How to Choose the Best Inventory Management Software Application
Inventory management software is one of the most sophisticated tools that you can use for controlling the flow of consumer products at the distribution, warehousing, and sales levels of any retail operation. Inventory management also enables businesses to perform the more complex but useful calculations that are critical to business predictions of sales and profitability.
Additionally, this software helps you to control losses, prevent out-of-stocks, and take advantage of supplier or vendor discounts.
Companies that carry a great deal of inventory at both the retail or warehouse levels need inventory control systems that are designed to meet their specifications including being integrated with their accounting and sales departments.
Larger, propriety systems are needed for these companies whereas the smaller business carrying less inventory can purchase an off-the-shelf version of inventory management software. Where budget is an issue this is a more cost-effective type of software application for these smaller companies.
For purchasing customized, high proprietary inventory management software systems:
o Determine the inventory needs of your company – make sure to discuss this with everyone that is involved in controlling and managing your inventory including the company’s financial managers.
o Create a list of features that you need the software to have – determine how essential each feature is in order to include it or not.
o Evaluate your computer system’s ability to handle the software – will it be capable of handling the inventory management software package that you are considering.
o Create your RFP (request for proposal) – this is a formal document that spells out the criteria and specifications of the inventory management software that you want to purchase.
o Make a list of vendors to research – develop a checklist for evaluation purposes so that you can narrow down your search and make a more informed decision.
o Send your RFP to the vendors on your list – you can use your e-mail system, standard mail, or send a company representative visit the different vendors.
o Evaluate the RFP’s – narrow down your choices to two or three candidates and base your final decision on how well these meet the inventory control needs of your company and how cost-effective they are. Be sure to test each one and then make your final decision.
Before purchasing standard, off-the-shelf inventory management software:
o Determine your company’s inventory needs – list what you need in the way of function and the types of reports you need it to generate.
o Ask for recommendations – talk to company associates about what they feel the software should do and any vendors they are considering.
o Visit trade shows – research the management software vendors and their products. Make a list of your considerations.
o Evaluate half a dozen programs – determine whether or not they fit the inventory control needs of your company and then rate them.
o Purchase the software that best fits your company’s inventory control needs – make sure that all involved parties are a part of the decision making process, so that everyone is confident about the software package.