While searching for a topic for my blog post this week I started looking at different articles to jolt an idea. The other day I came across a post asking a simple question that struck a thought, “Do inventory management systems really work?” As a professional working with, and promoting, an inventory management system, this question made me pause. I couldn’t help but wonder if this was how many people felt about such tools. With so many wholesale distributors across the globe, it would be easy to assume many have their doubts about such software. In this blog I decided to list some of the perceived pros and cons so those who have the above question can make a well informed decision that best suits their company.

Growing up, whenever my parents had good and bad news, I always had them start with the bad news. With that, here are some of the drawbacks people share in regards to inventory management software:

  • Some systems aim to keep the bare minimum of stock on hand. This sounds good in theory, until all of a sudden you get the surprise order, or that larger than normal order that causes shortages in your inventory. This is usually avoided by keeping safety stock on hand.
  • As with all technology, nothing is perfect. There is a fear of glitches and that the software can succumb to computer crashes.
  • Most people value their privacy, and they feel RFID (bar code) technology can impede on their privacy by making purchasing habits more visible. They also believe the RFID readings can cause issues amongst each other and give skewed information. This is not the typical case however.

warehouse-stock-500x241Now that we have discussed the negatives of inventory management systems, let me brighten the mood a bit and share the many benefits of such inventory tools, that most wholesale distributors feel outweigh the negatives:

  • Contrary to above, the goal of the right inventory management system is not to minimize your inventory, but to “right-size” it. Meaning, finding that sweet spot where your inventory is working at maximum efficiency and you’re not frequently out of stock yet you don’t have too much inventory, possibly resulting in dead inventory. The goal is to find the zone where you are never losing money on your inventory in either direction.
  • One of the greatest assets of inventory software is the visibility it offers. You can see your entire inventory and its’ performance within the software. The tools allow you to see how your inventory behaves day-to-day, week-to-week, etc. You are able to analyze the patterns and match them based on the inventory’s history. This is all done within the software, quickly and easily.
  • With everything involved in the software solution, you will experience growth within your company. You will see opportunities to save money in some areas while earning more in others. The ease of use of many of these tools allows anyone from the owners to the purchasing team to understand how inventory is behaving. As your company grows the software will take notice and grow with your company.

Obviously these are not all of the pros and all of the cons of inventory management systems, just a few of the key ones. I hope these help better inform consumers considering such a system. Do you agree with my lists above? Is there anything you would add to either? Please leave your thoughts below.

Like this blog? Please subscribe, share with colleagues and also follow us on LinkedIn or Twitter and we will send you notifications on all future blogs.

Request a Demo of Cutwater's AIM (Advanced Inventory Manager)
Click Here
  • Hello Michael Quinn
    When I start reading your post I thought like you are critic of inventory management software and while I ended reading the article I concluded that you are great expert of what inventory management software can do and what can happen when we completely got dependent on them and they stop responding to us … I would like to add one more thing that inventory management software can’t handle the complexity of every business they are programmed on a same line one software so human efforts are always superior at the end .

Subscribe to receive inventory management insights from Cutwater!