Inventory Software Development: What to Look for When Implementing

Updated 02 Sep 2023

20 Min




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
  • E-commerce companies: to track product locations and provide actual product availability
  • Feed and livestock: to improve food quality and prevent inventory material waste
  • Pharmaceutical companies: to accurately manage pharmaceutical inventory and mitigating the risks associated with expired medications
  • Hospitality and food service companies: to streamline your food and equipment inventory to provide a seamless customer experience
  • Electronics: to manage supply and optimize financial management

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:

Real-time inventory tracking

IMS 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.

Demand forecasting

Inventory software development implies incorporating advanced data analytics tools for demand forecasting. Companies can make more informed replenishment decisions by analyzing past sales trends, reducing overstock, and minimizing inventory.

Order and purchase management

IMS allows businesses to automate order creation and processing. When inventory levels reach predefined thresholds, the program can automatically generate purchase orders, ensuring timely replenishment. Thus, inventory management app development optimizes the procurement process and prevents supply chain disruptions.

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.

Reduced costs and errors

IMS 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.

What businesses can benefit from inventory software

There are many reasons why various businesses employ online inventory systems. One of which is because it offers efficient ways to manage inventory. It also helps in planning and forecasting activities.

Here are some of the leading industries today that use online inventory management systems:

E-commerce. In the ever-evolving e-commerce landscape, businesses must manage global distribution and 24/7 order processing. Online inventory systems enable them to efficiently track product locations, anticipate restocking needs, and provide customers with real-time product availability

Logistics and transportation. Inventory systems in logistics and transportation are essential for efficient supply and transportation accounting, providing logistics optimization and supply forecasting.

Food service. The food service industry serves a wide range of sectors, necessitating the meticulous control of food and supply inventory. An inventory system ensures efficient tracking of stock, prevents overstocking, and minimizes waste, ultimately supporting financial stability and health standards.

Electronics. Businesses dealing in electronic devices, often high in value, rely on online inventory management to track products, manage supplies, and optimize financial management, ensuring they meet customer demands efficiently.

Consumer goods. Retailers, especially those facing seasonal demand fluctuations, use online inventory systems for accurate forecasting. This enables them to optimize product purchasing and sales, enhancing sales, and customer satisfaction.

Feed and livestock. The feed and livestock industry, encompassing hog raising, poultry farming, and feed mixing, benefit from inventory management systems. They prevent inventory material waste, maintain feed quality, and provide batch-based inventory deduction for precise record-keeping.

Pharmaceutical companies. Pharmaceutical companies need warehouse accounting systems to accurately control medications, store them safely, and manage distribution to meet high standards of drug quality and safety.

In each of these sectors, the intent to develop inventory management software plays a pivotal role in ensuring smooth operations, cost efficiency, and providing best ways to manage 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:

  • According to research from Zebra, 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
  • Cision calculated that using inventory management software and item-level tagging can increase inventory accuracy by 63-95%
  • Meteor Space states that about 34% of businesses have had difficulty delivering on time due to a lack of inventory visibility
  • A study by McKinsey and Co 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.

Looking to build inventory software?

Get a consultation with our Logistics Subject Matter experts to plan inventory management software development and integration

What Features Should Be Included in the Inventory Management Software?

Inventory management software requires the implementation of features for several business roles:

  • Inventory and demand planning specialist role
  • Inventory manager role
  • Admin role

The functionality for each of these solutions is different, which is important to consider when planning inventory system development.

Let's take a look at the basic functionality for each of these roles:

Inventory and demand planning specialist

An inventory and demand planning specialist analyzes data on needs, demand, and market trends to develop strategies to optimize a company's inventory levels. They manage inventory, determine the optimal balance between demand and inventory, and improve planning processes.

This role requires inventory management software development with features such as:

Demand forecasting. By analyzing historical data and using forecasting algorithms, the system can predict future demand for goods. This helps to optimize inventory and avoid shortages of goods.

Demand forecasting

Demand forecasting feature example (Source: GMDH)

Supplier management. Inventory management software typically includes functionality for working with suppliers, including managing contacts, pricing, delivery times, and supply agreements.

Supplier management

Supplier management feature example (Source: Kloudville)

Inventory audits and replenishment. Inventory audits and replenishment streamline the process of tracking stock levels by facilitating regular inventory checks and comparing actual inventory counts with recorded data. This feature ensures timely restocking by automatically triggering orders or alerts for low-stock items, enhancing inventory control and minimizing shortages.

Inventory audits and replenishment feature example

Inventory audits and replenishment feature example (Source: Inventory Pro)

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

Reporting and inventory analytics feature example (Source: YouTube/BeProductiveOfficial)

Inventory manager side functionality

The inventory manager is responsible for accurately recording stock in the warehouse, controlling its movement and placement, and ensuring that stock levels are adequate to ensure smooth operations. They often make purchasing decisions, manage supplier relationships, and ensure that warehouse processes are up to standard.

Inventory system development for this role includes integrating such functionality:

Inventory tracking. The inventory management system provides 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

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

Order management feature example (Source: YouTube/BeProductiveOfficial)

Stock reconciliation. Stock reconciliation is an important feature that automates checking the actual level of goods in stock with the data in the accounting system, identifying possible discrepancies. This feature helps identify inventory control errors and prevent overstocking or shortages.

Stock reconciliation feature example

Stock reconciliation feature example (Source: Ascomp)

Warehouse organization. Warehouse organization improves warehouse operations by optimizing the location of goods to reduce retrieval time, improve access to goods, and streamline operational processes. It allows you to organize an efficient storage system for optimal warehouse performance.

Warehouse organization

Warehouse organization feature example (Source: Myofficeapps)

Batch and serial number. 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.

Batch and serial number feature example

Batch and serial number feature example

User access controls. User Access Controls, based on RBAC (Role-Based Access Control), is a feature that allows you to fine-tune employee access levels to specific data and functions in the system. By defining different roles and corresponding permissions, RBAC ensures security and prevents unauthorized access to important information in the warehouse and inventory management system.

Admin panel

The Admin panel provides security, access control, and system configuration. This role is responsible for managing users, permissions, and access control to data, systems, and apps. Integrating the admin role during inventory software development is essential to secure the system, prevent unauthorized access, and ensure the smooth functioning of the organization.

Admin responsibilities include:

  • System configuration
  • User management
  • Security
  • System updates
  • Backup and recovery
  • Troubleshooting and support
  • Setting up reporting tools within IMS to provide real-time insights into inventory levels and KPIs

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.

Custom Inventory Software vs. Ready-Made Solution

When planning inventory tracking software development, you can choose between two approaches:

  • Off-the-shelf solutions
  • Custom development from scratch

Each of them has its own peculiarities. Let's take a look at the main nuances.

Ready-made inventory 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. However, if you want to implement inventory software quickly, you can turn to a pre-built option.

We reviewed various software providers and identified the top 5 inventory management software choices. Our assessments take into account aspects such as cost, core and supplementary functionalities, real user feedback, and a conclusive evaluation performed by our team of experts. It's important to note that all ratings are solely determined by our editorial team.

Top-5 off-the-shelf IMS solutions

Ready-made solutionBrief overview


Pricing: Starts at $349 per month Free trial: Demo only Multichannel management: Yes Mobile app: Android


Pricing: $59 to $149 per month; free plan for shipping only Free trial: 15 days Multichannel management: Yes Mobile app: No


Pricing: $89 to $439 per month (billed annually) Free trial: Seven days Multichannel management: Via integration with Shopify Mobile app: Android and iOS


Pricing: $99 to $599 per month (billed annually) Free trial: 14 days Multichannel management: Yes Mobile app: No

Zoho inventory

Pricing: $29 to $249 per month (billed annually) Free trial: 14 days Multichannel management: Yes Mobile app: Android and iOS

Why custom inventory management software

Custom inventory management software development involves creating a system that is tailored to individual logistics business needs. Such software adapts to a company's warehouse procedures , allowing it to track, manage, and optimize inventory levels, purchasing, sales, and storage processes.

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.

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

Steps to Develop Inventory Management Software

Let's take a look at a typical inventory management software development process and the basic steps:

Step 1. 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 how to choose Staff Augmentation vs. Outsourcing considering all pros and cons

Step 2. 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.

Here is an example of an inventory system architecture developed by Cleveroad team.

Example of inventory system architecture

Example of inventory system architecture made by Cleveroad (based on AWS)

Step 3. 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.

Step 4. 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:

  • Programming language: Python (for backend), JavaScript (for frontend).
  • Database: PostgreSQL (SQL) or MongoDB (NoSQL).
  • Framework: Django (Python) or Express.js (Node.js) for backend, React (JavaScript) for frontend.
  • 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.
  • Framework for automated testing: pytest (Python), Jasmine/Karma (JavaScript).
  • 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.

Step 5. 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:

Integrations for inventory software

Type of integrationFunction

Barcode and RFID Systems

Integration with barcode and RFID technologies allows for efficient vehicle and cargo identification, reducing errors and streamlining operations


Integration with other logistics systems: Order management systems, Supply chain management systems, Warehouse Management Systems (WMS), Customer Relationship Management system(CRM), Production Management Systems, Transportation Management Systems, etc.


Choose a system that offers mobile accessibility enabling on-the-go inventory monitoring and management

Safety stock

Calculate and maintain safety stock levels to mitigate unexpected spikes in demand or supply chain disruptions

Forecasting tools

Utilize demand forecasting tools to anticipate inventory needs and prevent overstocking or understocking

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.

Step 6. 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.

Step 7. System deployment

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.

Step 8. Staff training

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.

Step 9. Post-release support

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.

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

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.

SaaS retail platform developed by Cleveroad

SaaS retail platform developed by Cleveroad

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

Frequently Asked Questions
What is inventory in software development?

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.

How is software used in inventory management?

Inventory management software revolutionizes the process by automating data entry, enabling real-time tracking, and forecasting inventory needs. It simplifies order management, offers detailed reporting and analytics, integrates with the supply chain, and ensures accuracy and efficiency through automation, alert systems, and reduced human error. The software optimizes operations, minimizes costs, and empowers data-driven decision-making.

How to make inventory software?

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.

What are the ways of managing inventory?

Inventory management includes key approaches such as real-time tracking, demand forecasting, order automation, enhanced reporting, and cost reduction that ensure effective inventory management. Technology trends, including mobile solutions, data analytics, artificial intelligence, and integration, are playing a key role in the current evolution of inventory systems, improving accuracy and automating processes for more efficient management.

Author avatar...
About author

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

Rate this article!
396 ratings, average: 4.70 out of 5

Give us your impressions about this article

Give us your impressions about this article

Latest articles
Start growing your business with us
By sending this form I confirm that I have read and accept the Privacy Policy