Inventory Management Systems

When Is The Right Time To Implement An Inventory Management System?

For many businesses stuck in stage 2 or stage 3, the additional cost of both implementing and maintaining an inventory management system can be too costly unless there is an increase in profit.

Due to various inventory issues, ecommerce business owners feel that they cannot grow their sales without optimizing technology. This reality creates both hurdles and delays for business owners when it comes to scaling their business.

Here at Clearinity, we make sure to work through cost-benefit analysis with you. We want to provide you with the key signs and questions to help you identify the right time to implement an inventory management system for your business.

Looking For Stability

The dream of many entrepreneurs is to create both a viable product and a future for their business.

Often, viability comes from the chaos of entrepreneurs turning to:

  • expansive visions
  • expanded product development
  • heavy marketing budgets

Entrepreneurs turn to all these things in the hopes of creating profit. Although when companies emphasize too much on viability, they lose sight of their people and processes which is also vital for expanded growth and sustainability.

In addition to profiting, many businesses we encounter are “launch” focused.

These clients seek to “keep up with the jones” and launch new products often to stay relevant. These clients believe that launching new products is the way to both stay profitable and ahead of the competition. But instead, these clients experience out-of-stock, accounting backlog, and most of their resource money allocated in marketing.

When these business owners grow tired or become more aware of the failing launch cycle mentality and the expansive unsustainable growth, they turn to technology looking for stability and solutions for the growing problems in other departments like accounting and customer service. 

By the time the owners grow to this level of frustration and fear, the resources for implementation after support and process documentation are all dried up. 

So what can be done differently as a more balanced, proactive approach to scaling and planning for technology implementation? Analyzing your resources.

Sustainable and successful inventory management implementation looks at these three areas:

  1. Do we have the manpower? 
    1. Inventory management software and ERP systems require dedicated controllers, and team members willing to take on a few more hours to help facilitate a large process change
    2. Additionally, inventory management software is being implemented to help you grow your business. If you grow, will you have people to help you manage the increase in order volume? 
  1. Am I going to be able to hit my revenue goals without a system? 
    1. Sometimes technology is just nice to have even if it feels like the wheels are coming off the bus. 
    2. Occasionally business owners have found suitable work arounds that may last them a few more seasons until they have the true capital to do an implementation.
    3. Other times, technology will significantly help the company move forward and out of a deep well they have found themselves in. 
    4. Analyze and accept your current level of critical business decision-making. Get on an inventory system if you feel unable to make critical decisions due to lack of technology vs process changes.
  1. What time in the season of my business do I have the least distractions from my team and the most resources? 
    1. For many of our clients, their busy season is the late fall to the new year. Occasionally, we have a few clients that have spring or early summer as their season. The high busy season is not when you want to be thinking about inventory and operations overhaul, nor do you have the appropriate funds. There are also the rare few occasions where summer happens and everyone is on vacation. Thus, spring or winter might be ideal for this company.
    2. Pick a time that makes sense for your team.

Always make sure you prepare well before you embark on the journey of implementing an inventory management system for your business. The more you wait between discovery and implementation, the more your business evolves, changes, and would need more discovery!