Why Businesses Need a Cloud-Based Inventory Management System?

From the time, people have been buying and selling their goods and items, and now it's been centuries they have been trading.

The current state of inventory management is great, and the procedure has become as easy as it can be.

This naturally means that inventory management has always existed in some form but not cloud-based.

Looking in the past, just a few centuries back there was no existence of computers, no barcode readers, but people somehow tried and simplified their trading process, by adopting new technologies in the way.

The industrial revolution was the period when history turned its way, it was the most impactful time in history that increased efficiency and mass production.

The business grew and so their need for inventory management.

How spreadsheets can destruct inventory management?

The technique through which you manage and execute inventory control in your SME will make the difference in your profit and loss.

You will fail to cope up with customer's demand, in the condition of insufficient stock levels leading to the risk of your business by losing sales and potential customers.

It is comparatively easy to track your inventory using spreadsheets, as almost all of the people know its basic function and use.

The spreadsheet software gives you many integrated tools and features with the ability to sort products with its type, size, color, or purchase date. The feature of formulas in the spreadsheet allows automatic calculation in terms of total figures and taxation percentages.

Recommend To Read: Best Inventory Tools That Help in Inventory Control

Spreadsheets are largely a manual process, as tracking of large quantities of inventories increases the chance of data entry errors. The team members require more time to update the sheet and validate stock quantities in the workbook.

Limitations of Spreadsheets:

• Cost-effective way for new small and medium-sized enterprises (SME)
• Become more challenging with the passing time
• Don't have the capacity to grow with your business
• Become ineffective and inefficient as your business grows
• Largely a manual process
• No automatic update of sale or purchase
• Does not reflect real-time data
• User access limited to one person
• If multiple users, chances of error increases
• No automatic alert for re-order

How cloud-based software helps Small and Medium-sized Enterprises (SME)?

The cloud has shaped the business world in a new way, on a daily basis for both a small and large business.

The cloud provides the facility of centralized storage of data on the internet. So, that it can be accessed from anywhere, on any device that has a web connection.

The cloud is shaping the new scope of doing business. It allows the business to operate efficiently in an elaborative way than before.

Incorporating cloud-based software in your small business will bring a substantial advantage to you.

1. Increased Accessibility:

The in-depth inventory information makes educated decisions to encourage the business to make most of the extra targets by minimizing risks so that wastage of valuable finances can be reduced.

To have a cloud-based business model allows you the accessibility to work information, both in and outside of the office. For example, if a member of the team is traveling and needs to get some stock information for a customer, he/she can still access everything on the cloud with the internet.

2. Decreased Costs:

The implementation of cloud-based inventory tracking software will definitely require an investment, but your business will soon start to get a return on investment.

Unlike, traditional bulky hardware and heavy software installation are not required for cloud access, in fact, it operates off the internet, it is self-managed.

The cloud-based inventory management software is installed and run remotely, here you need not to actually install anything on local machines.

It is accessible on any device with an internet connection moreover, multiple users can access the system and database without conflicts and errors.

3. Controllable:

The cloud-based software offers you the support to help you customize your software as it is extensible, and you can use it to run a related software locally with the interaction of assets and inventory database.

4. Automation:

Automation reduces the time-consuming process of search through large data. It removes human error from the cloud-based software and boosts its accuracy.

The cloud includes software upgrades as the cost of their service. As continuous updates happen, without a hitch you can focus on work without worrying about the updates of software and database on every computer.

5. Real-time Updates:

The cloud-based inventory management provides data in real-time to small businesses or SMEs in any location.

The cloud provides the facility of centralized storage of data on the internet. So, that it can be accessed from anywhere, on any device that has a web connection.

Information can be shared seamlessly and will always be up to date.

How is Inventory Management different from Inventory Control?

- Inventory Control involves knowing what, where and how much inventory is on-hand in a store, stockroom or warehouse.

- Inventory control is a part of the broader discipline of inventory management. Just like a slice of cake.

- Inventory control is about knowing where your inventory is and making sure it travels to the right place for efficient and timely manufacture of finished goods.- Inventory management includes inventory control and moreover involves all activities surrounding effective sourcing, forecasting and replenishment in every stocking bin, location or warehouse.

- Inventory management is concerned with all the stuff, but also how fits it into the bigger picture.

- Inventory management includes costs like purchasing raw materials, carrying costs of inventory, and inventory processing overheads.

What are the challenges that a small business face?

Whenever it is talked about  “manufacturers”, the image which appears in most of the minds is machines, endless production lines, and a huge staff rushing around.

Manufacturing requires a lot of expensive machines, but alongside small-scale business do exist and considered.

Small scale business includes manufacturers, artisans, bakeries, school stationeries, etc. It is moving from the preference for cheap, mass-produced goods, to more unique and lasting items.

The new form of manufacturing has appeared and is demanding a god inventory management technique especially that works for them to get a hold on the availability of raw material.

For inventory management small scale business uses pen and paper system, written stock takes, and order invoices.

With these old methods, limitations reach their limit very quickly here in small businesses.

Many spreadsheets come with functions specially designed for inventory management, so you don't have to worry much.

Trying to keep the data records of product recipes, ongoing costs and the stock itself up to date is a nightmare with spreadsheets alone.

Challenges for Small Scale Business:

• Proper updating of inventory master sheet by staff
• Error in accounting due to employees
• Keeping data up to date without interference daily operations
• Estimating manufacturing time to meet customer demand
• Search for the best cloud-based inventory management system

What features to look for in good inventory management system?

Here are some of the features you must look out for in good-quality cloud-based inventory management software:

• Store your entire data in one place
• size, color, embellishments, etc. Must be variants for each product
• Enter product information and manufacturing processes to track your product flow more effectively
• View orders received in real-time, to work straight away
• Allocate materials to the orders according to the list, to it get it out of the door first, minimize work-in-process, and fight over-ordering
• Track orders from suppliers to know when the stock is expected
• Manage the team by assigning duties and daily goals
• Accessible to everyone and anywhere while still being secure

Conclusion:

A good cloud-based inventory management software should have all the features mentioned above and should target your specific requirements so that you can get the most out of your inventory.

As a small business should find these solutions in an cloud-based inventory management system:

• Coordinate all your raw materials and finished products
• Free you from the burden of spreadsheet
• Help you out with your order fulfillment cycle
• Should be simple to navigate and easy to understand

Also Read: Ultimate Guide to Inventory Management for the Retail Business

Frequently Asked Questions (FAQs)

1. Aren't spreadsheets a good way to manage inventory?‍

Spreadsheets are not as effective inventory management tools as a cloud because they must be updated manually, which consumes time making the data outdated. Moreover, spreadsheets can't scale with your business or communicate with your point of sale.

2. What is an inventory system, explain with an example?‍

An Inventory can be any quantity of goods owned and stored by a business that is intended either for resale or as raw material and component used in the production of goods that the business sells. For example, motherboards warehoused at a computer company to be used in the assembling of its computer systems are inventory.