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How to Select an Inventory Control System
Shopping for an inventory control
system? It's a big decision. A good computer inventory control system
is a major investment—and not just in dollars and time. When
you buy a computer system, you are acquiring a partner with whom
you will work day in, day out, a tool which will shape just about
every aspect of running your store. In this document, we try to
offer some useful advice on how to go about choosing the right system
for you and your business.
Prepared by Anthology Inc.
Your partner for Inventory Control / Point-of-Sale
10850 Traverse Highway, Suite 40
Traverse City, MI 49684
Sales: 800-392-1726
General: 231-933-0093
Fax: 231-933-0091
sales@anthology.com
www.anthology.com
Copyright Anthology Inc. 2002
Here's what a good inventory control system, properly installed
and implemented, can bring to your company:
Enhanced productivity
A good CICS (computer inventory control system) should help you
work faster and smarter. Sales should be smoother and more efficient
at the cash register; and purchasing should become not just easier
and less time consuming, but also smarter. Repetitive tasks and
duplicate data entry are eliminated, and customer inquiries can
now be answered with something other than "Ask [your name here]."
Better decision
information
Your computerized inventory control system should pay for itself
in increased productivity. But the real payoff comes in the better
information it provides you. With good, fast searches, your employees
should have the information they need to respond to customer inquiries
of every kind. The information in depth you need should be provided
by on-screen displays and customizable reports, allowing you to
evaluate and monitor your inventory (its stock status, wholesale
value, and sales and other history), your vendors (their open and
historical POs, invoices, and overstock returns), your customers
(their orders, current and completed), and every other aspect of
your business.
Improved cash flow
Cash management is essential for any business. A good computerized
inventory control system helps you use your valuable cash wisely.
Just in time ordering, especially when done through electronic ordering,
maximizes your buying power; and letting your system manage overstock
returns will free up cash for additional purchases. The accurate
cost of goods sold calculations that only a computer system can
make will help you to determine which sections of your inventory
are profitable and should be expanded, and which can be reduced
or eliminated.
Accurate information
Whenever the same information is recorded more than once, the chance
of errors and unbalanced entries increases enormously. What's more,
anyone who has used a manual system knows how much time is taken
up with recording information about sales, purchases and customers.
In a good computerized inventory control system, information is
gathered in the normal course of operations only once and then used
throughout the system.
Improved human development
There are certain things people hate to do that computers do very
well, like figuring out what items for a particular vendor need
restocking, calculating sales tax for the month, and summarizing
or preparing reports. Using an CICS contributes to employee effectiveness
by allowing them to spend time helping customers and completing
assignments rather than doing the mundane work that computers are
designed to do.
More control
A computerized inventory control system can provide the real-time
information you need to manage and control your business. Monitoring
the effectiveness of departments and individuals on a detailed and
continuous basis, you can predict what will happen to your business
in time to take advantage of positive trends and to correct negative
ones. A robust security system allows you to control who is allowed
to do what in the store.
1. Not doing their
homework
You're already a step ahead of most people because you're reading
this. Most people don't have their objectives in hand before they
buy.
2. Misunderstanding
the benefits of automation
Computers do not replace intelligence, judgment, hard work or productive
employees.
3. Comparing on
price alone
While the price of different inventory control solutions and your
budget are certainly important, don't make the mistake of making
price the deciding factor in your decision. A system that doesn't
do the job for you will be no bargain, however little it may cost.
4. Losing sight
of the big picture
Stay focused on your overall objectives and needs in implementing
an inventory control solution. Losing sight of the big picture can
result in the wrong choice. Be sure to take account of your future
needs as well as your current ones.
Selecting an inventory control system is an important decision.
Before you start comparing lists of features, make sure you are
clear on your needs and objectives, and that you have the right
process for making your decision.
1. Involve the
right people
Your inventory control software generates information that many
people in your organization use. Be sure to include the system's
future users and managers in the process of defining your needs.
2. Define your objectives
People who buy inventory control software usually spend most of
their time evaluating the software's features. That makes sense.
After all, you're going to make a sizable investment and you want
to know what you are buying. But the fact is, your first task should
be to evaluate your own business and its needs, present and future.
The more you know about the problems you expect the software to
solve, the better informed your choice will be. Do you plan to sell
on the Web or through the mail? Will you be ordering primarily from
one vendor, or many? A clear vision of what you want to accomplish
is essential.
3. Shop for software
Some people begin by selecting their computer hardware and then
look for software to run on it. Instead, you should wait until you
have selected a particular system; then let the system vendor either
provide the necessary hardware or tell you what hardware you should
acquire. Otherwise, you may end up with computer equipment that
is incompatible or without enough capacity.
4. Pay attention
to architecture
When choosing a system, pay attention to its overall design and
architecture. In order to make the most out of your investment in
an inventory control solution, select one that can run in a standard
operating system like Microsoft Windows 95 / 98 / 2000 or NT. With
other operating systems, you often must dedicate your computers
solely to inventory control or have a greatly limited choice of
word processing and other software. Moreover, if you buy into a
proprietary or non-standard architecture, you must often lock yourself
into an expensive support contract or hire specialists to do even
simple maintenance.
5. Look at the big
picture
When evaluating a program, of course features are important. But
before you start checking off feature lists, look at the overall
characteristics of the program you are considering. Here are a few
key components:
- Speed and performance
With a fast system, people spend time working. With a slow system,
people spend time waiting. Make sure the system you are considering
is responsive and agile.
- Capacity
Does the system place limits on the maximum number of inventory
items, customers or vendors that are allowed? How many line items
can be on a single sale, purchase order or invoice?
- Reporting capabilities
A rich suite of reports should allow you to measure every aspect
of your business's performance and situation. But a good system
should provide much more than that. No set of pre-defined reports,
however complete, can give you all the answers you need. Does
the system you are considering let you create customized reports?
Is the process daunting, or simple and intuitive? Printing out
reports can be time-consuming and wasteful. A well-designed system
will allow you to display crucial metrics in real time on screen,
so that you can answer your questions quickly and easily, without
having to generate a stack of paper.
- Plays well with others
In this connected world, it is essential that the system you use
is able to communicate with other programs, computers, and systems.
Importing data from other programs, or exporting your data to
a web site or customer can be essential. For example, many business
people use spreadsheets for sales and expense analysis, forecasting,
and "what if" modeling. If your program lets you import
and export information in either database or ASCII format, you
will be able to move data to and from a wide variety of other
programs. If your program stores its information in an industry-standard
format like .dbf that other programs like Microsoft Excel or Access
can read directly, so much the better.
- Interface and ease of data
input
You want a system that lets you input information quickly and
efficiently. The Windows interface has become a de facto standard
in the world of business software. If a program follows the standard
Windows conventions in its layout, shortcut keys, etc., your employees
will find it easier to learn and use. At the same time, Windows'
mouse orientation can be a problem, especially at the cash register,
where space can be scarce and both hands needed for data input.
Can you easily perform crucial operations like making a sale without
using the mouse if necessary? If the operator must constantly
switch between the keyboard and mouse, it can easily take twice
as much time for data entry.
- Data validation
Mistakes will be made, especially when doing data entry. A good
program will help prevent mistakes from getting into your system.
The program should test for errors such as duplicate inventory
and customers, incorrect ISBN or SKU numbers, and unreasonable
amounts and dates. A good system notifies the user of problems
as they occur.
- Multi-user support
The ability to handle true multi-user situations in real time
at the record level is essential for an inventory control system.
- Documentation
The quantity and quality of documentation is an excellent guide
to the quality of the software. Software companies that have a
long-term commitment to their users will develop and provide outstanding
6. Get specific
Every inventory control system on the market has a wealth of features,
some of which may be unimportant to you and others essential. Use
the checklist at the end of this brochure to get an overview of
some of what a first-class system will provide you in the way of
functionality, and evaluate any system you may be considering in
terms of what it provides.
7. Get a demo
Brochures and multi-media CDs are great, but nothing can compare
with a full-featured demonstration copy of a program to let you
get a real feel for the real experience of working with a piece
of software. Try before you buy.
8. Choose the company
you keep
When you choose an inventory control system, you are entering into
a long-term business relation with your system vendor. It's important
to ask a few questions.
- How long have they been
in business and how many users are there of the system?
A company with a history and a large user base is more likely
to be around for the long run.
- How often do they issue
updates? Good
software companies update their software frequently and make bug
fixes and new features available to customers. Before you make
a purchase, find out if the software vendor has a maintenance
program in place that gives you access to frequent upgrades.
- Contact some current users
of the system and ask about their experience.
Are the technical support people helpful and capable? Is the company
responsive to user requests and suggestions?
- Are these people you feel
comfortable with?
Trust your instincts.
- Is there an upgrade path?
A good company invests in developing new product features and
enhancements regularly. They stay abreast of technologies and
make sure their customers do too. Software is one of the few industries
where you can upgrade your product to the newest, hottest version
for a fraction of the full price. A good software company will
provide frequent upgrades at reasonable prices or as part of the
maintenance agreement.
- How is technical support
delivered? At some point,
you will need technical support. Find out if the vendor takes
calls immediately (a fast solution) or uses a callback system
(a slower solution). Ask what you can expect in callback turn-around
times, how many employees are on the support team, and how experienced
they are. There are few things more frustrating than discovering
that you know more than the tech support person you are talking
to about the program.
9. Implement the
new system
If you've done your homework, this portion of the process is exciting.
The new system will deliver information about your business that
will give you all kinds of new ideas. You may experience some frustration
while the kinks work themselves out, but the results will be worth
waiting for. Here are some tips for a smooth implementation. Take
a close look at your software vendor and make sure they provide:
Data
Inputting the data about your business is critical to the accuracy
of the reports and sales analysis you will perform in the future.
Your data is one of your most important assets and deserves your
careful attention.
If you already have a computerized
database of some kind, most software vendors can convert the file
for you. If you are starting from scratch, you may be able to get
files from your vendors for your initial inventory purchases, which
your software can likewise convert for you.
If other hand you have only
a card file or no data at all, you will need to input your inventory
information into the software. Most companies have utilities and
handheld data collectors to make this easy.
Take some time to think about
how you would like to organize your inventory database. This will
become important later on for reporting purposes and for taking
full advantage of the information you gather about your inventory
and customers. As they say, garbage in, garbage out.
Training
Find out what options are available for training from the software
vendor. Allow ample time to train yourself and your staff prior
to using the system live in your store. The more you learn about
the software, the more productive you will become and the more benefits
you will realize from computerizing.
Timing
Coordinate the ordering, delivery, setup, training, and implementation
with your staff and software and hardware vendors. Develop a workable
schedule to bring your store on-line, while allowing ample time
for training and data entry.
Ongoing learning
Don't stop once you have implemented the system in your store. Continue
to look for ways your investment in a computerized inventory control
solution can benefit and make your business grow. These include:
- Print documents and help system documentation
- On-site and on-line training
- Support, newsgroups and other resources
on your systems vendor's website
- User group meetings at shows and conventions
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