What are the Benefits of a Computerized Inventory System?

Whether managing a few hundred items in one location or millions around the globe, a computerized inventory system has numerous benefits.

Considerations

Implementing a computerized inventory system requires a number of considerations. The buyer must consider ease of implementation and use, vendor reputation, system expansion, training, vendor support and budget constraints.

Financial benefits

According to Donald Reimer and Ravi Nayar in Corporate Detroit, "Industry averages suggest that a 20 percent reduction in inventory is achievable with a computerized inventory control system."

Other benefits

A computerized inventory system helps management control the inventories, in turn lowering overall operating costs in the areas of labor, facilities and logistics. A computerized inventory system also improves customer-service metrics and fulfillment rates.

Best practices

To fully realize these benefits the company must institute best practices in planning and setup, collaboration, inbound merchandise and inventory management and fulfillment.

Cost concerns

Reimer and Nayar also state, "The cost of implementing the system goes far beyond the cost of the software package itself. The effort and time could be as high as 5 to 10 times the cost of the package. But the benefits of the system would still far outweigh the costs for a typical company."

References

• Corporate Detroit article by Donald Reimer and Ravi Nayar

Resources

• SAP