Enhancing Your Inventory Management System

Enhancing Your Inventory Management System

Your inventory management system has been with you for several years. You really are not ready to upgrade to a new system due to budget constraints. Your users are still learning how to determine what is on the shelves in your current system.

So how do you stay current and competitive relative to the supplier down the street – let alone compared to the supplier on the Internet? You know you need to upgrade your system, but you are happy with the way the system you have currently works.

There are several technologies available to distributors today that can enhance your current inventory system. You have probably heard the latest buzzwords:

  • Customer Relationship Management (CRM)
  • Barcoding and RFID
  • Web Storefront
  • Data Warehousing and Business Intelligence (BI)
  • EDI and Supply-Chain Management (SCM)

What does each of them mean and what is your return on investment (ROI) for each of them?

Customer Relationship Management

CRM is the technology that allows your company to capture each of the “non-transactional” touch points with your customer. Every time your sales force contacts a customer, it is logged in the CRM system.

In addition, your CRM system should be synchronized with your inventory transaction system to expose summary data to the sales reps as well. Your CRM becomes the one-stop source for customer and prospect information.

Having all the information in one location allows your sales reps and managers to see contacts, history, sales, orders, locations, credit and much more information about your customers and prospects.

The ROI on this system is the ability to respond to customer requests and inquiries quickly and efficiently. Ultimately, this should allow for either increased sales with the current sales force or stable sales with less sales force.

Barcoding and RFID

Barcoding has been available for several years, but is just starting to become ready for “prime-time.” Barcoding is the storage of information about products, bins, trucks, etc. in a series of lines.

RFID is becoming the latest hot-topic. RFID stands for radio-frequency identification. RFID has a small chip attached or molded into the product, bins, trucks, etc. This allows for the same information that is on a barcode to be available for those items that do not easily support a label. 

By using RF technology instead laser technology, the quality of reading the data improves substantially (remember the last time the grocery store couldn’t read the barcode?).

The price of the handheld devices is starting to drop and their weight is getting lighter as well. Add it all up and the ROI for bar-coding and RFID is getting better even for smaller distributors. But remember, if you do not have the business processes in place to support the technology, you only do things poorly faster after adding technology.

Web Storefront

You know that someday you will add a web storefront to your business. Customers may not be asking for it, but even you have purchased something from Yahoo or Amazon.

The key to your web storefront is to insure that it is completely database driven and can support manufacturers’ catalogs. Maintaining the storefront is the biggest obstacle to implementation. So ensure that you can easily download IDW or similar database into your catalog.

The ROI for this technology is based upon increased sales. If your customers or prospects will not be using it even for information, hold off until you know that they will use it. But don’t wait too long, because your customers may not know they need it until they use your competitors’ system.

Data Warehousing and Business Intelligence

Having a data warehouse and the associated analytical tools makes up the majority of your BI system. This does not require a large investment. If you can extract the data from your inventory system (all of them should be able to) and you can store it in a database system (again, no problem), you have a data warehouse.

Add Microsoft Excel (which you probably already have) and you have an analytical tool. Combine it all together and you have a BI system. Simple, huh?

This technology allows you to easily see who has been buying from you and what their buying habits are. Extrapolate a little and you can see where you should add a new store/branch or even what new product line to begin representing.

This technology has the best ROI, since the investment is typically very low.

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