Typical features of an inventory management system

Published on: June 06, 2019

IMS is defined earlier in this guide as a technology solution that automates the processes involved in inventory management. But what exactly are these processes, and how important is it that they are automated?

1. Real-time synchronization of accurate inventory levels.

Keeping your inventory accurate and consistent across different systems is important to avoid both overstocking and overselling.

The most efficient way to ensure this is by having any updates to your inventory synchronized across all systems in real time.

This means that when a purchase is made or when an item is delivered, the stock count is automatically updated in all channels where the item is being sold—something that is simply hard or impossible to achieve with manual data entry.

2. Providing a comprehensive overview on all products.

Beyond the basic information on what types of products are available and how many are currently in stock, an IMS offers additional insights on your products that enable you to make smarter business decisions.

An IMS tells you which products are selling out faster so you know where to focus your future purchases. Inventory data within the IMS can also predict demand for certain products according to purchase history.

Different data provide different actionable insights that let you optimize your inventory further.

3. Re-ordering.

Some IMS can be set up to automatically re-order specified products as soon as they run out or hit a minimum count.

This eliminates the hassle of keeping up with various schedules for different products, so more than making sure that you don’t oversell when you’re out of stock, you’re actually making sure that your bestsellers never get to that point.

4. Managing inventory on the go.

Many IMS are hosted in the cloud and can therefore be accessed anywhere and using practically any device. This makes it easier to be on top of your inventory and make sure that everything is at its optimal levels.

5. Additional functionalities for inventory-related processes.

IMS covers a lot more than keeping up with accurate stock count.

Typically, these systems also include functionalities for managing related processes from picking and packing to shipping the products, and even handling item returns when they happen.

In some cases, these processes may also be handled in a separate internal system or by a third party and integrated with the main inventory management system.

Inventory management vs. Warehouse management

A warehouse management system (WMS) is different from an IMS, but the two systems are often confused with each other because of how closely related their functionalities are.

In fact, most functions present in an IMS often overlap with the ones found in a WMS.

Both systems technically deal with inventory. An IMS keeps track of the number of stocks and the warehouse where it’s stored; a WMS keeps track of the warehouse, specifically the exact location within the warehouse where items are located.

An IMS tells the bigger picture. Because a WMS is specifically used for tracking the movement of inventory within a warehouse, it offers a limited oversight of inventory-related processes.

An IMS goes beyond the warehouse and offers general information about inventory.

A WMS controls warehouse operations. Its functionality is not specifically limited to managing the exact location of items; it also controls all activities within the warehouse, and is often integrated with warehouse equipment to further streamline the workflow.

Next: Implementing and integrating an inventory management system »