Inventory management is one of the most critical processes for businesses operating in the retail industry. Efficient inventory Management helps retailers to fulfill orders and reduce wastage.
A full-fledged ERP retail management software usually comes with an inventory management module. However, some retailers might find it to be too generic. Business owners can purchase a dedicated Inventory Management System separately, but those don't always offer the standard ERP features.
The good news? There is a third option: an ERP-based inventory management system or Inventory Management ERP.
What is an ERP inventory management module?
ERP inventory management module allows retailers to engage in demand planning and forecasting, manage inventory in real-time, and access advanced tracking and visibility tools. It helps retailers automate the process of reading barcode labels and RFID tags while maintaining tight control over cash flow and quality.
Most importantly, it syncs with data from other ERP modules, such as sales and eCommerce. It ensures no understocking or overstocking, timely order fulfillment, and high customer satisfaction metrics.
Many systems are available that offer inventory management solutions
The main three are:
1. Traditional ERP systems
A traditional ERP is a complex software system that helps automate multiple organizational processes. Some of the most common features of an ERP system include Business intelligence, Project management, Human resource management, Asset management, Sales and marketing, Customer relations management, and Inventory management.
Traditional ERP systems usually include an inventory management module. However, it is generic and is more suitable for companies that operate limited inventories.
2. Standard Inventory Management System
Standalone inventory management systems that focus on managing inventory and stock may not offer other ERP features. This means that to gain a comprehensive, real-time business overview and automate business processes, you will need to integrate it with other ERP modules or 3rd party systems.
3. Inventory Management ERP
There are ERP tools that provide solutions designed specifically for businesses that operate inventories at their core. Such ERP systems offer specific features that cater to the unique requirements of organizations that manage stock, fulfill orders, and automate supply chain processes to handle extensive demand volumes.
Why every retail business needs an inventory management software
The retail industry is at crossroads. Many retailers admit that existing technological solutions, such as standard ERP systems, have yet to help them. They confess they need additional tools to converge disparate retail operations like multichannel order fulfillment, social media marketing, multiple point-of-sales (PoS) devices and software, and advanced warehouse and inventory management.
To put things in context, Shopify's 2022 Data-Backed Retail Statistics reveal that 50% of brands plan to unify their online and in-store operations, and 43% plan to use mobile apps to display available items in nearby stores. This correlates with the 53% of shoppers looking at products in-store and ordering online and 47% that browse for products online and pick them up at the store.
A multichannel shopping experience and timely order fulfillment are essential for retailers to survive. An Inventory or warehouse Management focused ERP systems bring the best of both worlds. While helping retailers better manage their warehouses, process orders quickly, and manage their inventory more efficiently, they are usually less expensive than a full-fledged ERP system.
They also facilitate essential ERP features such as CRM, accounting and finance, etc. Consequently, retailers should consider investing in an ERP specifically designed for inventory management. Priority Retail is a powerful ERP system for retailers that features some of the most advanced inventory management capabilities.
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Standard Inventory Management Software |
Inventory/warehouse management ERP |
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A dedicated software that allows you to create pick lists, gain insight into valuable reports, and ensure up-to-date stock. |
In addition to standard inventory management software capabilities, inventory ERP systems provide various retail-oriented features such as payment processing, warehouse management, multichannel shopping, order fulfillment, etc. |
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A standalone inventory management system ensures that products are picked up quickly from the warehouse and delivered to the shipping logistics in time. |
Facilitates all the features of a traditional ERP system with a specific focus on managing your inventory and stock. As a result, this tool is significant for manufacturers, retailers, and suppliers. |
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Helps streamline forecast demand and restocking calculations to facilitate replenishment well in advance. It helps avoid overstocking and understocking. Overstocking results in the expiration of products and wastage. Understocking results in failed order fulfilments, delayed shipping, and reduced customer satisfaction scores. |
Share the same features as the Standard Inventory Management Software, in addition to integrating the data with online and in-store orders, to bring a multichannel shopping experience to your customers. |
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Does not support additional business management functionality other than inventory management. |
Automates your supply chain management, delivery methods, inventory management, manufacturing, sourcing, finance and accounting, and shipping. It even helps manage your staff with HRM features. As most inventory management ERP systems are mobile-enabled, your team can manage stock and fulfill orders regardless of where they are. |
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If your business only deals with receiving and pick-up, or if you are just a warehouse-centered organization, then you may use a simple inventory management system |
If your organization is retail-oriented, and inventory management is one of the many critical processes, then you need an inventory management ERP system. |
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You can integrate your inventory management system with a third-party software or an ERP if you require additional features. |
There is no need for integration. Tools like Priority Retail help you manage your retail business and bring a multi-channel shopping experience to your customers effortlessly. |
A standard inventory management system and a traditional ERP management system lie at the two ends of the spectrum. The former has very few ERP features but functions quite well as a supply chain management tool. A traditional ERP, on the other hand, is a full-fledged business management software that helps automate and manage multiple business processes. However, it contains modules that you may never use.
The solution is somewhere in the middle. An ERP for inventory management, such as Priority ERP combines the best of both worlds. It is often delivered as a cloud-based service, and you can add and remove features depending on your requirements. You can subscribe to additional features when you want and turn off those that you don't need.
Contact us today to learn more about Priority Retail and our other inventory management solutions.
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