Inventory management: What you need that you might not know about

Thanks to the cloud, innovative (and previously expensive) business practices are no longer out of reach. One thing all companies who make and sell products have is inventory — of the products you have in your warehouse(s) and possibly what's at your resellers' and customers' locations; of components, of raw materials, tools and other supplies involved in making your products; and of what returns you have.

Knowing how to manage and track your inventory is essential to running a business. And while intricate IT solutions used to be out of reach for small businesses (whether due to price or scale), today, the cloud has democratized inventory management for all.

If your business is still using clipboards or spreadsheets, or old and ornery inventory premises software, here are some cloud-oriented thoughts and advice.

Take inventory management into the cloud

Like it does for other IT functions, using a cloud-based inventory management system has compelling business benefits:

• No more worrying about on-site servers. Make sure your system and information is secured from theft, damage, power outages, overheating, failure, etc. A cloud-based service gets you out of the worry-about-hardware business.

• No more worrying about software upgrades. Cloud-based services handle this for you. Also, no more worrying about an underlying operating system, and keeping that OS updated and patched.

• No more worrying about the corresponding software for employee desktops and notebooks. Cloud-based software typically is accessed via web browsers, with apps available for employee and customer mobile devices.

• Accessible from just about anywhere — office, warehouse, or on the road. To access cloud services, all that's needed is a wireless or wired Internet connection, and a desktop or notebook computer, or a tablet or smartphone. This also lets groups and teams around the country or world collaborate on decisions.

• Pay for the service you need, and don't worry about running out of hardware or storage capacity as your volume grows — and be able to serve more offices and warehouses without additional IT involvement.

Cloud inventory management can do more

Moving to the cloud isn't just about simplifying the IT support for an inventory management system. It's also your chance to get a raft of new inventory management capabilities, like:

• View inventory in real-time (versus only nightly or weekly) — so point-of-sale, customer support and others can see whether requested items are available, and you can get low-inventory alerts.

• Send packing lists for each order directly to warehouses.

• Automate input for what's received and removed, including through barcode scanning.

• Analyze sales by location, reseller, time-of-year, pricing and more.

• Do shipment tracking, including reorders and returns.

• Integrate with e-commerce and delivery services like Amazon, eBay, ShipStation, UPS and Fedex.

• Establish audit trails.

Connect inventory to your other business IT

The data used by an inventory system is relevant to other business activities in your business, such as customer tracking, invoicing, shipping, payroll, accounting, HR, point-of-sale and scheduling. Many of these fall collectively under ERP (Enterprise Resource Planning) or CRM (Customer Relationship Management).

Having your data in the cloud makes it easier to integrate with other functions or interface with leading business programs and services. Be sure to ask prospective inventory management vendors what other functions and modules they offer, what third-party software services they already integrate with, and what APIs are available.

Cloud inventory management offers many potential benefits, including more accurate buying, BI analysis to identify profit opportunities, and reduced inventory write-offs. Accounting, sales and manufacturing can use the insights for other business improvements.