A Brief History of Inventory Management

Right now is a great time to be alive, isn’t it? I mean, we have so much technology that makes life easier and reduces the amount of time it takes to perform simple, mundane tasks. I think it’s good to step back every now and then and think about things we take for granted and acknowledge how good life is because of them.

One of those things I’d like to talk about right now is inventory management software. While many companies still aren’t taking advantage of it to the fullest, ones that are using it can easily forget how hard it was to manage inventory without it. So let’s go through a brief history of inventory management to see what an amazing invention inventory management software truly is.

In the Beginning

I suppose inventory management was first invented by Adam when he named all the animals or Noah when he counted the clean and unclean beasts for the Ark. But for the sake of brevity, we’ll jump ahead to modern times.

Before the Industrial Revolution, merchants basically had to write down all of the products they sold every day. Then they had to order more products based on their hand-written notes and their gut feelings. This was an incredibly inefficient and inaccurate way of doing business.

Merchants couldn’t really account for stolen goods unless they did time-consuming physical counts on a regular basis. They also had trouble making sure they got the right number of products when orders came in because of sparse recordkeeping. But it was the best they could do.

Hole-y Breakthrough, Batman!

Luckily, in 1889 a man named Herman Hollerith invented the first punch card that could be read by machines. By feeding sheets of paper that have little holes in specific places, people could record complex data for a variety of purposes from census taking to clocking in and out of work. This was basically the precursor to computers that can read data in tiny microchips. And Hollerith’s company even went on to form the world’s first computer company, IBM.

Harvard University took Hollerith’s idea in the 1930s and created a punch card system for businesses. Companies could tell which products were being ordered and also record some inventory and sales data based on punch cards customers would fill out for catalog items. Unfortunately, Harvard’s order management system cost too much and was too slow to keep up with rising business challenges.

The Best, Bar None

In the 1960s, a group of retailers (mostly grocery stores, at first) got together and came up with a new method for tracking inventory: the modern barcode. There were several competing types of barcodes before they were standardized with the Universal Product Code (UPC) in 1974. It’s still the most-used barcode in the United States today.

As computers become more efficient and cheaper, UPCs grew in popularity. In the mid-1990s, companies started experimenting with inventory management software that would record data as products were scanned in and out of warehouses. The technology evolved into a comprehensive inventory management solution by the early 2000s. And now, even small and midsize businesses can find affordable inventory management software to meet their needs.

Inventory management software has been decades (even hundreds of years) in the making. And now that it’s here, you should definitely take advantage of it to make sure your business doesn’t become history. Sign up for an online inventory software demo today.

A Scientific Approach to Inventory Management Software

Science is cool. Whenever I see an article or a website with the word “science” in it, I’m instantly intrigued. So when I saw an article entitled “What Are The Real Advantages Of Inventory Management Software?” on the blog Science Warp, I just had to read it.

Confession

And I have to admit, after reading that blog post I envied the author’s ability to put so much interesting content into just one post. In a blog post of my own, I talked about whether inventory management is a science or an art. I decided that, even though it requires a lot of scientific inquiries and data, inventory management is more of an art than a science because it requires so much creativity and flexibility to pull off.

The author of the Science Wrap article had his own interesting take on this discussion, so I’d like to share my thoughts on what he had to say.

Funny Aside

Just a side note: When I read someone else’s work I have a habit of finding all the flaws and wishing I could fix them. In this article, although there are plenty of grammatical oddities, I actually found them charming and funny rather than annoying. I especially enjoyed this one: “But there’s 1 distinct distinction and further use that manufacturing firm’s (sic) use this software program for.” Distinct distinction? A use that someone uses something for? [Face palm] Those are both redundant but incredibly cute and silly, darn it. There are so many slipups like that in here, but they make the post even more fun to read, strangely enough. Must. Resist. Urge. To. Praise. Bad. Grammar.

Okay, I feel better now. Let’s continue with a scientific approach to inventory management software!

Who Should Use Inventory Software

As I said before, this article covers pretty much everything you need to know about inventory software. They start with the basics, like what company types should use it: retailers, manufacturers, wholesalers, distributors and even service providers.

They then go into what makes up inventory management software: asset tracking, barcoding, order management and service management. I like how they separate these concepts. They cover pretty much everything that needs to be covered on this topic. Anything that they seem to have missed – such as accounting integration – can easily be included in one of the categories they list.

Different Focuses

Companies in the different industries will use inventory management software in a variety of ways:

• Retailers use barcodes, order management and asset tracking tools to balance their inventory.
• Manufacturers use the work orders, bills of materials and warehouse management tools to keep their production lines moving smoothly.
• Distributors use order management asset tracking tools, like retailers, to stay on top of their inventory levels and where orders are being sent.
• Service providers use service management solutions to track all of their costs and know what price to charge for their services.

It’s so nice to find someone else’s intelligent look at the benefits and uses of inventory management software. I highly recommend you go and read it. And when you’re done with that, you should get a free inventory software demo to put their theories to the test in your business.

My 10 Best Inventory Management Blog Posts of 2011

We are rapidly approaching the 100^th blog post on the Inventory System Software Blog. In honor of that and the fact that we just crossed over into a new year, I’ll examine my top 10 favorite posts that I wrote in 2011.

I average a new post every week, so I published about 50 last year. That’s a good number to choose my favorite from. I’ll count down from No. 10 to No. 1, and I’ll explain why each post made it on the list. So prepare to enjoy the cream of the crop from the Inventory System Software Blog!

10. I Heart Inventory Management Software

I really enjoy writing themed blog posts. Holidays lend themselves perfectly to this type of writing. Valentine’s Day is all about love and fluffy stuff like that, and I found a perfect way to use that to my advantage when discussing inventory management software, of all things. This made it on the bottom of this list because it’s not the most interesting or informative, but it’s just so fun.

9. Take Stock of Your Inventory Management

I’m always thinking of clever wordplays and silly ways to make inventory management more interesting. In this case, I managed to do that extremely subtly. Instead of taking stock of inventory, I encouraged readers to explore how they manage their inventory. I just love the mixture of honest questions and helpful suggestions in this post. It felt like I was sharing a conversation as I wrote it.

8. What Is Driving the Trend Toward Bigger Houses?

I don’t usually delve into controversial topics. For me, modern housing is controversial because I have some experience in the real-estate industry and I’m a little concerned about overconsumption, debt and other resulting problems. I found a way to frame the discussion in a way that hopefully challenged people’s perceptions of what they need and introduced a novel concept in warehouse management.

7. Top 10 Benefits of Great Inventory Management

Top 10 lists are always a challenge for me. Although the end result might seem effortless, it took a lot of time to put myself in a business owner’s shoes and figure out all the ways they can benefit by using inventory management software. This list, however, stands as an excellent resource for anyone on the fence about whether or not they should buy inventory software.

6. Scary Times Call for Brave Business Tactics

Halloween was coming up way too fast last year and I realized I didn’t have a Halloween-themed blog post in the works. That would have been a tragedy to pass up such a perfect opportunity to entertain my readers. So at the last minute I came up with this fun idea and ran with it. It turned out great, and it gave me a big confidence boost.

5. How to Survive a Double-Dip Recession

I’m an optimistic man. I like to think that things will turn out for the best eventually. But I’m realistic about the short term. In order to weather storms, businesses have to act prudently and cut waste without crippling their ability to bounce back. Writing this post helped me realize what an essential function inventory management software plays in helping businesses stay alive and prosper in the best and worst times.

4. Change the Way You Think About Inventory Management!

I had an epiphany while writing this post: I realized I was answering the what, when, where, why and how questions about inventory management as I went along. But I ran into a problem at the end. I thought the “who” was a bit too obvious. I’m talking to the reader the whole time, so of course I want that person to change. To solve this problem, I simply snuck the “who” in at the end. Pretty creative, huh?

3. The Difference Between George Lucas and Gene Roddenberry

I love movies. I’m fascinated by how much fervor fans have for the two big sci-fi series: Star Wars and Star Trek. I like them both, and I came up with a creative way to talk about them and then relate it back to inventory management. It wasn’t easy, but I pulled off something special with this blog post that resonated with a lot of people.

2. Is the Fastest-Growing Company Really the Best?

I was shocked when I learned that a company that was crowned the fastest-growing company in America in 2009 suddenly went out of business shortly thereafter. It was sobering to realize that growth isn’t the same as lasting success. I thought it might be a bit controversial to point out that fact, but this post surprisingly didn’t turn many heads. That’s too bad because I worry that in today’s society of instant news and overnight success stories, it’s important to emphasize the need for consistency and sustainability.

1. If That’s Impossible, How Am I Doing It Right Now?

One of my good friends and coworkers, Marilyn Bigney, inspired this blog post. She sent me the Chinese proverb: “The person who says it cannot be done should not interrupt the person doing it.” So many times throughout history one man or woman has had to buck all the wisdom of the ages to come up with a solution to a supposedly impossible problem. I love living in a country, and working at a company, that encourages such behavior. This post taps into that spirit and hopefully inspires readers to reach new heights.

Those are my top 10 favorite blog posts I published in 2011 on this blog. Do you have your own personal favorite? Even if it’s from another year or another blog, I’d love to hear about it. Feel free to share a comment below. Here’s to a great 2012!

An Optimistic Approach to Inventory Control

“If you don’t have an inventory management system, consider one,” says Kraig Quisenberry, a car dealer and general manager in his blog post “Inventory: Half Full or Half Empty?” “Just one mistake could cost you more than the system itself. I promise you won’t regret the investment. If you have a system, use it faithfully for 12 months, and you’ll see big results.”

I couldn’t have said it better. In fact, this blog post could end right now because Quisenberry has really just made my whole case for using an inventory management system. It saves you money, keeps you from making costly mistakes, and it takes time to see some of the biggest results.

Let’s Keep Going Anyway

Let’s back up a minute and talk about where Quisenberry is coming from. He’s a successful car dealer in Washington State, and he used to buy cars and manage his inventory based on gut feelings rather than hard data. Despite his overall success, he realized he was often losing money on vehicles he thought should have been safe investments.

Realizing something needed to change, he wisely started using an automated inventory system. “Looking back at my past purchases, before I used an inventory management system, my gut instincts alone didn’t serve me very well,” he says. “I have come to rely on data over the years like market scarcity, retail price index, strategic market view and sale-ability.”

It’s nearly impossible to keep track of all of those factors without a good inventory management system. Unfortunately, not every system is easy to use or contains the right features for a business.

You Get What You Put in

Quisenberry talked to some other car dealers who complained about their inventory systems. “We all agree that technology is a tool that is only as good as the information put into it. And with all the historical data stored over years of being in the business, my friends have valuable unused information on their hands.”

It’s so frustrating to have lots of information and tools, but be unable to use them because of either a lack of training or hard-to-use software. As I’ve discussed before, you need to be very careful when choosing inventory software for your business. Follow Quisenberry’s example and find one that is user-friendly and meets your needs without costing too much or being overly complex.

Affordable Inventory Management Software

Everyone is looking for a great deal. We want to know we’re getting a lot of value for the money and time we put into something.

This is, of course, true of inventory management software. When comparing inventory management solutions and trying to find the best deal, you should look beyond the price tag. Consider hidden costs, return on investment, ease of use and other factors that could either sweeten or break the deal for your business. All of this will help you find the most affordable inventory management software.

Hidden Costs

Instead of only looking at the obvious costs of buying inventory management software, think of the expenses that are harder to see. These include training costs, installation fees and more. Try to find inventory management software that is intuitive and user-friendly so you can quickly learn how to use it. You don’t want to spend too much time or money just getting started with the software. If you get a small group of your staff members initially trained on how to use the software, they can help train their coworkers.

Return on Investment

Even if an inventory management solution is a little more expensive than another, it may still be more affordable in the long run if it offers a higher ROI. Whichever software you choose should pay for itself within a fairly short amount of time by cutting your inventory expenses and making your business more efficient. Not every inventory solution will have the same impact on your bottom line. Ask the software providers for an ROI calculator to see how quickly you can recoup your costs and continue saving with their software.

Ease of Use

As I mentioned earlier, inventory management software should be user-friendly. It may not be the easiest thing in the world to master at first, but it shouldn’t feel like a constant struggle to get it to do what you want it to, either. If you have to spend a little more to avoid a lot of frustration with the software, it’s a small price to pay.

Beyond the Price

Think about other costs that can arise by buying the wrong inventory management software. If you get a cheap solution, it may work fine for a while. But what about when your company grows and you need more functionality, like multiple warehouses, cycle counting or advanced manufacturing tools? The cheap solution might not offer those features, and you’ll have to hunt for a new one. This means having to spend time and money searching for, buying and learning a whole new inventory system.

It’s a better idea to get a flexible solution that can add features over time when you need them. That way, you don’t have to pay for advanced features at the start, but they’re available when you need them.

Truly Affordable

If you’re looking for truly affordable inventory management software, you should be sure to take into account all of the above factors, in addition to the software’s actual price. Find the software with the features you need right now and in the future. As long as it’s user-friendly and in your price range, go for it!

Christmas Trees Face an Inventory Management Dilemma

Do you know how long it takes to grow a Christmas tree? A year? Two, maybe? No, it takes eight years to grow one. That’s incredible! What a huge investment of time and money. How would you like to be in charge of planning your inventory eight years into the future? That would be a pretty nerve-wracking job.

Risky Business

A Wall Street Journal article points out one of the dangers of trying to plan that far ahead: “When consumers do buy real trees in today’s tough economy, they’re opting for shorter, less expensive ones – often four feet or smaller – which are less profitable for growers. A persistent oversupply of trees has also held prices down in the past several years, as the current crop was optimistically planted during the economically robust times of the early 2000s.” (Emphasis added)

A Christmas tree is probably the ultimate perishable item. Not only do growers have to cut the trees down in order to ship them to customers, but they have to sell them in a narrow timeframe somewhere between Thanksgiving and Christmas Eve. That doesn’t leave much room for error when it comes to delivery times and inventory management.

Two Solutions

What can tree sellers do to mitigate these problems? Here are two ideas: use inventory management software and add artificial trees to your mix of items for sale.

Inventory management software lets you track shipments, monitor how many trees you have in stock, and even see trends in consumer buying habits. It’s pretty tough to look eight years ahead and make concrete inventory plans. But if you have access to a great deal of information on your customers’ previous buying habits, you’ll be able to make a more accurate decision than if you trust intuition or limited data.

Artificial trees are becoming much more popular, as people seek ways to cut costs and find a solution that’s permanent and doesn’t require any cleanup or disposal. They seem like much more attractive options for Christmas tree sellers, as well. They don’t take eight years to produce, they can be modified depending on customers’ preferences in a given year, and they won’t die like real trees after being chopped down.

Be Flexible

The Christmas tree industry could look much different in just a few years. Will real trees remain dominant or will artificial trees become the norm? It’s hard to tell, which is why tree sellers need to be flexible and not put all their eggs into one basket. Sign up for a free inventory software demo to see how inventory management software can help you make smart business decisions now and in the future.

And have a merry Christmas!

Small Businesses Need Inventory Software More Than Ever

Small businesses need to start using inventory software as soon as possible. Why is it so urgent? Because they don’t have much of a safety net anymore. “Before the economic downturn, many businesses could overlook inventory data because sales increases made up for inefficiencies in operations,” says Ted Hurlbut, a small business consultant in the CNBC article “New Rules of Supply and Demand: Sacrificing Inventory to Save the Store.”

As you can tell, that’s no longer the case. You can’t grow your way out of every problem. Eventually, businesses have to correct bad habits in order to survive, and one of the biggest problems that can hurt a small business is inefficient inventory management. Now is the time to start fixing it by using small business inventory software.

Let’s talk about three reasons why you need to use inventory management software in your business:

1. Run Leaner

Inventory management software is an extremely useful tool for businesses to cut costs and be more profitable. With it, you can reduce staff size, make your workers more productive, reduce your inventory size, and optimize your manufacturing, shipping and other business operations. All of this leads to a healthier company poised for growth.

2. Integrate with QuickBooks

If you’re currently using QuickBooks for your accounting (like the vast majority of U.S. small businesses) and you’d like to add more inventory management functionality to it, you should use inventory software that integrates with QuickBooks. A QuickBooks inventory management solution saves time by eliminating double data entry and keeping your inventory and accounting records accurate and in synch.

3. Plan Ahead

Instead of always playing a game of catch-up with your inventory management, you should try to be more proactive and flexible in your planning. Inventory management software gives your small business access to all the data you need to do this. You can get detailed reports on product sales, trends, delivery times, warehouse performance and more. With this information, you can prepare for seasonal demand changes, supply chain disruptions and more.

Don’t let inventory management fall by the wayside because it’s either too difficult or it doesn’t seem important. A company’s inventory is usually its biggest asset, and if you don’t keep close control over it, your business may have trouble surviving hard times. Use small business inventory software to run leaner, integrate with QuickBooks and plan ahead.