Not having enough stock results in stock-outs. Orders come in, you don’t have the items the customer wants, and then a scramble ensues to expedite higher-priced replenishment––or, possibly even worse, you lose the sale to a competitor who has the desired stock available. Stock-outs carry opportunity costs: the opportunity to sell at the best price, and the opportunity to sell at all.

On the other hand, holding excess stock carries costs because the inventory you stock has to be warehoused, insured, secured against shrinkage, depreciated, and taxed as an asset. Excess items generally cost the business an additional 25% to 50% per year. Excess stock carries opportunity costs as well: the working capital tied up in unsold inventory is unavailable for other purposes.

Why is inventory management important for a business?

Why is inventory management important for a business?

Many companies rely on an inventory management system to manage their supply chain. So, what are the benefits of this type of system?

You'll delight your customers

Today's digital-savvy customers can instantly compare retailers’ prices online, wherever they are. These comparisons automatically increase pressure on prices, so retailers, distributors, and manufacturers often attempt to stand out based on the quality of service they provide.  You can fulfill customer orders quickly and accurately if you have instant insight into stock levels, customer details, shipping information, and more.

Your business will get paid faster

Fulfilling orders faster means you can get paid faster, but keeping on top of invoicing and records of purchase orders can be a time-intensive process, often causing delays and impacting on your cash flow. Automate the process using powerful inventory management systems with accurate live data to make collecting payments a breeze.

You'll maximize profit margins

Making sure you have the right stock, in the right amount, at the right time is one of the biggest inventory management challenges you'll face. Running out, or ending up with excess stock, can prove hugely costly. With the right solution, you can analyze live sales and inventory data instantly to produce quality forecasts in no time at all. This way of working will help you hit your target fill rates, minimize stock-outs, and get the maximum value from your inventory.

You'll manage a more efficient business that grows faster (it's easier than you think)

Better insight into––and management of––your inventory can deliver benefits right across your business. With more accurate forecasting and the automation of many routine tasks, you'll free up time and working capital to invest where it's needed most. And with instant access to live data whenever and wherever you need it, you'll be able to make better decisions across your supply chain.