What is an Inventory Management System?

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Fleet managers are constantly looking for ways to optimize their fleets. Inventory management systems are powerful tools that can help fleets improve their efficiencies.

You may think “why do we need an inventory management system?” But if you have thousands of parts to track and they are coming from a range of manufacturers, then you will need an organized system to avoid having unaccounted for assets. 

A fleet’s parts inventory often requires fleet management software. That way, the service department can keep running efficiently by staying organized, becoming transparent, and keeping an eye on costs. 

What is an Inventory Management System? 

Inventory management systems are for tracking goods through your supply chain. The entire process takes it from the initial purchase to the end sale, with production occurring along the way. Inventory management is important for avoiding wasted product, and inventory systems provide the input with which to make decisions. There are many different types of inventory management systems. 

Stocked products need to be precisely monitored and managed. Inventory management systems use hardware and software to automate all the procedures around this process. Company assets, raw materials, supplies, and finished products all have their own place in the supply chain, and inventory management systems make it easier to keep track of which goods are ready to be sent to vendors or end consumers. Technology is about simplifying processes while providing higher resolution data. Being able to access reports and go over advanced analytics makes it easy for organizations large and small to benefit. 

It’s possible to use inventory management systems to run entire business processes. You can generate estimates, build out work orders, and then schedule these tasks in one quick click. All of this helps for more accurate tracking of goods, less waste, and clearer identification of trends in the market. With all these benefits, businesses can’t help but make better investment decisions.Plus, the business benefits from increased transparency. 

Features You Need In Your Inventory Management System

Tools for Tracking and Scanning 

It’s essential that an inventory management service  be able to identify each inventory item and connect it to the relevant information (i.e. asset tags or barcode labels). This can be done with handheld barcode scanners or smartphones, since all phones have barcode reading capability.

Another option, aside from barcodes and scanning, is to use geofencing and asset trackers. Geofencing is one of the many useful ways fleets can utilize GPS devices installed in their fleet vehicles. With geofencing, you’ll receive alerts when something leaves the perimeter during unauthorized times. You can also receive real-time updates on assets no matter where they are. 

Inventory Optimization

With inventory optimization, your fleet can optimize their inventory holding amounts for each product. The less your fleet over- or under-stocks an item, the more you can save on waste or missed revenues. As a bonus, inventory optimization can be executed to factor in seasonal swings in demand. 

Stock Notifications

Receiving alerts and notifications when you’re under- or over-stocked will help you determine when you need to run a sale or special promotion. Setting thresholds prevents inventory from sitting on a shelf too long, and automates the process. 

Report Generation

Reports are about giving you information that you might not have intuitively figured out otherwise. For example, you may think that a certain item is a hot seller, but have a report show you that it’s far underperforming your expectations. Being able to categorize your sales history based on your most popular products is just one way you can use reports to make better decisions. 

Multi-Location Management

Of course, managing multiple locations at once greatly increases the level of complexity. The multi-location management feature enables multiple warehouses and point-of-sale (POS) terminals to be combined into a single inventory management system. Multi-location management combined with fleet route optimization can greatly improve the efficiency of your fleet. 

Stock Returns Handling

Time-to-return is an important metric in stock returns, and inventory management systems help reduce it by automating the process. 

Material Grouping

Reordering schedules depend on how materials are grouped. By setting predefined inventory sections and keeping up-to-date on when a material group is in low supply, more effective ordering can be done. 

Purchase Order Records

It’s easy to identify which products are hot in demand, even if it’s just seasonal, by aggregating your view of purchase order records. 

Strategies for Improving Fleet Inventory Management

Decide on Physical Organizational Structure

Manufacturers can be sub-grouped into electrical, hydraulic, pneumatic, and hardware, which helps fleets stay organized. Having a physical organization structure starts with labelling bin locations and the use of alpha-numeric ordering of all parts. Just by providing clarity to fleet managers on where lost items could be, this will deliver dividends to the fleet. 

Develop Parts Entry Procedure

A great strategy for improving fleet inventory management is to develop a parts entry procedure. To do this, it helps to build out a uniform procedure that everyone using your fleet management system will follow. 

Part number, description, manufacturer, unit of measure (UOM), part type, vendor, quantity on hand, and barcode information are key pieces of information that should be attached to every part record. If your company has multiple locations, it is even more important to push for consistency in the use of the system. The last thing you want is incongruence between each location, and for that to result in new orders going out when the part was stocked in a different location. 

This is why having identical products labelled the same way helps you aggregate total values across yards and maintain efficiencies. 

Manage On-Hand Quantities and Reduce Costs by Setting Smart Thresholds

This is an especially useful strategy for improving fleet inventory management. By setting smart upper and lower limits for the quantity of parts kept on hand, your fleet will be able to avoid running out of items you frequently use, or unnecessarily overstocking a part. 

Track expenditures

Your service department’s operating costs will vary from yard to yard. Tracking expenditures and mapping out usage information for different parts will help make better budgeting decisions going forward. 

Procedural Refinement

Remember that this is an iterative process. Management and staff should be constantly exchanging data to figure out what’s working with the inventory management system and where there are holes that need to be filled. By reassessing costs of inventory and vetting new potential vendors, the procedure will get smoother and there will be less over- or under-stocking.

There are many different ways fleets can be optimized. For access to cutting edge technology to help you do it, check out the products available on our website.