All functions of a small or medium business are interconnected and tied to one another, and they frequently overlap. The foundation of the business delivery function is supply chain management, logistics, and inventory management. As a result, both marketing managers and finance controllers rely heavily on these operations.
Inventory levels are always changing. Inventory management is a key activity that affects the financial stability of the balance sheet as well as the supply chain's performance.
Inventory management demands a regular and comprehensive analysis of external and internal elements, as well as control via planning and review. Every business seeks to maintain optimal inventory levels in order to satisfy its needs and avoid overstocking or under stocking, which can have a negative influence on financial results.
In this blog post, learn about CommerceCore™ inventory management features and its benefits!
What is inventory?
Inventory, often known as ”'stock”, refers to the tangible items and materials that a company has with the intention of reselling them in the future.
There are four types of inventory:
Materials or components utilized in the manufacture of a product are known as raw materials.
WIP (work-in-progress) — materials and components utilized in the creation of a product.
Finished goods are items that are ready to be sold.
Returned products that can be resold are referred to as "goods for resale."
Inventory is one of the most important business assets because the turnover of inventory typically represents the primary source of revenue of any Shopify merchant.
What is inventory management?
Inventory management is a systematic approach to sourcing, storing, and selling inventory, both raw materials (components) and finished goods (products).
Inventory management, as part of the Shopify e-commerce supply chain, involves elements such as monitoring and overseeing purchases (from both suppliers and customers), stock storage, controlling the amount of merchandise for sale, and order fulfillment. The company's precise inventory management may vary depending on the sorts of items it sells and the channels through which it distributes them.
Inventory management in business terms implies having the appropriate stock at the right levels, in the right position, at the right cost, and at the right price.
Shopify's merchants often use excel, Google Sheets, or other manual tools to keep track of inventory databases and make ordering decisions. However, determining when to restock, how much to purchase, where to store goods, and so on may rapidly become a difficult task.
As a result, many Shopify merchants migrate to an inventory management solution (software or system) that goes beyond manual databases and calculations.
Inventory management processes in these systems go beyond simple reordering and stock monitoring. They include everything from end-to-end manufacturing and business management to lead time and demand forecasts to metrics, reporting, and even accounting.
The importance of inventory management
The importance of inventory management in any goods-based Shopify e-commerce cannot be emphasized, which is why inventory management improves operational efficiency and longevity.
Inventory management is important from a product standpoint because it allows Shopify merchants to understand what stock they have on hand, where it is in their warehouse(s), and how it is coming in or out.
Without a wise strategy, Shopify merchants would face an army of difficulties, including high unplanned expenses, loss of revenues, poor customer service, and even overall failure.
Clear visibility helps Shopify merchants to:
Provide better customer service
Prevent loss from theft, spoilage, and returns
In a broader context, inventory management also provides insights into the company's financial standing, customer behaviors and preferences, product and business opportunities, future trends, and more.
Inventory management challenges
People make mistakes, robots make mistakes, staff get sick, customers shock the system with an influx of orders...there are many barriers standing in-between inventory management and perfection. That’s true.
But it’s also true that a lot more could, and should, be done to improve the way inventory management works.
Here are 4 stats about the efficiency of inventory management which might surprise you:
43% of small businesses either don’t track inventory or use a manual method (Source: ConveyCo)
When it comes to goods-in, human error is the top issue in 46% of warehouses (Source: The 2017 e-Commerce Fulfilment Report)
Only 26% of company managers view warehouses and distribution centers as an asset which can drive growth for their business (Source: Motorola Solutions Future of Warehouse Survey)
34% of businesses ship late because products are sold which are not actually in stock (Source: Shiprocket)
Efficiency challenges of inventory
The main challenges of inventory management include having too much inventory and being unable to sell it, not having enough inventory to fulfill requests, and not knowing what goods you have in inventory and where they are stored.
Other challenges include:
Obtaining Precise Stock Information - Without accurate stock details, it is impossible to determine when to refill stock or which stock moves well.
Processes that are deficient - Outdated or manual processes might increase the probability of errors and slow down operations.
Changing Customer Demand - Customer tastes and requirements vary on a regular basis. Without a system that can track trends, the company can’t track their customer preferences.
Making Good Use of Warehouse Space - If similar items are difficult to find, employees lose time. This problem may be alleviated by mastering inventory management.
CommerceCore™ Inventory Management – Key Features
The CommerceCore™ inventory module has several features that set it apart from its competitors. Here are some of them:
Low processing time
In turn, the CommerceCore™ platform has the shortest processing time for conducting the processes. CommerceCore™ inventory with double entry based operation and processing speeds are among the best among other ERPs.
Inventory processes are simplified
The module takes a simpler approach to fundamental inventory activities such as shipping, delivery, product inbound and outbound, in-house product movement, and many other areas of inventory operations.
CommerceCore™ inventory allows users to select from a variety of removal techniques, including FIFO and LIFO, which may be specified in product removal activities on sales and production. The operation focuses on the CommerceCore™ platform's traceability processes.
The CommerceCore™ inventory allows its users to assign lot and serial numbers, which aids in the in-house traceability and out-of-house tracking parts of product sales activities.
The product movement in the CommerceCore™ inventory is based on the stated routes, which are followed without inquiry and are stuck with. These routes can be constructed, altered, and interpreted at various points throughout inventory processes.
Users may utilize the platform to develop complex routing options such as cross docking and drop shifting. Users will be able to strategize the numerous product movement aspects on the CommerceCore™ platform as a result of this.
Rule of routing
CommerceCore™ routing operations are carried out in accordance with the rules defined in the operation. Specifically, the push and pull laws that will characterize product movements during purchase and selling. These rule-based processes may be modified to meet the needs of the user.
Operation based on lead times
The platform enables users to specify lead times in numerous elements of the company's operations, such as. Delivery lead times, purchasing lead times, production lead times, and vendor lead times are all factors to consider. This will determine how long the things may be supplied and purchased. This would eventually lead to inventory forecasting based on available operational lead times.
The CommerceCore™ platform will enable users to refill stockpiles through automatic reordering rules of operation. The reordering parts of operation will be triggered by the minimal stock need specified in the product description.
CommerceCore™ allows you to describe and categorize inventory storage depending on the product types description. Consumable, storage, service, and digital products are the different types of products.
The products can be collided to be sold in kits. These kits and the products involved in them can be configured as per the user terminologies.
This is another terminology for CommerceCore™ inventory operations that allows users to categorize the products that are available. The goods can be divided into customizable variants and multi-level versions.
The CommerceCore™ inventory and warehouse management system enables customers to manage the operations of various corporate warehouses from a single point of control.
The CommerceCore™ platform, which has external device interface capabilities, will allow users to encode barcodes in inventory processes.
The benefits of using CommerceCore™ Inventory module
The CommerceCore™ Inventory module helps your business improve on multiple levels, from reducing costs to creating a positive customer experience.
It does this by:
Providing data trends and models to forecast the quantity of stock required
Providing data trends and models to forecast the quantity of stock required: This decreases the amount of money wasted on overstock substantially. Predicting the exact quantity of inventory necessary accurately implies fewer dead stock on the shelves in the future. It also assists you in predicting the amount of goods required to avoid stock-outs and lost sales.
Order and inventory synchronisation across all online markets and selling channels
By changing stock levels each time a consumer makes a transaction, synchronization eliminates overselling and stock-outs. The items that are listed across platforms then correctly mirror the real products that are available for purchase.
Goods stocking and tracking in numerous locations
The capacity to stock and track inventory in multiple locations saves expenses. This is because, rather than storing items in a single physical warehouse, you may store them worldwide. This saves transportation costs since your items are physically closer to their final destination, allowing you to avoid international shipping and customs fees. This also significantly decreases supplier lead times, reducing the amount of excess inventory you need to have on hand. This also reduces the overhead expenses of inventory storage.
the customer experience
Customers demand convenience at every step, especially when it comes to shipping and delivery transparency. A shopper survey found that 72 percent of shoppers abandoned a basket due to a lack of shipping and delivery information. Inventory management enables you to track items at every stage of their journey, ensuring that you can give accurate and fast tracking information to your customers.
The CommerceCore™ inventory module has features that will assist you in overcoming some of the most difficult challenges in inventory management.
With an intuitive UI, our platform is easy to use and navigate even for those with limited experience. You can track your inventory across multiple locations, automatically manage reorder points based on customer demand so you never run out or have excess stock sitting around, forecast demand and plan production and distribution without guesswork.
If this sounds appealing to you or if it has been on your checklist for awhile now, contact us or schedule a demo with our team so we can discuss how best to integrate these powerful features into your operations seamlessly. We look forward to hearing from you soon!
Merchant Operating System (MOPS) refers to a type of software used by Shopify merchants to handle day-to-day online-business operations including warehouse management, multichannel product management, invoicing, payment tracking, order processing, and much more.
The Merchant Operating System also includes corporate performance management software to help with planning, budgeting, forecasting, and reporting.
The MOPS is built on the widely popular open-source ERP Odoo Enterprise Framework. 26000 apps/plugins/modules/extensions are available from an Integrated App Store. We help our customers carefully pick and integrate apps based on their needs through our Professional Services.