Inventory Software Steps That Will Maximize Your Inventory Investment While Reducing Your Expenses

You might not think that your business needs to use inventory software, and maybe this is true if you are in the very beginning stages of running a business.

However, once you were truly up and running you would be doing yourself a terrible disservice if you were not putting in place a good inventory management system that would allow you to maximize the way you were doing things.

When a business first gets started or if it is still quite small the business is going to go through a lot of cash. This is usually the make or break time for a lot of businesses.

If they are unable to use cash the right way then they are not going to survive very long. It is getting tougher and tougher to stay in business if one is not able to have cash on hand when they need it.

Seeing as how you are going to need cash on hand all the time you cannot afford to have cash tied up at all. This is going to happen no matter what you do, but there are some areas where you can prevent such problems.

Inventory would be one of them. Using the right inventory management system is just the first step. Making sure you have the right software in place to run it efficiently is the next step.

Your goal is going to be carrying only as much inventory as needed based on customer demand. You might decide to carry a little bit extra for the purpose of bigger discounts from suppliers or to hedge against fluctuations in customer demand.

In any case the goal is going to be finding that sweet spot. You do not want too much, but you also will not want too little.

When things are done thins way it means you will not have to worry about having cash tied up in inventory. Now why is this important. You want to be able to use this money in other areas of the business.

This is really important for any business that is just getting started and having cash on hand will allow you to be prepared for unexpected things.

Inventory software also allows a business to reduce negative cash flow, because it is going to allow a business to keep down inventories.

At least it will allow a business to keep them right where they need to be. Excess inventories can mean doom for certain business, especially if they are not able to eventually move it.

What inventory software is really all about will surprise you because many businesses fail to understand how logistics software can really benefit their organization long term.

For instance, say you want to set up an inventory management system that is not going to consume a lot of your time right? Well if this is the case you cannot have a system that is overly dependent on other people.

You want to know that any and all information you need to ensure your system is effective can be quickly obtained by you.

Even if you have to rely on others you still want to know what information they will need in order to ensure they bring you back the information you need to input into the software.

Inventory software will help you along in this regard. It is designed to help you answer important questions and make needed changes.

It is made so that you are able to control your inventory the way it needs to be so you keep your costs down. In such a competitive business environment you need this.

The investment you might have to make in logistics software is nothing compared to the long term value you will get by using this program daily.

TL Logistics Management Software is Essential to Cutting Shipping Costs

When companies grow large enough, they typically purchase their own shipping fleet and have a logistics department that manages their shipping process from a variety of vantage points. But for small to midsize companies that don’t have a shipping fleet or an in-house logistics team, carrying out and managing their shipping process means outsourcing their transportation logistics or trying to choose the right shipping options on their own. In most cases, these companies trust a third party logistics (3PL) provider to provide the best TL shipping solutions for their unique distribution needs. However, to save money and have more control over the shipping process, more and more companies are turning to truckload logistics software-also referred to as TL logistics management software. In addition to allowing small to midsize companies to become their own logistics provider, freight logistics software helps them save money with respect to the following areas of the shipping process: freight management, transportation execution and freight payment and audit.

Freight Management

Freight management amounts to managing each means freight distribution, including but not limited to: small parcel, less than truckload (LTL), full truckload (FTL), rail and sea. While large companies employ logistics professionals or construct internal freight councils, small companies typically either outsource freight management or defer to purchasing personnel or shipping or warehouse managers. By implementing TL logistics management software, companies realize more shipping options than they do from outsourcing to a 3PL provider. Because 3PL providers only use carriers that they can make the most money with, your shipping options with 3PL providers are limited to what makes the best sense for 3PL providers and not necessarily for your company.

Transportation Execution

Traditionally, transportation systems are designed for tendering outbound shipments, meaning that they aren’t designed for managing inbound and third party shipments. In addition, parcel carriers have compliance requirements that cause shippers to use a separate system for parcel processing, leading to higher freight costs. Ultimately, shippers have a difficult time keeping their freight from being tendered outside of their original pricing agreements and end up overpaying for freight transportation. To remedy this situation, TL logistics management software allows companies to enforce internal and external compliance throughout the shipping process with regard to the carrier pricing agreement.

Freight Payment and Audit

TL logistics management software allows you to combine your freight payment and pre-audit data, which gives you limitless reporting options concerning your freight spend. With the combined information uploaded to the software application’s dashboard to give you almost real time visibility of your freight spend, you can to monitor freight KPI’s on a daily basis to further control shipping costs as KPI’s change. The freight payment and auditing capabilities of truckload logistics software also allow you to receive more of your freight bills through EDI, which serves to lower your pre-audit costs.

Logistics Planning Software and Freight Shipping

Since the deregulation of the trucking industry in the 1980’s, trucking companies have offered an increasing range of shipping solutions that helps the manufacturer minimize shipping costs; one of which is less than truckload (LTL) shipping. In LTL shipping, companies that ship less than full truckloads of goods can save money by paying a fraction of full load shipping fees. For trucking companies, shipping earnings remain the same. They create a full truckload out of partial load shipments and receive payment from each company. For manufacturers, arriving at the optimal LTL solution usually requires the implementation of logistics planning software, which analyzes the cost of shipping and transportation needs in relation to product destination.

The obvious advantage of LTL shipping is that it allows companies to decrease shipping costs. But the downside is that products often take longer to reach their destination due to the multiple destinations implied by the shared load. In such cases, using logistics planning software to analyze a shipping situation instead of opting for standard LTL is the best way to integrate a solution that brings lower shipping costs while ensuring timely delivery. Whereas as LTL companies specialize in LTL, logistics software specializes in developing solutions that combine each element of the shipping process into a streamlined, cost effective delivery system. A company that requires freight tracking services in addition to simple pick up and delivery would benefit more from using logistics software than relying on the advice of an LTL shipping company.

Most companies that utilize logistics software consistently run a large number of products that are assembled at multiple locations before they arrive at retailers. At first glance, incurring the start up cost and service fees of logistics software might seem contrary to the goal of decreasing operating costs. However, studies show that companies who implement logistics software regularly reduce their shipping costs by ten percent in the first year alone. Exactly how is this savings created? In part, it results form the fact that logistics software eliminates costs associated with other logistical solutions, such as annual software maintenance costs, TMS software costs, 3PL costs, freight margins, gain shares and common rate base licensing costs.

While logistics software is popular among companies whose yearly shipping costs can amount to more than a small company’s annual earnings, it can also offer solutions for smaller companies. For example, a company that simply wants to improve delivery time can use the software to analyze road construction trends and highways traffic patterns. In either case, the software never fails to improve a manufacturer’s finances by making its system of delivery markedly more efficient.