One of the biggest puzzles that retail businesses face is stockouts and overstocking. Each scenario has its own unpleasant consequences: stockouts can lead to lost sales and dissatisfied customers while overstocking can lead to frozen funds and lost profits.
At such moments, it becomes clear how important proper inventory management is. Modern inventory management solutions come to the rescue and can help businesses optimize their inventory, improve efficiency, and reduce waste.
The guide will tell you more about digital inventory management and the details of inventory software development, market overview, core features, trending technologies, and more.
The inventory software will be helpful for:
- Logistics and transport companies: to optimize inventory management for cost reduction and ensure more efficient deliveries
- Retail business: to monitor inventory levels, control restocking, and optimize stock turnover
- Manufacturing companies: to reduce production and distribution costs by streamlining inventory management processes.
- Pharmaceutical companies: to accurately manage pharmaceutical inventory and mitigate risks associated with medication tracking errors.
- Hospitality and food service companies: to streamline your food and equipment inventory to provide a seamless customer experience.
5 Reasons to Invest in Custom Inventory Management Software Development
Inventory management software is a digital solution designed to monitor, control, and optimize a company's inventory levels and processes. Here are five compelling reasons why investing in inventory management software development can deliver significant business benefits:
1. Real-time inventory tracking. Inventory management software allows real-time tracking of inventory levels, location, and movement. Thus, you can accurately track inventory across multiple warehouses, reducing the likelihood of shortages, overstocking, or misplacement of goods. This level of control increases customer satisfaction and operational efficiency.
2. Demand Forecasting. Many Inventory management software incorporate advanced data analytics tools for demand forecasting. Companies can make more informed replenishment decisions by analyzing past sales trends, reducing overstock, and minimizing inventory.
3. Order and Purchase Management. Inventory management software allows businesses to automate order creation and processing. When inventory levels reach predefined thresholds, the program can automatically generate purchase orders, ensuring timely replenishment. This optimizes the procurement process and prevents supply chain disruptions.
4. Enhanced reporting and analytics. Inventory management software provides extensive reporting and analytics capabilities. Businesses can create detailed reports on inventory turnover, storage costs, and sales velocity. This data enables informed decision-making by optimizing inventory levels and reducing inventory costs.
5. Reduced costs and errors. Inventory management software minimizes the need for manual data entry and the use of spreadsheets. Automation reduces human error, such as incorrect order quantities or product placement. In addition, optimizing inventory levels reduces costs associated with excess inventory.
Market overview: inventory management system
Let's look at some impressive statistics about the impact of inventory management software development on the supply chain. You can consider this data to make a more informed decision:
- , reducing stock-outs and overstocks with inventory software can lower your overall inventory costs by up to 10%. Besides, this study also show that about 72% of all retailers plan to leverage real-time inventory visibility using software, automation, and analytics
- that using inventory management software and item-level tagging can increase inventory accuracy by 63-95%
- that about 34% of businesses have had difficulty delivering on time due to a lack of inventory visibility
- shows that automated demand forecasting can achieve 90% accuracy, which allows businesses to win against the 60% accuracy of manual forecasting
Statistics show trends of positive experiences from implementing automated inventory management systems for various supply chain dependent businesses.
What Features Should Be Included in the Inventory Management Software?
Inventory software includes various features that can vary depending on the needs of a particular logistics business. However, there are several essential features that you should consider when planning inventory software development to ensure the minimum required functionality.
Integrating a barcode scanner allows employees to quickly and accurately scan product barcodes to update inventory and movement information. This reduces the time required for manual data entry and reduces the risk of errors.
Barcode scanner feature example (Source:)
The inventory management system gives you complete control over inventory, tracking the quantity of goods and their exact location in the warehouse. In addition, it allows you to monitor the movement of goods between different warehouse areas.
Inventory tracking feature example (Source: Сloudinary)
Order and purchase management
Inventory software allows you to automate the creation and processing of orders and the formation of automatic orders for restocking when certain predefined inventory levels are reached.
Order management feature example (Source: YouTube/BeProductiveOfficial)
By analyzing historical data and using forecasting algorithms, the system can predict future demand for goods. This helps to optimize inventory and avoid shortages or surpluses of goods.
Demand forecasting feature example (Source:)
Inventory management software typically includes functionality for working with suppliers, including managing contacts, pricing, delivery times, and supply agreements.
Supplier management feature example (Source:)
Reporting and analytics
The system can generate various reports and analytics, such as inventory turnover, storage costs, demand analysis, and other metrics that aid decision-making.
Reporting and inventory analytics feature example (Source: YouTube/BeProductiveOfficial)
Batch and serial number management
Inventory management software provides the ability to accurately record these details for businesses where it is important to track items by lot or serial number.
For businesses with multiple warehouses or stores, inventory software allows them to efficiently coordinate inventory and the movement of goods between different locations.
Multi-location management feature example (Source:)
Security and access
The system provides access control to inventory information to ensure data security and restrict access to only necessary employees.
Integration with point-of-sale systems allows inventory data to be automatically updated when items are sold in the store. This helps to maintain up-to-date inventory data and avoid shortages.
The system can send alerts or notifications when inventory of a particular item reaches a minimum level or when a potential shortage is detected. This allows you to respond quickly to demand changes and prevent deficiencies.
Inventory alerts feature example (Source:)
Some inventory management systems integrate with accounting systems. This makes it easier to record and track the financial aspects of inventory, such as the cost of goods sold and storage.
Some inventory management systems also include logistics functions that allow you to track the movement of goods between different locations and optimize logistics processes.
Expiration date tracking
This feature of inventory software is essential for businesses that deal with spoilage goods. It allows you to track expiration dates and send notifications about the quantity and location of expiring products.
Expiration date tracking feature example (Source: Skuvault)
We have listed the main features you can add to your inventory management software, but the functionality may vary depending on the complexity of your solution. Feel free to contact our Logistics Solution Architect to define a feature list tailored to your business needs.
Why Custom Inventory Management Software?
Off-the-shelf inventory management solutions are pre-built software applications designed for a wide variety of businesses with different inventory needs. While convenient and quick to implement, these solutions often do not consider individual companies' unique complexities and requirements. This is where custom inventory management software comes to the rescue.
Let's take a look at the main reasons why custom inventory software development meets business needs better:
Customization to your workflow. Every business has its own workflows, processes, and inventory management strategies. Custom inventory management software is designed to perfectly match your existing operations perfectly, ensuring the software is tailored to your business. This customized approach increases efficiency by reducing the need for process changes and additional staff training.
Scalability and flexibility. As your business grows, so do your inventory management needs. Off-the-shelf solutions may not be able to handle the growing complexity. On the other hand, bespoke software development is scalable for changing requirements, enabling inventory management systems to cope with growing needs while maintaining optimal performance.
Integration with logistics systems. Companies often utilize different logistics software tools to manage various operations, such as accounting, sales, and customer relationship management. Custom inventory management software can be easily integrated with these existing systems, for example, you can use combined inventory management and routing, providing seamless data flow and real-time synchronization between different departments.
Specialized features. Custom software can be designed with specific functions to meet the needs of your business. Whether you require advanced reporting and analytics, integration with unique equipment (such as specialized barcode scanners), or specific inventory tracking capabilities, a custom inventory solution can meet these requirements.
Competitive advantage. Inventory management processes can be critical to your business's competitive advantage. By investing in custom inventory software development, you can differentiate yourself by optimizing inventory management to a level that off-the-shelf solutions cannot achieve. Thus, custom inventory software can help you increase customer satisfaction, streamline operations, and improve decision-making.
Data security and compliance. Depending on your industry, you may have specific data security and compliance requirements. Custom inventory management software development allows you to meet these requirements, ensuring that sensitive data is protected and processes are compliant with industry regulations.
Long-term cost-effectiveness. While developing custom inventory management software may require a large investment, long-term savings can be significant. Bespoke solutions eliminate the ongoing license fees associated with off-the-shelf software. In addition, custom software reduces the risk of operational failures and inefficiencies with generic solutions.
Explore how you can benefit from custom Warehouse Management Software development services to receive an automated tool for stock control
Inventory Management Software Development Process
Let's take a look at a typical inventory management software development process and the basic steps:
Find an experienced software vendor
First of all, you need to hire an experienced inventory management software development company. You can select one of the following options, depending on your needs and resources:
- In-house team. You can hire all the specialists in your city to work in your office. This approach will give you complete control over the inventory software development process and the ability to communicate with your team quickly. However, finding all the necessary specialists can be time-consuming, and you may experience difficulties hiring specialists in your region. Moreover, maintaining an in-house team requires additional administrative costs such as rent, insurance, etc.
- Outsourcing. This cooperation model allows you to hire a full team in any region to develop an inventory application. Thus, you get access to expertise and technologies from all over the world and can significantly save time and money on hiring and maintaining a team. Moreover, this approach allows you to reduce development time. However, when choosing an outsourcing vendor, you should pay special attention to customer reviews on platforms like Clutch and make sure that the team knows how to address communication issues and has experience creating logistics software.
- Team augmentation. This approach allows you to expand your internal development team by adding external developers or specialists for specific tasks. For example, if you need 1 designer, 1 developer, and 1 QA engineer, an outstaffing software vendor will provide these specialists upon your request. This approach will allow you to scale your development team and get quick access to the domain experts you need. The specialists will become part of your internal team and work under your supervision without additional costs.
The choice of collaboration model depends on a number of factors, such as budget, availability of experts, timelines, and the degree of control you want to retain. Each of these models has pros and cons, and the choice should be made based on the specific needs of your product and organization.
Learn more about how to hire remote developers with no mistakes
Requirements gathering and inventory system design
It's worth starting by discussing the critical nuances with your team to ensure that your inventory software meets all your business requirements. Hold a meeting where you discuss what data and processes the system will manage and what tasks it should automate. Once you've gathered the key requirements, share them with your software provider. They will help you determine what features need to be added to the first version of the application and design a system architecture that best meets your stated needs. At this stage, your technical partner will also help you determine the type of application: software-only or hardware-supported.
Planning the project in detail
At this stage, the team will move on to a deeper analysis of your requirements to determine the details of the product. Thus, the experts will evaluate the list of required features and create a design prototype. Also, the experts will determine the main scope of work and team composition needed for inventory management application development. Based on this data, your software provider will provide you with the project's cost estimate.
Development and testing
After defining all key requirements and architecture, the team will start inventory software development. They will develop your app in short sprints, creating specific functionality during each of them. Each sprint is necessarily accompanied by testing to identify and eliminate all possible bugs and ensure the smooth operation of the application.
Choosing a technology stack for inventory management software development depends on many factors. Here is an example of a technology stack our team apply to create inventory software:
- Database: PostgreSQL (SQL) or MongoDB (NoSQL).
- API: RESTful API for client-server interaction.
- Cloud infrastructure: Amazon Web Services (AWS), Microsoft Azure, or Google Cloud Platform (GCP) for hosting and scaling.
- Version control system: Git, using GitHub or GitLab.
- Development environment: PyCharm, Visual Studio Code, or IntelliJ IDEA for the backend; Visual Studio Code for the frontend.
- Monitoring and debugging tools: New Relic, Sentry, and Prometheus for performance and issue tracking.
Please note that these are just several components of the technology stack, but specific choices may vary depending on your product tech requirements and development team's experience.
Integration with other logistics systems
In this step, your software provider integrates the developed inventory software into your business environment. This step includes creating interfaces and mechanisms for integration, implementing the inventory software into the system, and testing functionality. Inventory management software can be integrated with the following software solutions:
Integration with other business systems can be essential to ensure smooth data flow and automate business processes related to inventory management. The specific list of software to integrate will depend on your company's needs and industry.
Migration of inventory data
To effectively migrate inventory data, the team starts with proper preparations. They can include cleaning, structuring, revising data formats, handling duplicates, and standardizing data. Once the data is identified and prepared, specialists use specialized mechanisms, scripts, and tools to load the data into the new system. This step is completed by verifying that the data is correctly mapped to your database fields and that the import process does not compromise data integrity.
Once the inventory software development is complete, experts will deploy the infrastructure on servers or in the cloud. The team will also customize the system according to the project requirements and ensure everything is installed and working correctly. Moreover, the QA engineering team will conduct additional testing of the inventory software in a real production environment to ensure the system is stable and running smoothly. These tests include performance, scalability, and security checks.
It’s recommended to train your staff to use the inventory system properly. You can introduce training materials (e.g., user manuals, video tutorials, and other learning guides to help your employees learn the new system. You can also provide your inventory managers with some training through webinars, lectures, hands-on training, or individualized instruction.
To ensure that your inventory software stays up-to-date and allows you to achieve the best long-term results, it's worth continuing to partner with your software provider for post-release support. Maintenance services include monitoring and support, bug fixes, updates, and improvements.
Trending Technologies in Inventory Management App Development
There are many trends in inventory software development. Their implementation will allow you to achieve better results and attract more customers. Let's take a look at the main inventory management software development trends that you can use for your solution:
Use of mobile solutions
Mobile devices are becoming increasingly popular tools for inventory management. Employees can use smartphones and tablets to scan barcodes, track inventory, and update inventory data in real time. Mobile devices simplify inventory management processes and improve data accuracy because employees can perform all necessary operations on the go.
New approaches to data analysis
Modern logistics and transportation companies operate with huge volumes of various data, which are difficult to analyze manually. New approaches to analytics allow for deeper analysis of inventory, consumption, and receipt information. Advanced analytics includes such tools as demand forecasting, sales pattern analysis, business intelligence and data warehousing, and makes turnover more accurate and predictable.
Machine Learning (ML) and Artificial Intelligence (AI)
AI and ML are essential in inventory software development and are increasingly being integrated into inventory apps. Artificial in Logistics has many applications, for example, it can automatically adapt inventory levels, optimize replenishment processes, and even predict future changes in demand. Its reinforcement with machine learning allows inventory management systems to process large amounts of data and identify hidden patterns. The inventory system self-learns and handles the job better each time by analyzing past data.
Computer vision technologies allow systems to "see" and recognize items and their characteristics based on images. This feature facilitates inventory processes and can also be used to check the quality of goods. Also, this technology allows for efficient barcode management and simplifies the order picking and packing process.
Increased integration with internal and third-party partners
Integration is becoming increasingly essential to ensure synchronization between different systems, both internally and with external suppliers, logistics partners, and stores. Integrating inventory management software with other logistics management systems allows for better data exchange, reduces the risk of errors, and speeds up processes.
How Cleveroad Can Help You With Your Inventory Software Development
Cleveroad is a logistics software development company with more than 11 years of experience in IT. Since 2011, we have been assisting startups and enterprises in developing digital solutions for logistics and transportation companies to reduce operational costs and optimize inventory and warehouse management and delivery. Our team has practical experience in logistics software development, including Inventory Management Systems (IMS), Warehouse Management Systems (WMS), Transportation Management Systems (TMS), Electronic Resource Planning (ERP), and more.
We would like to present you some of our successful cases on logistics project delivery:
SaaS Solution for Retail Business
We have created a SaaS retail platform for our US client, containing a suite of back-office management tools for retail companies. To meet the client's business needs, we:
- Created an iOS application on Swift with an intuitive UI/UX design
- Integrated the app with the Socket Mobile barcode scanner, allowing the iPhone to connect to the scanner via Bluetooth
- Created a separate Windows application to connect printers to portable data terminals
- Developed a statistics module to allow managers to track all key indicators for a selected period
As a result, the client received a custom retail platform that allows them to effectively manage inventory, control performance, and increase efficiency and profits.
Transport Management System with Route Planning
For our other client, a logistics company from the USA, our team built a transport management solution integrated with the supply chain ecosystem. The customer wanted to optimize transportation to improve overall business efficiency. To address the client's business needs, we:
- Created a transportation management software solution that allowed tracking inventory at all stages of transportation
- Carried out a complete transfer of warehouses' information from the customer's WMS to our system
- Created a "Jobs for delivery" module and integrated it with the client's WMS and CRM
As a result, the client received a custom transport management system that allowed him to optimize deliveries, improve inventory management and fleet control, and reduce logistic overhead by 27-36%. Moreover, the client was able to fully optimize the entire supply chain management cycle with a single logistics ecosystem.
If you want to create your own inventory management software or upgrade a legacy system, we are ready to help you!
Start building your inventory system
Our team with 11+ years of experience in logistics software development is ready to create a custom inventory management solution for you to avoid stockouts and overstocking
Inventory software development requires passing several important steps:
Step 1. Search for an experienced software vendor: Research and select a professional software vendor for your project.
Step 2. Create requirements and design an inventory management system: Determine the functional requirements and design the inventory management system.
Step 3. Detailed project planning: Develop a detailed project plan, including timelines and resources.
Step 4. Development and testing: Build a software product and conduct testing to ensure its performance and quality.
Step 5. Integration with other systems: Linking your inventory management system with other business systems for data exchange.
Step 6. Inventory migration: Migrate your existing inventory to the new system.
Step 7. System deployment: Install and configure the system to run in a production environment.
Step 8. Personnel training: Train employees and teach them how to use the new system.
Step 9. Post-release support: Providing technical support and updates after the implementation of the system.
Inventory in software development refers to the collection and management of digital assets, resources, or components used in the development process. This includes software modules, code libraries, templates, design elements, and other items necessary for creating and maintaining software applications. Effective inventory management ensures that developers have access to the right resources when needed, streamlining the development process and reducing duplication of efforts.
The cost of creating an inventory management system can vary widely based on factors such as project complexity, features, technology stack, and development resources. Here's a general breakdown:
- Small-scale system: For a basic system with limited features, expect costs of $10,000 to $30,000.
- Mid-sized system: A more comprehensive system with additional features like reporting, integrations, and user roles could cost between $30,000 and $100,000.
- Enterprise-level system: Large-scale systems with advanced features, scalability, and customizations can cost $100,000+. Remember that ongoing costs may include maintenance, updates, and support. Working with a software development team to get a precise estimate tailored to your specific project requirements is essential.
Evgeniy Altynpara is a CTO and member of the Forbes Councils’ community of tech professionals. He is an expert in software development and technological entrepreneurship and has 10+years of experience in digital transformation consulting in Healthcare, FinTech, Supply Chain and Logistics
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