The Ultimate Guide to Automated Inventory Management Systems

The Ultimate Guide to Automated Inventory Management Systems

Automated Inventory Management

When it comes down to it, growing the value of a business is pretty simple. You need to either cut costs, increase revenue, or do both.

As always, the devil is in the details, and the mechanics of how to execute this can get very complicated very fast. In the world of eCommerce, where margins are often razor thin, the best way to accomplish these two goals is through better inventory management. Better inventory management often means automated inventory management.

Automated inventory management systems can save businesses significant amounts of time and money by streamlining many processes, including stock controls.

By having robots and computers do the heavy lifting of inventory control, businesses can reduce the risk of overstocking or understocking while also eliminating all or most human errors in organizational processes. This also frees up more time for you to get out of the daily operational weeds and spend more time on strategic growth planning for your business. 

In this post, we’ll look at:

  1. A definition of automated inventory management
  2. The benefits of automated inventory management vs. manual methods
  3. How an automated inventory system works
  4. What to look for when shopping for an inventory management system

What are automated inventory management systems?

Automated inventory management systems are software solutions that streamline and automate the process of tracking stock levels, reordering stock, and managing warehouse inventory.

They can be used in a variety of settings, from small businesses to large warehouses, and can be customized to suit the specific needs of each business. They also can be growth engines to help aspirational businesses grow over the years.

Automated inventory management systems work by integrating with a business’s existing accounting, point-of-sale (POS), and other mission-critical systems.

This gives businesses a real-time view of their stock levels, so they can make informed decisions about reordering and stock control. It also frees up employees and owners and opens the door for greater scaling potential.

Who can benefit from automated inventory management systems?

Any business that needs to track and manage inventory can benefit from an automated inventory management system.

This includes businesses that sell physical goods, as well as businesses that offer services that require the use of materials or parts (such as automotive repair shops).

Inventory management is a critical part of any business, but it can be especially important for businesses that operate in highly competitive industries with slim profit margins.

In these cases, even a small mistake in inventory management can lead to big losses. Automated inventory management systems can help to minimize the risk of stockouts, overstocks, and other inventory-related problems. It also helps reduce the secondary issues of stockouts which are poor customer reviews and loss of future sale opportunities.

How does an automated inventory management system work?

An automated inventory management system often acts as a central repository and single source of truth for all of an organization’s product and inventory data.

Many IMS platforms, such as SkuVault, allow users to view all customer orders and where they are in the logistics pipeline. They may also allow users to view sales forecasts and run reports to better analyze and understand business trends.

Automated inventory management systems typically include the following features:

Stock level tracking

Automated inventory management systems track stock levels in real time, so businesses always know how much inventory they have on hand. This information can be used to make informed decisions about reordering and stock control.

Reorder alerts

Automated inventory management systems can automatically generate reorder alerts when stock levels reach a certain point. This helps to ensure that businesses never run out of inventory.

Scanning support

Automated inventory management systems often support a multitude of different scanning options, including barcode scanning, RFID scanning, and GPS tracking. This information can be used to track the location of inventory at all times.

Warehouse management

Automated inventory management systems often include powerful warehouse management features, such as the ability to create pick lists and packing slips. This helps to streamline the process of fulfilling orders and can minimize the risk of errors.


Automated inventory management systems typically include a robust reporting module that allows businesses to quickly and easily generate reports on inventory levels, reorder history, sales trends, and more.

What’s the difference between inventory management and inventory control?

It’s important to understand the difference between inventory management and inventory control. While the terms are often two sides of the same coin, they do have different connotations and implications.

Inventory management is the process of tracking stock levels and reordering stock as necessary.

Inventory control, on the other hand, is the process of keeping track of where inventory is located within a warehouse or store.

One way to think of it is that inventory management is the entire discipline of managing your logistics pipeline, from customer order to delivery, whereas inventory control is the discipline of how you organize your inventory internally.

Automated inventory management systems usually include both inventory management and inventory control functionalities.

However, it’s also possible to purchase separate solutions for each function.

What are the advantages of automated inventory management?

So why spend the extra time and money to invest in an automated solution when manual processes can get the job done just fine?

Here are the advantages of using automated inventory solutions over manual ones.

Scale up your business with ease

As your business grows, so does the complexity. Automated systems make it easy to scale up your business without adding extra personnel or systems.

In some cases, automated inventory management software can mitigate the need to hire extra staff.

Automated solutions also prevent dreaded information silos where one or two employees contain all the required business information in their heads.

When they leave the organization, you’re left in the lurch without any recourse. Not so when you depend on centralized, cloud-based software to manage your essential inventory data.

Get your time back (and time is money)

Automated inventory management systems can save businesses a lot of time and money by automating tasks that would otherwise need to be done manually.

For example, if you’re selling products online, an automated system can track stock levels in real time and send automatic reorder alerts when stock is running low or hits your minimum inventory level.

This means that you don’t need to waste time manually checking stock levels or placing reorder requests. The system takes care of it all for you.

Automated inventory management can also save businesses money by reducing the need for physical inventory checks.

Physical inventory counts are both time-consuming and error-prone. Automated systems, on the other hand, keep a real-time record of inventory, so physical checks are only necessary if there’s a discrepancy (and when it comes time to do your audits).

Additionally, automated inventory management systems often come with built-in reporting functionality.

This means that you can quickly and easily generate reports on your inventory levels, stock movements, reorder history, and more.

No more wasted time sorting through spreadsheets!

Make data-driven decisions

One of the biggest advantages of automated inventory management is that it helps businesses make decisions based on data, not gut feelings.

With an automated system, you have access to all the information you need to make informed decisions about your inventory.

For example, let’s say you’re trying to decide whether to bring in a new product line.

An automated inventory management system can give you insights into past sales patterns, so you can see how likely it is that the new product line will be successful.

This information can help you make a decision about whether or not to take the plunge, and it’s something you simply couldn’t get with a manual system (or a lot of hours crunching numbers in a spreadsheet).

In short, automated inventory management systems give businesses the tools they need to make better decisions about their inventory. And that can lead to big benefits in terms of time, money, and overall efficiency.

Gain real-time visibility into high-level sales trends

Automated inventory management systems can also provide businesses with valuable insights into high-level sales trends.

This information can be used to make strategic decisions about product mix, pricing, and promotions.

Automated inventory management systems give businesses the ability to track sales data in real-time and generate reports on demand.

This information can be invaluable for making strategic decisions about your business.

Integrate all of your critical software solutions in one place

Many inventory management platforms, such as SkuVault, support integrations of dozens and dozens of the most common software tools for businesses.

This means that you can manage your inventory, accounting, customer relationship management (CRM), and eCommerce systems from a single platform.

This can save businesses a lot of time and money by reducing the need for multiple software solutions.

A centralized inventory management system can also help businesses to streamline their operations and improve efficiency.

Enjoy increased accuracy across the board

One of the biggest hindrances to efficient inventory management is inaccuracy caused by human error.

Think about the entire flow of processing a piece of inventory and how many things could go wrong. First, you receive the order and have to input all of the data into your system.

Then, you have to pick the items from inventory, pack them into a box, and print out a label. Finally, you ship the product and document the tracking information.

That doesn’t even bring the receiving process into the equation; actually, getting the product from suppliers or distributors into your warehouse. Lots of stuff can go wrong there, too!

Every time an order comes in, there are numerous opportunities for human error. Automated inventory management systems help to eliminate these errors by automating key processes.

For example, when an order comes in, it’s simply scanned, and the data is automatically entered into the system.

The same applies to receiving orders, picking and packing, and shipping out inventory.

Inaccurate inventory data can lead to a number of problems, including overstocking, understocking, and missed opportunities. Automated inventory solutions help mitigate these issues.

Sync all online and physical sales channels

If you’re going to be competitive in today’s eCommerce marketplace, you need to diversify your sales channels. This often means selling on digital marketplaces like Amazon, Etsy, and eBay, your own website, and potentially even brick-and-mortar stores.

The problem is that it can be difficult to keep track of inventory levels across all of these sales channels.

Each marketplace or vendor has a different back-end reporting system, and manually reconciling these sales numbers can be very time-consuming and error-prone.

An automated inventory management system can help by integrating with all of your sales channels and providing real-time inventory transparency.

This way, you can be sure that you always have the right level of inventory on hand, no matter where your products are being sold.

Automated inventory management systems make it easy to sync your online and physical sales channels so that you always have an accurate picture of your stock levels.

Stop miscalculating stock-levels

Another common issue with inventory management is miscalculating stock levels. This can happen for a number of reasons, such as counting errors, incorrect data, and more.

Miscalculating stock levels can have a serious impact on businesses, as it can lead to overstocking or understocking.

Overstocking can tie up valuable capital in inventory that isn’t moving, while understocking can result in lost sales.

Automated inventory management systems can help to prevent miscalculations by providing accurate, real-time data on stock levels.

This way, you can be sure that you always have the correct number of products on hand, and you can avoid the costly mistakes that come with miscalculating stock levels.

How to implement an automated inventory management solution step-by-step

1. Determine your organizational goals

Before you can choose the right automated inventory management system for your business, you need to determine your organizational goals. Having clearly defined goals will not only help you know what to focus on but also let you know what not to spend your time on.

Think about what you hope to achieve with an automated system, and make a list of your goals.

Some common goals include:

  • Reducing time and labor costs
  • Improving efficiency
  • Scaling up the business
  • Staying on top of multiple sales channels

2. Choose the technology vendor

Now that you know what you’re looking for in an automated inventory management system, it’s time to choose the right technology vendor.

There are a few things to keep in mind when choosing a vendor, such as:

  • The vendor’s experience and expertise
  • The features and capabilities of the system
  • The ease of use and implementation
  • The price
  • Customer support offerings

3. Plan out your implementation timeline

Once you’ve chosen a vendor, it’s time to start planning out your implementation timeline.

Automated inventory management systems can be complex, so it’s important to have a clear and concise plan for how you’re going to implement the system.

Work with your chosen vendor to create a detailed implementation plan. This should include a timeline, milestones, and tasks that need to be completed. Your vendor should also be able to give you realistic timelines and expectations once they understand your current setup and goals.

4. Train your team on the new system

Once you’ve created a plan for implementation, it’s time to start training your team on the new system.

This is an important step in the process, as it will help to ensure that everyone knows how to use the system and that they’re using it correctly.

Work with your vendor to create a training plan for your team. This should include both online and in-person training, as well as ongoing support.

5. Go live with the new system

After you’ve trained your team on the new system, it’s time to go live with it.

This is the final step in the process, and it’s important to make sure that everything is ready before you go live.

Work with your vendor to create a plan for going live. This should include testing the system, creating a backup plan, and more.

Final thoughts

Automated inventory management systems can help businesses improve their inventory management processes and are essential for any inventory-based business that wants to scale up and increase its value.

By providing accurate, real-time data on stock levels, automated systems can help businesses to avoid miscalculations and make better decisions about their inventory.

SkuVault has helped hundreds of businesses in a variety of industries streamline their inventory management processes and increase their bottom line.

If you’re sick of wading through spreadsheets and constantly struggling to stay on top of inventory, check out our features page or reach out to our team for a live demo today.

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