2018-12-28 09:10:24Accountant AdviceEnglishhttps://quickbooks.intuit.com/blog/us_blog/uploads/2018/12/Automation-.pnghttps://quickbooks.intuit.com/blog/accountant-advice/6-reasons-why-automation-can-help-you-manage-inventory/6 Reasons Why Automation Can Help You Manage Inventory

6 Reasons Why Automation Can Help You Manage Inventory

2 min read

The basics of supply chain planning have remained steadfast throughout the decades. The idea is to get the right product into the hands of the consumer as fast as possible. While doing so, make sure that stock-outs, or other inventory-related issues, do not become a reality. Streamlining this process has always been on inventory management leaders’ minds and they’ve done a pretty good job in getting it.

However, in more recent times, automation has become more popular as a means of increasing both the efficiency and the visibility of the supply chain. Some areas where automation is already implemented include warehousing, inventory receipt, procurement, stocktaking and order fulfillment.

While the overall lead time has been reduced thanks to the automation of these individual processes, the time needed to link them together can still be improved. Likewise, there is also the issue of people in different departments failing to communicate effectively. It can further reduce the time gained by automation in the areas above.

For various reasons, businesses are somewhat slow in their automation efforts. Despite the many benefits that it has to offer, inventory managers may be too busy with other day-to-day tasks and concerns to give sufficient thought to automation. Luckily for them, however, it is the automation that can take away many of those tasks in the first place. So, how does automation streamline and optimize inventory management? Here are six reasons.

1. Better time efficiency. Inventory management automation can have both direct and indirect benefits to your company’s overall efficiency. Manual data entry and tracking are two processes that are time-consuming, and also costly and somewhat complicated. Automating these processes will not only ensure that they are completed efficiently, but also allow your staff the time to redirect their attention to other business-related activities.

2. Scalability. As a company grows and expands, its inventory system will also increase and become more complex. Automation can mitigate any future issues that may arise from this growth and will ensure a smooth transition overall.

3. Improved accuracy. Human error is a natural part of every operation and is something that we had to cope with for a very long time. But, with automation, the human factor is reduced, eliminating any guesswork in the process. Scanners and POS systems, for example, can produce real-time data, directly from the source. Other systems can generate orders based on preset metrics, helping you ensure that data is always current and that human error is kept at a minimum.

4. Easy integration. When considering automating inventory management, it’s essential that you implement an integrated solution. It’s the best way to guarantee that interdepartmental communication and collaboration will not become a problem, or aggravate an already-existing one.

5. Increased visibility. No doubt, the best benefit that automation brings to the table here is the increased and real-time visibility of your inventory. You will always be on top of things, and you will still know what items you have in stock. Not only can you operate the business better and smoother, but it also helps you produce the necessary management reports required to oversee your business performance.

6. Lower supply chain vulnerability. Automation can also help you manage any adverse effects, in case of an unforeseen circumstance. For instance, a supplier may run out of inventory, in which case your automated system would identify other potential suppliers that could fulfill the order. It will help smooth out the lead time and adopt a leaner approach to inventory management.

In short, inventory management automation can help you streamline the day-to-day operations and increase your lead time.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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