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The digital age has led to a transformation of how we conduct business and ourselves in professional settings. As technological advancements continue to reshape the world around us, companies must respond accordingly to stay relevant and accessible to their target audiences. This has prompted many organizations to adopt a more digital approach to cataloging their assets. Digital asset management is one solution that significantly streamlines how businesses manage and organize their data. With a digital inventory system, companies can track their files online instead of using various spreadsheets or documents stored on local drives. Read on to discover why you need a digital asset management system and examples of best practices to implement in your organization.
What Is Digital Inventory?
Digital inventory is the collection and organization of digital assets. Digital assets can be anything from customer records to product parts and inventory. The goal of digital inventory is to provide a complete history of an organization’s assets. This ensures that the organization can track everything it owns at all times, which helps prevent loss and theft.
Companies can track purchases and sales through digital inventory. This data can help the organization determine how much money it made or lost over time and identify trends in sales and spending patterns.
By organizing digital assets into a single system, companies can reduce risk and simplify processes. They can also improve efficiency by eliminating the need for manual record-keeping or duplicating data entry efforts across multiple systems. Digital asset management software may be used to automate processes such as inventory control, purchase orders, vendor management, and payroll processing.
Apart from accurate and instantaneous synchronization of stock levels with front-end software, keeping track of the inventory, with the arrival and departure of stocks and every stage of its movement until it reaches the customer, is also imperative to real-time inventory management.
The convenience of inventory management is ensured by using unique barcodes, RFID (Radio Frequency Identification) tags, or even QR code-enabled automated systems to scan each product and reveal its status.
How Does Digital Inventory Work?
Digital inventory is an application that helps businesses track the inventory items on hand. It works similarly to traditional paper inventory but is much easier to use. Business owners can upload pictures or scans of their existing inventory, and tag and organize it all online. When they need to buy something new, they can check the digital inventory to see if the item is available at their local store.
Nowadays, most businesses are already using a digital inventory system. This is partly due to the growing popularity of mobile devices, which are becoming increasingly essential in business. But digital inventory can also help enterprises save money by reducing the time spent on paperwork.
By keeping track of every piece of inventory, businesses can stay organized and avoid costly errors. This is especially true when it comes time to restock items like toilet paper and ketchup bottles. Any company that relies on these products must have a written policy, so employees know what to do in these situations.
Traditional Vs. Digital Inventory: What’s the Difference?
Traditional inventory management is the oldest and most common way to track inventory items. This method requires employees to record each purchase or sale of an object manually. This can be time-consuming and labor-intensive.
With traditional inventory, a business must either physically check a list of inventory items against their sales or keep track of what they have in stock themselves. This can be tedious and error-prone, especially when many people are working with different types of inventory items.
Managing inventory traditionally also increases the risk of theft because it is easy for someone to sneak something past an employer not keeping a close watch on the store’s inventory. Some businesses use barcode scanning technology to help reduce this risk and improve accuracy. However, barcode scanning technology cannot completely eliminate the risk of theft.
Traditional inventory management has another drawback: it is expensive, requiring employees to track every sale or purchase made with company funds manually. However, many businesses still rely on traditional inventory management, even though it is often more costly than other inventory tracking methods. Digital inventory (or “hardware-as-a-service”) is a relatively new concept that combines the best of traditional and online inventory management.
A digital inventory system uses the latest technology to track the location, condition, and availability of physical assets at all times. This often provides an insight into businesses and makes sure they have the right items in stock to meet demand.
Additionally, a digital inventory system lets the organization have the transparency to monitor sales, revenue, and expenses in real-time. It provides a better idea of how the business is performing at all times, making informed business decisions in the future easier.
- But as with any type of inventory management, there are some trade-offs.
- Digital inventory is typically more expensive than traditional options. It requires regular updates and maintenance, so it can be time-consuming to keep up with.
- And finally, digital inventory systems are not 100% reliable. They could malfunction at any time or only show part of what’s going on in the world.
Challenges Traditional Inventory Management Faces
Managing inventory is an integral part of any business. A traditional stock management system allows a company to track and manage its inventory through a system of accounts receivable and payable. However, the shortcomings of the classical inventory management system are as follows :
Key Features of Digital Inventory System
The core features of the digital inventory system include:
Real-time inventory tracking
An absolute essential in the inventory management system, digital inventory allows the company to track real-time stock movements and further allocate the inventory operations.
Real-time inventory value
Efficient digital inventory provides real-time accurate inventory values that account for variations in the price of volumes that are purchased.
Automated reorder points and reports
Digital inventory has the functionality to set automatic alerts for stock depletion. It also allows the enterprise to generate reorder reports automatically for immediate stock replenishments.
Effective purchase and supplier management
An automated inventory system allows the company to gain control of the inventory operations, including purchasing. Managing inventory digitally allows due procedures to collect and store all the purchase data for future reference.
Accurate inventory report
Digital inventory allows the system to extract precise data automatically with pre-built reporting features.
Digital inventory aids in efficient batch/lot tracking for better management.
Flexible pick, pack, and dispatch
Digital inventory system allow the company to maintain a high degree of control and flexibility in the logistics operations of the supply chain management. It will enable the supply chain management to optimize the route for better performance and productivity.
Effective Cross-channel communication
Having multiple channels of communication is crucial for weathering any disruption. Digital inventory allows the company to integrate multiple channels for better visibility and performance.
Benefits of Digital Inventory
Benefits of digital Inventory include:
Omnichannel inventory tracking
Implementing digital inventory management solutions allows automated inventory tracking with multiple channels streamlined to a single dashboard.
Reduce inventory carrying expenses
Digital inventory provides accurate data and insights, lowering the risk of overspending.
Monitors real-time inventory
Real-time monitoring and analysis of the business is a breeze with digital merchandise.
Minimizes inventory errors
With digital inventory, reducing discrepancies in data collection and monitoring with automated tools and software is easy.
Boosts supply chain performance
Digital inventory helps establish faster and highly automated operational systems, increasing overall supply chain performance.
Best Practices for Digital Inventory
A significant part of improving internal efficiency and building an efficient supply chain process involves incorporating digital innovations. Some best practices to improve inventory management are:
Implement an efficient digital management system
Every business has a digital presence, and this presence is crucial for any organization’s success. However, not all digital management systems are created equal. In addition to being efficient, it is also essential that your digital management system is effective. This means being able to capture data, track events and trends, and run reports effectively. It also means being able to adjust your metrics and KPIs easily.
An effective digital management system will help you identify problems early on, which can help save you money in the long run. Implementing an efficient digital management system ensures your business thrives in today’s increasingly competitive market.
Install applications and software to automate inventory management
When it comes to inventory management, several different automated options can streamline the process. These range from software apps that can be installed on a computer or mobile device to hardware devices that can be installed in the warehouse for automated scanning.
Automation can also help with inventory management in several ways. For example, it can help keep track of what is being ordered and when it was ordered, which helps ensure that the right amount of inventory is on hand at all times. It can help ascertain that the right products are being ordered and track when and why an order is canceled or returned. Automating these processes makes ensuring your inventory levels remain accurate and up-to-date more straightforward.
Optimize or build a warehouse management system
Warehouse management is tracking and maintaining inventory and other enterprise assets in a secure location. It involves various activities, including managing personnel, monitoring equipment usage, and driving efficiency. Modern warehouse management systems (WMS) are software applications that help companies manage their logistics processes more efficiently.
WMS can optimize operations by improving inventory levels and routing shipments by offering real-time visibility across the supply chain. In addition to streamlining operations, WMS can help reduce costs by automating manual processes like order fulfillment. By reducing the need for manual data entry, WMS can also lower labor costs.
Depending on your company’s needs, there are several ways to approach WMS. Some companies may simply want to track inventory levels. Others may wish to optimize routes between warehouses or integrate ERP systems to track key metrics like sales or customer feedback. Regardless of your specific needs, looking for solutions that offer full functionality at an affordable price point is essential.
Choose the correct digital inventory partner
In today’s increasingly digital world, businesses must have a digital inventory system in place. These systems allow enterprises to track the location, condition, and movement of their assets, equipment, and products. They also help companies maintain accurate records of their inventory and boost efficiency. Several different digital inventory systems are available today, each with its benefits and drawbacks.
Businesses must choose the correct digital inventory partner that best suits their needs. Some common factors to consider when selecting a digital inventory partner include cost, type of inventory tracking system, ease of use, customer support, and commitment to innovation.
Traditional inventory refers to physical assets, such as equipment, tools, or raw materials. Digital inventory, however, refers to software and data used in the production process. It’s essential to account for both types of merchandise when running a business because errors can be costly and time-consuming. Efficient digital inventory can scrape out the complexities in inventory management with the infrastructure needed for the company to grow. Thus, investing in an efficient digital inventory has long-term benefits for your company.
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Digital inventory allows a business to supervise and control real-time inventory operations.
Digital inventory comprises automated inventory management systems that track direct inventory flow from production to warehousing, sale, and point-of-return.
The best way to implement efficient digital inventory management is to choose a third-party provider. A 3PL will provide the critical inventory management system and other relevant aspects to ensure an efficient supply chain process.
A digital inventory offers an automation framework to minimize manual operations and human errors. Accurate data interpretation helps in lowering unnecessary inventory expenses.
Some of the benefits of automated inventory include:
- Real-time inventory tracking
- Reduced overall inventory expenses
- Improved order fulfillment accuracy
- Automated inventory operations