Inventory management is a critical part of the success of any business. When it comes to the apparel industry, having an effective inventory management system is essential. This is because the apparel industry is unique in several ways and requires a specific approach to inventory management. In this article, we will discuss the 10 reasons why the apparel industry needs a robust inventory management system.
Why the Apparel Industry Needs Inventory Management
The cost of retail, logistics retail rental space and other factors inherent to the fashion and apparel industry are going up. Therefore, it is more important than ever to move away from inefficiencies and antiquated systems that eat into your bottom line. An inventory management system will help you to cut costs, save time and increase efficiency.
Here, we will discuss the top reasons why the apparel industry needs inventory management and what you can do about it:
1. To Manage Your Overall Costs
As mentioned above, the cost of retail, logistics and other factors inherent to the fashion and apparel industry is on the rise.
What you can do: An effective inventory management system can help you keep track of your stock, so you can avoid overstocking or understocking, which can lead to wasted inventory and lost profits.
2. To Reduce Your Carrying Cost
The carrying cost of your fashion inventory is the cost of storing your inventory, which can include storage fees, insurance and other costs.
What you can do: By keeping track of your inventory levels, you can ensure that you only have the amount of stock that you need on hand, which can help to reduce your carrying costs. Enterprise resource planning (ERP) software with inventory modules built in or those that are integrated with a warehouse management system (WMS) can automate this process and help you keep track of your inventory levels in real-time.
3. To Better Your Supply Chain Management
In the fashion industry, supply chain management is critical to success. A well-managed supply chain can help you to get your products to market quickly and efficiently, while a poorly managed supply chain can lead to delays and lost profits.
What you can do: Inventory management technology gives fashion retailers a more comprehensive view of their supply chain when it is applied globally. These platforms optimize warehousing and fulfillment operations—giving you real-time tracking, packaging accuracy and better on-time delivery, all of which contribute to supply chain success.
4. To Improve Customer Service
In the age of e-commerce, customers demand fast, free shipping and easy returns. If you can’t provide these services, they will take their business elsewhere.
What you can do: An inventory management system can help you to keep track of your stock levels, so you can ensure that you have the products your customers want in stock and can get them shipped out quickly.
5. To Get Better Sales Channel Management
If you sell your products through multiple channels, it can be difficult to keep track of your inventory levels. This is because each channel has its own stock level, and if you don’t have an effective way to track your inventory, you may end up over-or under-selling products.
What you can do: A good inventory management system will allow you to track your inventory levels across all your sales channels, so you can avoid over-or under-selling products. By integrating your inventory management system with your e-commerce platform, you can automate the process of updating your inventory levels, so you always have accurate information.
6. To Avoid Stock-Outs
A stock-out is when you don’t have the products your customers want in stock. This can lead to lost sales and frustrated customers.
What you can do: An inventory management system can help you to avoid stock-outs by giving you real-time visibility into your inventory levels. By knowing what products you have in stock and when they are running low, you can reorder products before they run out. For instance, you’ll get notifications and alarms when your inventory is getting low with the N41 ERP mobile app, allowing you to reorder products before they run out—avoiding stock-outs and lost sales.
7. To Get Better Forecasting and Reports
If you don’t have accurate data, it can be difficult to make informed decisions about your inventory. This is because you won’t have the information you need to know what products are selling well and which ones aren’t.
What you can do: A good inventory management system will give you the ability to generate reports that can help you to make informed decisions about your inventory, giving you better-planning capabilities. By understanding your sales data, you can make better decisions about what products to stock and how much inventory to keep on hand.
8. To Elevate Communication with Business Partners
A good flow of information helps your inventory process and other business processes, allowing them to work together seamlessly. So, if you are still relying on paper-based exchanges of business documents, you are missing out on a huge opportunity to streamline the purchasing and invoicing process between you and your business partners.
What you can do: Electronic Data Interchange (EDI) allows the computer-to-computer exchange of business documents between business partners. It allows you to share information, such as purchase orders and invoices, with your business partners electronically. A good in-house inventory management system with EDI capabilities allows you to exchange information with your business partners electronically. This will save you time and money by eliminating the need for paper documents.
9. To Scale for Business Growth
As your business grows, you will need to scale your inventory management system to meet the demands of your growing business.
What you can do: A good inventory management system will allow you to scale your system as your business grows. By having a system that is scalable, you can avoid the need to replace your system as your business grows.
10. To Automate Accounting Processes
If you are still using manual accounting processes, you are wasting time and money. Everyone involved is disconnected from the process as well, so it is difficult to ensure accuracy.
What you can do: A good inventory management system will allow you to automate your accounting processes. This will save you time and money by eliminating the need for manual data entry. In addition, it will help to ensure accuracy by eliminating human error.
What Inventory Management Systems are Available for Fashion Companies?
The main inventory management systems that are used in fashion companies are:
- Open-to-buy (OTB): This is a planning system that is used to plan future inventory purchases.
- Warehouse management system (WMS): This is a system that is used to manage the inventory in your warehouse.
- Enterprise resource planning (ERP) system: This is a comprehensive business software solution that includes an inventory management module.
- Material Requirements Planning: This is a manufacturing planning and control system. It is reliant on inventory management modules that show accurate stock quantities of assets and product items received.
Which Inventory Management System Does Your Apparel Business Need?
An organization in the apparel industry must be able to respond and adapt quickly when needed, while always staying agile. An ERP system is uniquely suited to the apparel business in so many ways and checks all the boxes we’ve included in our “10 Reasons Why” list.
Additionally, the platform allows you to manage stock items and assets in one place in real-time, no matter the size of your business, which is what you want.
Other ways it is a good fit for the apparel and fashion industry include:
- Managing end-to-end processes, including inventory management, from design to delivery.
- Planning and managing your finances all in one place.
- Access to global markets with ease.
In a nutshell, an ERP solution is the best way to manage your fashion enterprise and your inventory, which is a part of the total eCommerce fashion and supply chain system.
Let N41 Help You Grow Your Fashion Business
If you’re looking for an innovative way to streamline your fashion business from start to finish, look no further than N41. We offer flexible, scalable ERP solutions created especially for the apparel and fashion industry.
Plus, we’re fashion industry veterans who have seen it all—and we’ve created the perfect software solution to help streamline your processes and take your business to the next level. Our 99% customer retention rate is nothing to sneeze at, either.
If you’re interested in learning more about how N41 can help you grow your fashion business, contact us today for a free demo of our software. You can also call us at (213) 738‐1010 to speak to one of our experts. We’ll be happy to answer any of your questions and show you how our software can take your business to the next level. Inventory management is critical for