify competition and lead to price declines.
Earlier, capabilities of inventory management systems were restricted to inventory tracking and real-time updates, but now software developers have extensively demonstrated capabilities that span across functionalities of the larger warehouse management system suite.