Key Considerations When Choosing a New Inventory Management System (IMS)
For product-based companies, inventory management is a vital component to the business' health, competitiveness, and growth. However, nearly 50% of small and medium enterprises (SMEs) either don’t track inventory or use a manual method of doing so.
Growing SMEs must appreciate the benefits of a robust inventory management system (IMS), and might consider a system migration to a platform that can sustain and propel business growth. The reasons to migrate to a new IMS can be many, including:
Your previous IMS was an excel spreadsheet
You’ve outgrown your current software
Not enough platform integrations, automation, and reports
The staff unable to access real-time inventory information from different locations
Too many manual tasks, human errors, and processes such as stocktake involve a large amount of time and resources
Requirements to connect with a new market or customer segment
You only know your real stock position when you’re the stocktake Other symptoms of these “growing pains” are dissatisfied customers, unnecessary rework, higher costs, and downtime in production. Choosing the right IMS for your requirements can be challenging. You must ensure that it fits your business needs now and into the near future, and helps you achieve your goals with good ROI.
Cloud-based inventory platforms solutions provide the most sophisticated technology — at the most affordable price point. However, ensuring performance, scalability, and reliability from your IMS requires you to consider many aspects.
Below are some questions that can help you define requirements, balance your needs with cost considerations and make an informed decision to select your new IMS:
Business requirements
Each company presents unique requirements, complexity, and characteristics. Detailed research of the business characteristics should include questions such as:
What type of product-business am I? (e.g.: wholesale? distribution? online? bricks and mortar retail? Pre-orders? Dropship?)
Which CRM functionalities are needed? Reporting? Sales management?
Is production done in-house? Do your suppliers require raw material to manufacture (contractor manufacturer)?
What are the required stock control methods for my products? (FIFO / FEFO / Batch / Serial etc)
Is the stock managed in-house or by a 3PL (third-party logistic)?
What is the go-live planned date?
What is the volume of transactions per day?
How many active SKUs (products) the system will need to manage?
Any other industry requirements?
Asking the right questions to cover your business' essential requirements can increase the chances of a successful migration.
Financial requirements
IMS platforms can cover a significant cost range, and the implementation will also require some resource planning. It’s better to understand the cash flow impact of the new system:
What is the budget for implementation? And the ongoing maintenance costs?
Are there costs involved with system upgrades? (this is especially important when comparing cloud-based with ERP platforms)
What are the costs involved if your business needs new integrations/add ons? (some solutions will charge you astronomical amounts to integrate their platform to another solution)
What’s the financial impact when we scale operations? (i.e.: add warehouses, retail stores, contacts, users, SKUs, etc)
Technology requirements
Most likely one of the project’s goals relates to automation and business technology needs. Similar to business’ requirements, it’s important to cover the main technical features and aspects:
What integrations are needed by the go-live date? And which integrations are required in the future?
How many users will access the IMS? What permission control is necessary?
Should we import historical transactions from the previous system?
Should we use the project as an opportunity to clean up the system?
How does the new system manage processes such as stocktake, lead-time calculation, and demand planning?
What sort of automation does the system offer?
How does the new system manage accounting data such as costings, stock in transit, WIP, and prepayments?
And that’s not all… Additionally, topics such as training and change management can make or break the IMS migration project. If not implemented carefully, the changes from a new system can turn into costly, time-consuming problems, due to the various challenges involved.
There is no point in spending time and money on the change itself if you fail to work out how you will implement it.
That’s why a seasoned partner can add value, save time and frustrations with such an important process. The right technology partner will bring a solid strategy, training capabilities, and continued support.
How Halkin Business Partners can help?
Whether you’ve already decided on your next system, or need help to define what are the next steps, the Halkin Technology team is ready to take your business to the next level. Book a free chat with one of our IMS specialists to discuss your business’s current Ecosystem and technology growth roadmap.
The Halkin Technology team are specialists in inventory management and technology implementation and can offer full support from planning and strategy to post-implementation, ensuring your business is set for success.
Halkin can help you find the best solution to automate your inventory management. We can walk you through the best cloud-based solutions in the market that will enhance consistency, transparency, scalability and help eliminate the root causes instead of only the symptoms.
