Inventory management software frequently asked questions (FAQ)Inventory management software (also called inventory planning software) goes beyond simple record-keeping to provide optimisation, simulation and analysis you need to make better supply chain management decisions.Inventory management software can reduce inventory costs and improve customer service at the same time. It secures that the right amount of stock is in the right place at the right time and at the lowest possible cost. It has become a critical tool in many organisations as inventory carrying costs can be reduced by upwards of 30%. Below are answers to some frequently asked inventory management software questions:What does inventory management software do?How does inventory management software differ from other supply chain software?What is the difference between inventory management software and warehouse management systems?What are the advantages of using inventory management software?What is required to implement inventory management software?Q: What does inventory management software do?A: Inventory management software typically includes forecasting and replenishment modules. Forecasting helps you balance target service level or expected demand with inventories kept in stock and incoming supplies. Replenishment helps determine the safety stock levels that are needed at points along the distribution chain to satisfy orders at a given fill rate. A subset known as inventory optimisation software employs complex algorithms to recommend what to stock and in which quantities for meeting demand across the entire supply chain or at a specific location.Inventory management software is available standalone or in ERP and supply chain management (SCM) suites. However, not all solutions includes inventory optimisation and product life-cycle tracking which are key components for successful inventory management.Q: How does inventory management software differ from other supply chain software?A: The broadest definition of the term “inventory management software” would have to include Enterprise Resource Planning (ERP) and Material Requirements Planning (MRP) legacy software that records basic data on inventory. Advanced Planning and Scheduling (APS) tools help manage the raw materials and components used in manufacturing, and Warehouse Management Systems (WMS) have analogous features for warehouse inventory management. Today, the term “inventory management software” denotes a distinct category of specialised tools for collecting and analyzing inventory-related information for planning purposes.Q: What is the difference between inventory management software and warehouse management systems?A: A warehouse management system (WMS) primarily aims to control the movement and storage of materials within a warehouse and process the associated transactions, including shipping, receiving, and fulfillment. It controls and optimises the movement, storage, and tracking of inventory in and around a warehouse. In contrast, inventory management software optimises what products to keep in stock and in which quantities. Inventory management systems optimise the safety stock, reordering points and the economic order quantities (EOQ) of inventory to ensure that future demand can be meet according to plan.Q: What are the advantages of using inventory management software?A: There are very few projects that can increase profitability as much as inventory management in companies where the inventory or product flow is the core business.The quickest return on investment often comes from lower carrying costs. Below is a direct quote from an EazyStock customer outlining their operational and financial benefits of optimising their inventory:We reduced our stock levels by over $1 Million, corresponding to 23%, reduction in inventory while at the same time improving our service level by 13% pointsSvante Stenström, Supply Chain Manager at AxIndustries.3 main advantages optimising inventory management with software:You can reach the target service you are aiming for within 1 replenishment cycle. Higher service = fewer stock outs = higher sales.It reduces capital tied up in stock and frees up cash flow.It saves time and money by automating the procurement and replenishment processes.Q: What is required to implement inventory management software?A: Integration, data quality, and training are usually areas that require attention.Inventory management software must be integrated into existing ERP systems, often at great expense. Evaluate different system provider’s capabilities to integrate or transfer data between your ERP and the inventory management solutions. Often an implementation project takes 3 to 6 month but with EazyStock, you can get started with a simple Excel import and export data transfer. We have you up and running in days and your business will get value from the system within a week.Users often need training in inventory management methodologies before being able to handle the software. Just because the functionality in a system is advanced, it doesn’t mean that the user interface and usability requires a Ph.D. degree. We believe that every manufacturing and distribution company keeping stock should have access to a great inventory optimisation tool that is easy to understand and maintain. This is why we have developed EazyStock.