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Importance of the inventory management system in online business: Shopify

Vashu Bhatt
Published: September 23, 2022

To know the Importance of the inventory management system in online business read full the article.

So let’s start with the stock, We can say that stocks are the assets of the company and companies can do anything to manage their inventory. Stocks/ inventory of the organisation are the main sources of income or the helping hand to generate income.

Inventory can be raw material, finished products, components, excess inventory and MRO goods.

inventory-banner

What is SKU?

SKU stands for the store keeping unit, By using the SKU you can easily track inventory. SKU is different for each and every product and for its variants also.

Different organisation create their own SKU for their product to keep track of their stock and inventory.

For example:

An organization is having 50 different products and to keep track of quantity a unique number or differentcode is assigned to all 50 products.

Types of inventory

types-of-inventory

Raw Materials:

In the manufacturing company raw material is used to create or produce the finished goods. raw material can be anything that transforms or convert into finished goods.

For example:

A company that makes shirts has components that include fabric, thread, dyes and print designs.

Components:

Components are the assets of the company that the company use to create goods from the raw material and components can be screwdriver and hammer etc.

Work In Progress (WIP):

WIP inventory stands for work in process and includes workers, overhead, raw materials or componentry, and even packing products.

For example:

A cell phone consists of a case, a printed circuit board, and components. The process of assembling the pieces at a dedicated workstation is WIP.

Finished Goods:

Finished goods comes from raw materials and ready to sell and buy from the seller and buyer. finished goods can be any ready product like smartphone, furniture, car and house etc.

Maintenance, Repair and Operations (MRO) Goods:

MRO is inventory known as the goods that supports making a product or the maintenance of a business.

For example:

include copy paper, and printer toner, etc.

Excess Inventory:

Excess inventory, often referred to as obsolete inventory, is unsold or unused merchandise or raw materials that a business must pay to store even though it doesn’t aim to use or sell them.

For example The dummy pieces of products in the store.

Importance of inventory management system

The inventory management process is one of the success key to taking your business at boom. Big – companies are doing this process as it’s not easy to manage the record of inventory from the different warehouse

Benefits-of-Inventory-Analysis
  • Enhances Cash Flow
  • Minimizes stockouts
  • Enhances Client Satisfaction
  • Reduces Inventory Waste:
  • Increases Your Business Understanding

Best ways to manage inventory

To manage the inventory companies follow different strategies and methods to update the inventory on a date.

  • Carry Safety Stock.
  • Start a Cycle Count Program.
  • Use Batch
  • Invest in a Cloud-based Inventory Management Program.
Best-ways-to-manage-inventory

There are so many ways to manage the inventory but everyone wants the perfect way so let’s discuss the best Cloud-based Inventory Management Program.

We, Webkul introduced an application for Shopify so that if you are running your store on Shopify you can easily track and manage and update you inventory as per your convenient

To check the installation on your Shopify store click here.

Webkul gives you warehouse management system app with the amazing features that everyone is expecting from a perfect software.

  • Automatically fetch data of the product stock.
  • Admin can add limitless warehouses under one location.
  • Admin can create a default warehouse also.
  • Order return management.

Support:

Thus, that’s all about the Importance of the inventory management system in online business. If you have any issues, please feel free to add a ticket  [email protected].and let us know your views at our HelpDesk System

Source: webkul.com