Warehouse Management System Benefits

Warehouse Management System Benefits

To begin with, from suppliers and manufacturers to retailers or customers, implementing a warehouse management system (WMS) allows an organization to optimize all the warehousing activities, minimizing labor expenses, and improves inventory accuracy.

And one wrong step towards warehouse management can lead to workplace accidents & major loss of efficiency. Which we will discuss in this article later.

Let us first understand why automating Warehouse Management is important and when should one be planning to go for WMS.

Why and When should you plan on implementing a warehouse management system (WMS)?

WMS systems are meant to automate and implement tracking in a day to day activities of a warehouse. Locating a particular item within the warehouse can be challenging for a large warehouse with multiple staff members. WMS solves that pain. It is much more beyond that. WMS is capable of monitoring product quantities, cycle counting, picking, packing, shipping and managing multiple locations.

Following are the indicators to implement WMS:

  • You have multiple warehouses
  • You fail to dispatch orders within specified SLA
  • It’s difficult to track your shipments and returns
  • You find it extremely time-consuming to search for a product in the warehouse
  • You process more 30-40 orders a day
  • There is more than one employee doing the picking and packing job

WMS implementations are usually time-consuming and require substantial efforts. Please be assured to have a dedicated internal team to manage the transition process.

So what if you are not ready for such commitments? What system to operate on if not WMS? You can opt for another similar category of software called Inventory Management Solution (lMS). Let us first understand the difference between WMS and IMS.

Difference between inventory management system and warehouse management system (WMS):

Inventory Management is one part of warehouse operations.  To manage inventory on a large scale, WMS platforms are deployed. WMS is usually, more complex to set up as compared to managing inventory through IMS (Inventory Management System).

IMS involves tracking the count of an individual product whereas, WMS involves tracking the product space along with the shelf and bins. It helps you manage warehouse space more effectively.

Unlike an IMS, what makes WMS a larger part is, its connectivity to the overall management systems involving, products supply, sales, distribution, and quality management.

Both inventory and warehouse management systems enable companies to use bar-coding devices to track, bill and update the inventory. It also provides with picking, packing, and shipping information for delivery, managing multiple locations, and perform cycle counts.

Benefits of Warehouse Management System

The WMS system integrates the workers, task handling types of equipment, storage tracker onto a single programmed software called as WMS. It helps avoid manual errors by working on system directed operations of receiving, putaway, picking, and shipping. Some of the major benefits are below:

  • 100% Inventory tracking

Systematic tracking of inward, outward and movement of stock within the warehouse will ensure complete accuracy and avoid any shrinkage. Item level barcoding enables the complete history of a particular item in case a product is RTO and gets re-shipped etc

  • Detailed Quality Control at Receiving

The system facilitates detailed QC process at the time of receiving to ensure only the correct product gets inwarded into saleable inventory. Rest gets tracked as rejected and can be later returned to vendor etc. This ensures a high level of customer service and major costs savings in case of miss-shipments by the vendors.

  • Save space and maximize space utilization in the warehouse

With handling your inventory in the right way, you will be able to effectively minimize overstocking and under-stocking of products. In other words, it enables accurate stocking, slotting and pulling orders.

The system guides an operator on where to put an item, maximizing utilization of each slot by selecting a storage path that best fits the product.

  • Increased productivity in the warehouse

The employees get to know the exact location of the product’s shelf. This reduces the time and risk of stretching the period. The staff gets to pick more orders in less time, increasing efficiency in the order fulfillment process.

  • Accurate Inventory planning

Get insight into most popular products during a specific time period. This will help you decide which products to invest in at that time.

  • Keep a check on received products

Keep a record of received products and ordered products handy with GRN report in order to avoid paying extra to the supplier. It ensures all the delivered items are correctly recorded.

  • Increases customer satisfaction

Ensures prompt and accurate product delivery. This helps in reduction of customer complaints and an increase in on time delivery.

  • Improved Security

Unfortunately, there are employees who try to steal or unintentionally damage the products. A WMS system helps you keep accurate records of inventory, providing you with user-specified logins so that, managers can ensure the staffs are not slipping extra products on delivery.

  • Strong reporting

WMS captures various data points in terms of timestamp and user credentials. This data comes in handy when running critical reports like Inventory aging, restock calculations, SLA deviations in fulfillment, etc.

  • Perishable products friendly model

The WMS system also supports FIFO, giving flexibility to the managers of running their warehouse.  FIFO model ensures expiring and perishable items are picked first.

Let us now see how a non-WMS enabled system can differ from a WMS enabled warehouse,

Non-WMS enabled warehouse Vs WMS enabled warehouse

If you implement a warehouse management system in your warehouse, you will come across a lot of changes in your daily activities and the profit margins.

What issues can a wms system resolve?

Issue 1. While the inbound process takes place, a lot of unfinished tasks remain until the end of the day. This results in a double shift for the employees. With no proper serial no. and shelf assigned, it gets difficult to locate a product in the warehouse.

Solution:  With a WMS enabled system, you receive, Proper documentation from the supplier along with the estimated time of delivery.

–          The incoming products will then be auto-recorded with their bar-coding, serial no. and shelf through which it will make it easier to identify a product and its location.

–          With this, labor productivity will increase and it will not take much of their time to locate any product in the warehouse.

Issue 2. Normally a non-wms system doesn’t prioritize the shipments because of which few customers might have to deal with late deliveries and this will result in a dissatisfied customer.

Solution: A WMS enabled system will priorities your orders accordingly and will prompt you on the deliveries exceeding the delivery time.

Issue 3. You might sometimes receive an update or sometimes even not receive an update on missing goods or incorrect count, and damaged products.

Solution: This issue can be resolved by monitoring the performance of employees, by introducing the RFID or barcode readers and allotting an individual for the task who cannot process any movements without any confirmation from the managers.

The benefits can go on. Comment below with your issues with managing your warehouse and we will surely get back to you with our possible solution.


Choosing the right warehouse management system can add up efficiency and accuracy to the process by improving and maximizing the speed of every stage of fulfillment. It can help you improve sales and increase profitability with on-time deliveries, resulting in happy customers

Vendor Managed Inventory (VMI) – Process / Mistake / Solution

Vendor Managed Inventory (VMI) – Best Tricks to be Successful

Does your company believe in working with a smart approach and avoid incurring a loss? If yes, then VMI (Vendor Managed Inventory) is one of the processes you can rely on. It is a type of b2b business strategy between retail stores and vendors that helps you save on working capital as well as remove the headache of holding inventory in your books.

Let us understand in detail what VMI process is:

In a traditional setup for a retail store, usually the store owner buys inventory on their own and replenish the products based on their sales. However, in VMI setup, the vendors keep track on retailers inventory by making a visit to their store or pulling reports from retailers systems, checks the sold/unsold products and fills the space allocated accordingly. Merchandising decisions are made based on consultation with the retail store teams.

The vendor here holds the responsibility of managing inventory plans and generating the purchase order for replenishment. Of course, the retail store has to approve the replenishment orders since it’s their display space being utilized. Therefore the term – vendor managed inventory. The biggest point to note is that the ownership of the inventory remains with the vendors.

The goal of setting up Vendor Managed Inventory (from retail stores perspective) operations is to,

  • Reduce inventory levels at retail stores
  •  Avoid stock out situation
  •  Improve inventory turnover
  • Improve customer service
  • Reduce inventory holding costs at the retail store’s balance sheet

The Vendor Managed Inventory enables a vendor to manage lead time for supplying goods in retail stores. Which, in turn, can help storekeepers to reduce their inventory level and stock out situations. As a result, it will help them avoid keeping excess inventory for backup.

Since the vendor pushes the inventory in batches to the retailer’s store based on customer’s demand, it will help them to inward the exact amount of stock required. With this, the inventory turnover improves along with customer’s service.

However retail stores need to monitor the entire inventory flows into their stores to avoid inventory dumping by the vendors. Ultimately every inch of the retail storefront is precious and should be used to promote products that actually sell vs. having stagnated inventory.

But what if you are already meeting the above goals without using VMI?

So let me throw some light on what actually the process is and how can it improve the workflow with improved profitability.

Traditional retail store operations involve many aspects like,

  • Dealing with suppliers and shipment process that helps them having products in the store,
  • Inventory management,
  • Staff management,
  • Store arrangements,
  • Billing and money handling,
  • Ensuring good customer service,
  • Store display to attract customers, plus, a lot more.

It requires a lot of work to be done on the retailer’s side. However, part of their workload can be pushed to suppliers by implementing VMI.

Vendor Managed Inventory as a solution

Vendor Managed Inventory is a solution towards improving the supply chain processes at both retailers’ and vendors’ end. As the supplier here monitors the inventory level of stores and keeps them stocked up with the right SKUs. Payment terms will need to be agreed upon according to mutual understanding. So, the store owners will not require to manage their own supply and inventory management process. This here is taken care of by the suppliers.

But why would a supplier want to help the retailer to stock up their inventory? What benefit does the supplier get by helping the retail stores? Below we discuss the benefits that vendors get by implementing VMI processes with their wholesale clients.

Benefits of Vendor Managed Inventory

Benefits of VMI for Brands or Suppliers

  • Inventory Transparency :

With VMI, being a supplier, having access to retailers inventory will help you understand the demand for your products. With a frequent visit to the store or real-time access to the retailer’s inventory levels, you get to know which products are selling fast and which are not. This, as a result, will provide you with transparency towards the inventory, helping you avoid a sudden surge in the sale as per the demand scenarios.

  • Better space utilization in the supplier’s warehouse:

With knowing the demand for a particular product, you produce or fill in space with fast selling products. You get to know how often the products are being sold. As a result, you avoid keeping dead stocks, reduce production charges and control inventory with more flexibility.

  • Cost cutting with space management:

With VMI, you can push your inventory to the customer’s location which they can store for months at zero cost. Since your customers always have a steady flow of the supplies, they would rarely be in any stock out situation.

Benefits of VMI for retail stores

  • Avoid stockout situation:

Using VMI as a service is like a supplier taking on responsibilities of your inventory levels, keeping all the products stocked up on a timely basis. Without VMI, retailers will always have to be aware of reorder points to place a purchase order and miss on their deliveries.

  • Better time and work management:

In retailing, along with daily business work, it also includes managing inventory, noting down the reorder points, creating purchase orders for replenishment and so on. Using VMI, these tasks can be excluded, allowing you to focus on other productive business needs like online channel management, introducing new products or coming up with new marketing tricks.

  • Eliminate stock out losses:

VMI opens up the path for suppliers into customers inventory and diminishes the uncertainty involved with the inventory status. There will be no last-minute orders since the supplier has the ability to restock the customer’s inventory without any interruptions. But retailers should not blindly depend on suppliers and must deploy a monitoring mechanism on inventory thresholds.

Tricks to make VMI setup more effective:

Short term – long term goals / expectations:

The parties should share their expectations clearly with the other party. The supplier mostly suffers in this case with high expectations in the short term. They need to understand that the flow of production will start improving over time.

Agreement of sharing stock information on time:

If the supplier and customer agree on updating their stock details to each other on time, then there would always be a strong business flow between two parties. Especially there should be a scheduled forecast from the customer side.

Effective communication between two parties:

Effective communication and information sharing are necessary to work on the goals set by supplier and customer. They will need to look after every failed goal and understand the problems to avoid repeating them in the future. As failure help business to succeed fearlessly.

Common Mistakes made in VMI

–   Sometimes the customer (retailer) applies for new deals /promotions in the shop and supplier finds a sudden spike in demand. This, as a result, can be a problem on the supplier’s side to manage shipments.

–   When the customer doesn’t inform the supplier of the changes applied to his end (like the discount/promotions), the supplier cannot help customers with their unexpected demand.

–   Not informing other customers when there is a high product demand from one customer’s end. Here, the suppliers need to maintain flexibility between their customers in order to adjust demands in a more flexible way.

Disadvantages of Vendor Managed Inventory

–   The retail stores here need to have a deep trust in supplier/vendor since they share a part of their business responsibilities with them.

–   If the vendor is not able to fulfill customers demand or handle the responsibility, it would be a loss on customers end facing frequent stock-out situation.

How to start with Vendor Managed Inventory

If you are new to vendor managed inventory and probably thinking of starting up with the process and want to understand how can you work with it, then below example can give you an approach towards it.

In the below diagram, you will see, the vendor produces the products and distributes among the retailers equally. Once the sale is made, he compares the demand for products in each retail store. He notices the Product A and B made a better sale as compared to C. Vendor then does the Inventory Forecast and gets the count for the next production and distribution among the retailers.

vendor managed inventory

The above example is based on small scale production data. Imagine distributing 100 product types having more than 1000 count each among 50 retailers and manually comparing and managing excel sheet for each. Quite tortuous isn’t it? To make this process simpler, there is a vendor managed inventory feature offered by companies delivering products and introducing growth strategies for retailing/manufacturing/e-commerce businesses.  

One such company is EasyEcom which provides an omnichannel workflow experience for brands involved in manufacturing / retailing / eCommerce business across the globe. Few of its key features involve,

Let us now see, what features does EasyEcom has for you to manage processes involve with VMI along with screenshots:

  • Vendor Master section: This feature can be used by retailers to handle their vendor’s list and their activities.
vednor master

  • Customer Master: Here, the vendors can manage their customers and order quantities to be sent. Also, how many orders received from the retail stores.
customer master (VMI)

  • Product Master: Where the vendors and retail stores can manage their available products and manage their details.

  • Inventory Forecasting: The inventory forecasting feature will show you the sold inventory and available inventory count, based on which, it recommends the order quantity for each product.

Let us know if they are missing out on any features in our comment section below.


Planning for VMI relationship involves both sides working together. Information sharing is key to a good VMI flow. The retailers here don’t have to share every detail of their inventory. However, the supplier should be aware of any seasonal or promotional changes made in the store.

Consignment Inventory Management – Expert Tips and Tricks

How Consignment Inventory Model be made Profitable

Consignment inventory (CI) is a model wherein the product ownership is with the vendor until the product is sold by the retailer (consignee). The retailer does not own the inventory at its locations, inventory is owned by the vendor itself. Additionally, unsold products can be returned to the vendor.

Consignment inventory flow

For e.g. a new bag brand breaks into the market and is totally unknown. Since they are new, no retailer would like to risk their capital by purchasing their stock upfront. Instead, if the brand plans on offering the bags on consignment, the retailers might agree to stock the bags in their store and pay once the stock is sold. This creates a win-win situation for everyone. Such a model is useful for even established brands as retailers try to minimize their working capital.

The consignment inventory model works well in the following scenarios:

  • New brands breaking into the market
  • Existing brands Introducing a new product line
  • An existing brand trying to expand into newer markets
  • Expensive goods that retailers wouldn’t want to invest upfront in

But consignment business isn’t that straightforward. There are factors that both parties must consider before getting into the consignment contract.

Important factors to consider before starting with consignment business

It might sound a lot easier to handle the goods on consignment from both sides. However – remember there is no free lunch ever. Let me explain the complications involved and things to remember. Following are the points you need to take care of before getting into this business:

  • The time span of holding the inventory for sale
  • Payment terms for goods sold
  • Who will be responsible for products security when stored in the retailer’s location?
  • Who should be responsible for shipping charges for returns of unsold products?
  • Who should be responsible for products damage?
  • Commission structure or margins to be shared with each party

This can sometimes carry major risks for both parties. Let us look at the pros and cons of consignment arrangement:

Pros and Con of Consignment Inventory

Pros for Vendors

–         A supplier can invest money for long term on the stock if a retailer is not ready for the same and assign it as consigned inventory.

–       Entering the market gets easier, as consignment inventory allow vendors to hold the ownership of inventory and can contact multiple retailers to carry their inventory in the market.

–        Inventory carrying cost can be reduced, as the vendor here can transfer the stock to retailers shop which will result in reducing their own holding charges.

–      Can save on labor charges and shipments, where the vendors can get the stocks delivered directly to retailers instead of shipping it to their own warehouse.

Cons for vendors

–        Inventory holding charges, the vendors here have to invest their money in shipment and carrying charges for the inventory with which they are not sure of making any profits.

–          Bear damaged and unsold inventory charges, the vendor has to bear the charges for damaged and unsold goods even if the stock is under the retailer’s supervision.

–            Fluctuating cash flow, the vendors here normally receive their payment after their products are sold. Unsold products are normally returned back to vendors.

Pros for Retailers

–          Reduced carrying cost, the retailers here can have the inventory without having the stocks in possession. This reduces their holding charge.

–          Cashflow flexibility, the retailers only pay their vendors once the products are sold. They can always hold as much consignment inventories without worrying about the stockouts or buying more stocks.

–          Low risk, as the retailers do not have to pay for the stocks upfront, this allows them to lower their risk of carrying new supplier brands and use their capital in selling more valuable products.

–          Never go out of stock, as the vendor keeps a check on the retailer’s store. If the products go sold out, they bring in new stocks. This reduces the workload on the retailers part to keep track of inventory levels and plan replenishment.

Cons for retailers

–          Reduces the floor usage, if the consigned inventory is not sold for a longer period, it eats up the floor space which could be used to store other fast selling stocks.

–         Inappropriate management between consigned and other inventory, as some retailers might manage their consigned inventory and other inventories separately. This creates confusion between the stocks and may eventually result in errors and inventory loss.

–       Stock ownership is held with suppliers: Since the stock ownership is with the vendor, they can always plan on taking back the inventory from their store. Additionally, there is a dependency on the vendor to do the replacements. Hence the retailer has very less control and might face out of stock situations for fast moving goods.

With positives and negatives involved with both the vendors and retailers business, we will later discuss how can this business be made profitable for both the parties. But, before that, I want you to understand a closely relatable term with consignment called as – SOR (Sale or return).

SOR or Consignment (What do you prefer?)

SOR (sale or return) and consignment model is almost the same. The difference is just with the ownership of goods after the products are shipped from vendors location to the retailer.

In SOR, the ownership gets transferred to the retailer whereas, in the consignment model, the ownership remains with the supplier (vendor) until the goods are sold.

During an agreement between the two parties in the SOR model, a time period is mentioned to make the sale. If the retailer fails to sell the given products at an agreed upon time span, the products are then returned to the supplier. Depending on the stickiness of the product, it can be good or bad for both parties.

Read this article by Clare on The truth about Sale Or Return which will make you think twice before going for SOR / Consignment business.

Factors making consignment Inventory business model profitable

It is always great to learn the tricks that can be used to develop a profitable business. Check the below strategies that a vendor or retailer can follow to get rid of financial issues and develop plans to grow the business.

Prepare a strategic plan with 3-6 months goal:

Normally, few consignment agreements have an effective period of time and some others don’t. After the agreed-upon period is over, the unsold goods can be returned back to the vendor. This period can be extended with mutual understanding between the two.

With businesses taking time to build their trust among customers, both the parties can apply their plan and marketing strategy to grow over time.

Once the sales start to happen, the process will get complex and the production will increase. With a growing business, both the parties also need to plan their financial strategies, profit sharing and commission percentage. Which means the strategy does not only involve the money making process but also the marketing, profit generation, and the capital investment. Being a retailer or vendor you must constantly be reviewing the plans. That way you will be able to achieve your goals within time.

Identify factors affecting profitability

While working together, vendors and retailers get to know each other and develop an honest relationship with each other. Their supply chain relationship also gets stronger with time as the processes get more streamlined and systems get aligned. The vendor here gets a trusted retailer, selling the consignment inventory efficiently and the retailer gets a supplier who can maintain the inventory on time with a proper quality process in place.

Vendor and retailer need to have an integrated system in place for the consignment business to be successful. That provides visibility of sales run rate of various products and also visibility into damaged/lost inventory reports.

Identifying non-moving inventory

These type of products often eats up money time and space. There needs to be a plan and data sharing between the parties to find such items and they must be dealt with urgency. Nothing hurts more in retail than the dead inventory at stores. Removing stuck inventory and replacing with faster moving goods will enable faster turnover and hence more money for both parties.

Special consideration has to be given for items with a limited shelf life. Deadstock for SKUs having an expiry date coming up need to be cleared on priority. Hence special promotions or price discounts must be offered in consultation with the vendor in order to clear such items.

Consignment model friendly application

Supply chain management relationship between the vendors and retailers in consignment inventory business is not possible to manage with excel sheets/manual entries with a pen and book or on normal inventory managing software.

One has to opt for software having consignment inventory as a feature where:

  • Consigner is able to track the consignee’s inventory
  • Consigner must have near real-time sales visibility in order to plan replenishments to avoid stock outs
  • Any surge in sales activity for certain SKUs must generate an auto alert for both parties
  • Consigner should be timely updated on what goods need to be shipped
  • Consigner should be able to track the shipped stock to the consignee
  • Consigner should be able to track the shipped stock to the consignee
  • These process can be made simpler and quicker with an integrated platform.

How your consignment inventory management workflow can be simplified?

Let us hear it from Jack about his experience with EasyEcom to manage his consignment business,

Using robust software like EasyEcom to manage your consignment inventory model will help you maintain a profitable business in the long run. It will help both retailers and vendors to have transparency in business. Check the EasyEcom platform below to manage your consignments.

1. Manage multiple customers from a single window:

Being a vendor, you will have to deal with multiple customers from different locations, selling multiple goods. So go ahead and add as many customers under your business and deal with each of them your own way.

2. Create a returnable gate pass to keep track of consignment inventory sent to various parties

If your goods remain unsold for long, you can always provide an option to your customers to return or transfer and do the in-house adjustments.

3. Create passes as per return request

Once you create an adjustment there will be a gate pass created against every selection. This pass can be used as an entry or exit for the selected products.

Find a returnable/consignment gate pass created below.

4. Upload sales and create invoice against a gate-pass:

Once the gate pass is created, the consignee can upload the sales made against that particular gate pass. The consigner can then create and send the invoice against the same gate pass number. This process can be carried on monthly, weekly or any customized interval basis.


Now that you know about consignment inventory model, you can plan your retail business in a comprehensive way. An integrated platform will surely enable the proper planning and hence profitability in the long run. Staying systematic and having proper trackers in place will enable transparency which is a must in a consignment business model.

Best PO Management Software – Magento/Shopify/Amazon FBA

Magento, Shopify, Amazon with best
Purchase order Software

When retail was offline, once a month or quarter purchasing worked. Customers would walk into the stores and buy whatever is available. eCommerce is exactly the opposite in nature. Customers come to your site expecting a certain item to be available. If they don’t find it, It’s not only the loss of business for you, it’s a reputation that the customer carries about your brand.

Managing purchasing has become extremely critical now. Without an efficient process in place, you cannot grow your brand. Amazon has now set a benchmark for companies to manage their supply chain with utmost priority. While the excess stock is going to kill your working capital account, out of stock upsets the customer like none other.

The main challenge with eCommerce business is the necessity of having the right products available at the right time and in the right quantity.

Let us see how inefficient management of purchase order system can affect your sales, ranking on e-commerce websites and more. Let us see how:

Challenges with Purchase Order Management for Amazon and Magento /Shopify powered eCommerce brand portals –

1. Sales momentum loss due to out of stock on Amazon, eBay etc:

Portals like Amazon favor brands or sellers who have inventory available whenever a customer wants to buy. Like I said above, otherwise, it leaves a bad taste in the mouth for the customer. Hence its very important for eCommerce managers to keep track of products with fast sell-through rate. Obviously equally important is to track products that don’t sell well and end up being dead stock. Without any detailed reporting of fast-moving products, you will always end up ordering at whim.

Tip: Consider using an inventory system that auto-suggests how and when to place orders with vendors. It must take into account previous sell-through rate and be able to predict ahead.

2. Losing rank as a seller:

eCommerce is all about consistently delivering quality items within the given timeframe. A happy customer is a customer for life. Hence if you go out of stock for a few products on Amazon and don’t replenish in time, it will hamper your seller account rating adversely. Not having an idea about when to order particular product results in losing your ranking on marketplace platforms like Amazon, eBay, Flipkart etc. Very simply Amazon pushes such sellers down in the ranking algorithm.

Like the above screenshot shows the  Amazon sales rank of a product. There were 6 units sold in the first week, and then there was a sudden drop in the sale. With a drop in the sale, Amazon sales rank also drops slowly. (Source)

Tip: Look out for a PO system which can notify you on reaching reorder point of a particular product. Additionally, the system should be able to calculate the time taken for the delivery to reach your warehouse and factor that in the algorithm.

3. Limited storage for brands in Amazon FBA Warehouses:

FBA provides limited storage for brands and having stocked it up with slow-moving products will result in less space for fast-moving products. That might result in a stock out-situation for your must-have products. Again it will adversely affect your overall business. On top of that Amazon storage fees are usually very high as they only store items that move.

Tip: You may consider having a secondary storage warehouse beside FBA. That way you keep the FBA location available for whatever stock is selling fast. Secondary locations are usually cheaper, hence end up saving quite a bit on the storage costs levied by FBA.

4. Unable to track products en-route delivery:

There are circumstances due to which the delivery might be delayed. This can be either due to national holidays/adverse weather conditions/human error. Tracking that is important and accordingly must take actions to manage inventory at the warehouse.

Tip: Consider using a system which can help you keep a track of your delivery partners or reach out to delivery services to check the issue and keep customers updated with the updates.

5. Not staying updated with the expiry date of perishable products:

Dealing with perishable products is tricky for any business from an inventory management perspective. These short-lived items require express delivery. For example, food items, medication, cosmetics or anything else that has a short expiration date, requires special consideration while ordering inventory and shipping to customers.

You must keep track of the expiry date and use FEFO (first expiry first out) method to ship out. Any items that are about to expire can be put on special sale. Lastly must have a liquidation strategy in place for items that are at the end of their shelf life.

Tip: There are expiry date trackers wherein you can be notified of the products reaching their shelf life. Consider updating it in the tracker along with the product while inwarding.

6. Failure to track stock levels at Freight Forwarder or any interim storage:

If you are importing goods from China / India or any other country, you must have a view of what stock is lying with the freight forwarder. Otherwise, you end up ordering more. That stock must be tracked and handled on a need basis. Freight forward might be able to also do inspection and QC on your behalf. Hence very important to have detailed inventory management there.

Managing all these and coordinating with various stakeholders is a challenging task and calls for a system that can aid in the process. In this article, I am going to talk about EasyEcom solution for inventory holders, Manufacturers, wholesalers to manage their stocks/PO/GRN’s/Reconciliation.

Read further to know more on how EasyEcom can be helpful with resolving all the challenges involved with Purchase Order Management:

Best Purchase order generator software features:

1. Barcode generator for products

Generating Barcode for products is one of the primary things which brands do in-order to track their inventory. EasyEcom helps you in generating barcode and barcode labels, and also stores all the necessary information. This usually helps the product to have a unique identity.

2. Serialize inventory

Inventory serialization helps keep track of individual units using unique serial numbers. Expensive items such as jewelry, mobile phones, laptops etc need more detailed tracking to ensure no inventory shrink.

It is mainly a system generated unique serial number assigned to each item during the inwarding process. EasyEcom platform supports this feature in its enterprise edition.

3. Ability to handle multiple vendors for your product lines

Create, manage and track your vendor list from a single platform. With the help of EasyEcom PO system, handle multiple vendors for the same item along with their pricing structure. This is to make sure you receive your products at the best possible price.

4. Handling multiple currencies and manage Purchase from different countries

If you deal in more than one currency and purchase product from suppliers in other countries then, EasyEcom helps you create the purchase order for international suppliers in their currency.

5. Multi-stage, multi-status, multi-party Purchase Order system

Most companies usually require a staging system to handle purchasing. Purchase plan is usually made by the warehouse team and the finance department approves it. Any system should be able to handle that. In EasyEcom, the approval process can be configured before submitting it to the vendor. After you create a PO successfully, you will be asked to approve the created PO wherein you can check if the right quantity of product is going to the right vendor.

6. QC process at inwarding

Quality Check at inwarding is like inspecting incoming products. For e.g. you ordered 100 quantities of a water bottle. While inwarding, you do the QC of these bottles where you verify if any of the bottles are damaged or has a missing cap (suppose 10). The data is then being captured by the EasyEcom system and later you deal with your vendor for damaged bottles.

The vendor either refunds the amount of those 10 bottles or send you extra 10 quantities in your next order.

7. Keep a track of products with expiry dates  (Perishables)

The concept followed here is FEFO, that is the products with early expiration will be sold first. It is useful for food & pharma companies dealing with the products having a strict shelf life. So to stay stocked up with fresh products in your inventory, EasyEcom helps you keep a track of products nearing their expiry dates. By updating expiry dates during the inwarding process, the system allows you to apply FEFO on these products.

8. Shows suggested quantities to Manage Purchase

With not being aware of quantities to purchase for future sale, the inventory forecasting feature with EasyEcom will suggest you the quantities you should purchase based on your past sale.

For e.g. The system will provide you with the suggested quantities to fill your inventory based on the previous monthly average daily sale or previous season sale. In addition to that, the time taken by the vendor for delivery will also be calculated and factored in.

9. Shipment Tracking

Tracking incoming shipments is equally important in the procurement process. As the products move out of vendors location, until it reaches the buyer, there are plenty of things that can go wrong. Especially when there is no contact or update provided on delivery, it can create complications for the sales team. EasyEcom tracks the tracking number for the incoming shipment and provides options to update the status as the items move along.

10. Get notified when a product reaches its reorder point

Receive system generated notifications on your personal device once a product reaches its reorder point and stay updated with your inventory in order to avoid losing on sales. Here, the sales teams will be made aware by the alerts based on the reorder points for the given SKUs.

The best part?

EasyEcom has easy integration with Magento/WooCommerce/Shopify/Amazon etc…

An automated system like EasyEcom can help you generate an error-free purchase order in a fraction of time. Evidence?

Consider use case of an existing EasyEcom client who uses Purchase Order management to grow their sales.

Luffy pets, being one of the best stores for providing best care foods and toys for our pets have started using EasyEcom to improve its perishable products sale.

Luffy Pets buys pet products from its multiple vendors spread across different countries. The major challenges which company had come across are,

1. Delay in shipments:

Shipments used to arrive at vendors location later than expected, which could either be due to national holidays or bad weather conditions. Because the vendors were not provided with any tracking number of courier services, Luffy Pets had to answer multiple calls if the package doesn’t get delivered on the expected date.

Solution: EasyEcom provided an option to update AWB number with courier service details in Purchase Order approval form. With this, the Package can be tracked on a timely basis and can be coordinated accordingly through courier service directly.

2. Managing expiry dates for perishable products:

The company deals with perishable products on a daily basis. Fresh food, meat, chemicals, and pharmaceuticals are examples of perishable items that used to get spoil or become unusable after some finite time. They had issues with managing similar products with different expiry dates.

Solution: EasyEcom helped them update the expiry of a product during inwarding process and apply FEFO process on these products at the time of shipments. This helped them save a lot of time and products from getting spoiled.

With the upgrades in technology, let us now see how the Purchase orders were managed when there was no system to work with. How this process was manually taken care of.

Comparison of Purchase Order Management, manual v/s automated:


It is important for you to know that it is never late to get started with an efficient procurement process. If you feel like your business needs control of its expenses and improve its profit, then an automated cloud-based system like EasyEcom is a solution for you to keep an active eye on your business growth.

Inventory Forecasting: Proven Method to Fix Your Inventory Aging Today!

Proven Method to Inventory Forecasting and Accurate Budgeting – By EasyEcom

Let’s have a look at this graph which is a typical supply chain management lifecycle curve. This graph explains the inventory management system cycle for SKU ID 100324. After we consider various factors affecting inventory levels for the SKU across geographical locations, competition, feedback, promotions, Supplier time, etc they reach four critical numbers.

inventory forecasting sku

  • Maximum Stock Level:
    This is the optimum stock level for the particular SKU. In this case, it is 100.
  • Reorder Point:
    At this stock level, a new purchase order is generated. This number is arrived after considering the time taken by the supplier to deliver the goods in the warehouse. Here the reordering point is 42.
  • Low Stock Warning Level:
    This level is the warning level for the SKU going out of stock. In this case, it is 15.
  • Restocking Level:
    This is the level after the reordered quantity is delivered in the warehouse. In this case, the number is 90.

Now imagine doing this for all the SKUs in your catalog. In a supply chain, the above graph poses some difficult questions. The biggest dilemma that an organization faces is related to the inventory levels for its products.

Every merchandiser wonders about these questions:

How much should I order/manufacture?

More importantly,

When I should start the reordering process?

Inventory forecasting is the process adopted to efficiently answer these challenges.

What Is Inventory Forecasting:

Inventory estimation (forecasting) may be defined as a process of predicting inventory in future time periods. More specifically inventory forecasting is a scientific approach of predicting sales during a specified future period based on the proposed marketing plan and a set of uncontrollable and competitive forces.

Inventory Forecasting - Featured Image

All this may sound very difficult. But this becomes really straightforward if you implement the right solution. Below I will show you an example of the same.

Factors affecting inventory

There are several internal and external factors affecting sales of an organization:

  • Seasonality of inventoryinventory prediction
  • Competition
  • Technological failures
  • Reputation
  • Labor issues
  • Supply chain related factors
  • Inflation
  • Recession
  • Change in government laws

How to use Inventory Forecasting Software To Predict Demand Accurately

Forecasting inventory will ultimately determine the fate of your retail business as it’s a big factor in profitability figures. Any system used, needs to consider purchase or sales made in the previous month; previous season or any custom duration depending on the upcoming time period.

To illustrate this better we are going to use the examples of EasyEcom’s Inventory Forecasting software.

EasyEcom software helps to overcome hurdles involved with calculating the sales and planning inventory with ease. It helps you to plan future sales based on your previous history.

Let us look at scenarios where EasyEcom can be helpful:

Inventory Forecasting Scenarios:

Inventory planning based on previous month sale

In order to plan your inventory for next month based on previous month sale, you need to provide the number of days you want to plan the inventory for (in this case, 30 days) along with the range of days you want the inventory planning to be done based on (in this case, previous 30 days).

To be specific with a particular product or vendor, you can further apply a filter based on the brand name, SKU or vendor name.
Inventory planning based on previous month sale
The system will then provide you with the suggested quantities to fill your inventory with, based on the previous month average daily sale. The suggested quantity also calculates the time taken by the vendor to deliver the products.

Inventory planning based on previous season sale

Similarly, the system will provide you with the suggested quantities to plan on upcoming Christmas holidays, based on the sales made during last Christmas. For this, select the number of days you need to plan for (in this case, 60 for December and January month) and date range based on previous year custom month, December and January.

Inventory planning based on previous season sale

With that being done, you also have to look after the fresh stocks currently available and are moving out faster. For Christmas season inventory planning, applying a few additional factors (for holiday rush) on fresh stocks can help you avoid losing new/existing customers.

Iterative Inventory Forecasting

So, when it comes to forecasting, a lot of uncertainty is involved in any organization. In order to reduce the adverse effect of these uncertainties, an organization can take an iterative approach towards determining the inventory projected in the future.

For example, a subscription-based web business ought to be able to project website views based on its organic search placement, paid advertising, email marketing, and other alliances & promotions. Make a projection of traffic by summing up your sources, then estimate the conversion rates, and that gives you unit sales.

Now as time moves on, we need to make changes in the assumption. For example, if we predicted 10% month over month growth rate by spending $5000 per month on advertising. However, due to budget cuts, the company can only spend $3000. That will cut down the traffic by 40%.

Similarly if suddenly a competition decides to discontinue their services, suddenly the conversion rate might shoot up by 30-40% hence boosting the inventory demand. Generally quarterly or monthly revisions in predicting mechanism are recommended. This depends on the nature of the company products and time required for a feedback cycle to complete for that particular assumption.

Advantages of Inventory Forecasting:

  • Happy Customers:
    When a customer gets the product without a delay, they tend to trust you more for their needs. This helps in repeat purchases and loyal customer base. Consider a scenario where the customer would require a product on a regular basis which, if not procured on time may affect his business. If he is able to purchase the product and get this delivered on time, he will be a loyal customer for life.
  • Reduced Stockouts:
    This is one of the most talked about yet common issues among retailers for sales loss reasons. Factors need to continuously optimized to get a better estimate trend. An accurate forecasting method not only ensures lower inventory idle time in the warehouse but also the less operational cost is required.
  • Efficient Production Cycle:
    Forecasting involves closely monitoring present inventory to understand the future. Responding to and adapting to the changes or pattern of consumption by the consumers gives a better idea of how the future is going to be.
  • Lowering Safety Stock:
    When your inventory forecasting process is accurate, it increases your reorder capacity and thereby reducing the safety stock level to free up capital. If a business is using proper forecasting to plan then you don’t need to carry high safety stocks to manage your inventory.
  • Reduced Idle Stock:
    Obsolete inventory is a big burden on the margin of any business. To reduce the burden, it’s very essential to identify, repurpose or removal of obsolete inventory. It decreases the volume of inventory on hand and subsequently both direct and indirect costs of keeping the obsolete inventory will be reduced. Having a reliable forecasting inventory method will reduce ordering any excess stock and increases net profitability.
  • Managing Manpower Better:
    When a business suddenly starts to grow, manpower requirement is also increased to handle the operations. So an inventory forecasting report helps the organization be better prepared for a sudden growth in future inventory with a proper manpower planning in place. For example in the case of a subscription business, if the inventory is going to shoot up in few weeks’ time, the recruitment effort has to start immediately in order to be able to fulfill the inventory.
  • Better Pricing and Promotion Strategy:
    With a better co-ordinated and planned promotion strategy always yields better results. With integrated distributor-level promotions and related forecasts helps to improve the flow of goods. It also achieves better results in terms of availability and stock fill rates.
  • Better Supplier Negotiation:
    When you know exactly when and how much you are required to order; the negotiation becomes easier for you. The supplier is also aware of the kind of business he can expect from you and hence gives you a better price. By having a negotiation based on logic and research you are positioning yourself as a credible customer who wants to have a long-term relationship rather than one-off spot buy.
  • Plan Sales Strategies:
    Forecasting is very helpful with Product Management, Marketing and Product Design planning. Decisions on promotions, pricing and purchasing are made with data derived from inventory forecasting. This has a positive impact on the sales and profit margin.

Benefits of using Inventory Forecasting with software like EasyEcom:

  • With inventory aging report, we can identify stale inventory. End of season sales offers can be created for such inventory to free up the working capital
  • Plan inventory based on multiple sales channels and offline sale combined together
  • Flexibility in planning inventory based on different time frames (sales velocity during holidays vs regular time)
  • Receive automated alerts at inventory reorder point
  • Ability to accept backorders in case demand goes over the board. New purchase orders can be created for respective vendors for the backorders.

How to Measure Inventory Forecasting:

When you have data available, anything can be measured but to accurately forecast inventory, the focus should be on those data points which are relevant. Before we jump into how to do inventory forecasting, we need to consider a few crucial points.

A Forecast Accuracy Metric That Is Objective, Quantitative, And Manageable.
Deciding what to forecast?
Level of aggregation: Individual products or product groups? Weekly, monthly, or quarterly inventory? Units of measurement: units or dollars?
Determine How Often It Should Be Measured
Feedback cycles of each assumption used in forecasting

But one thing the management needs to understand that no matter how sophisticated the forecasting techniques you use, forecasts will never be 100% as it involves factors that are not controlled by you and a lot of uncertainty involved in it.

Techniques Used To Measure:

While forecasting inventory, there will be two sets of products. First is for the products that has stable inventory and has past data available. It can be forecasted more accurately. The second type of products are items that are new, low volume and innovative products. It is very hard to predict an accurate forecast with considerable uncertainty involved. And to make the problem more complex, there are zero historical data and some assumptions have to be made to calculate inventory.

The techniques used can be broadly divided into 4 different categories.

  • Trend forecasting:
    These are forecasting methods. When a particular type of upward or downward trend for a particular product is involved, this method is used for forecasting. The double exponential smoothing, regression, triple smoothing etc are few techniques popular in this category.
  • Graphical forecasting:
    When you have data and you convert them into a graphical representation, it conveys the pattern visually. Visual representation of data is easier to comprehend. This technique can give you a general trend without getting too much into understanding the data. Previous inventory exploration, trends and patterns help you forecast easily.
  • Qualitative forecasting
    When historical data is unavailable or irrelevant or are scarce, the forecasting is done based on an intuitive or judgmental evaluation. When a new product or a new innovation is launched, this scenario arises. Some typical qualitative techniques are based on personal insight, sales force feedback, panel consensus, market research, visionary forecasting, and the Delphi method.
  • Quantitative forecasting
    When a historical inventory data is used to project future inventory, it becomes more accurate and relevant. The available data and the other relevant factors are taken into account while forecasting the future inventory in these methods. The popular methods adopted by organisations are the Extrinsic and intrinsic techniques, time series forecasting methods (relying on past data) supplemented by qualitative judgements.

Inventory Forecasting Best Practices:

Keeping a few very crucial points in mind while calculating inventory forecasting gives maximum output.

  • Get input from various stakeholders. Take input from Sales, Marketing, and Finance.
  • Competitors sales data
  • POS data
  • Amount of obsolete stock
  • Frequency of stockouts
  • Shipments
  • Orders
  • Measure Forecast Accuracy at the SKU, Location, and Customer Planning Level
  • Adjustments Based on Feedback of Current Cycle & Focus on exceptions
  • Talk with customers
  • Review the data for trends


It is always very beneficial to have a great inventory forecasting team who work on a regular interval to understand the trend and derive accurate inventory forecasting method.

It is important to understand what kind of data is more important with respect to forecast accuracy. Is it the external data like competitor sales, POS data, sales team forecast or the internal data like stock-outs, shipments, orders, etc?

Apart from this, it is also important to determine which time buckets are most suitable for forecasting. For example, whether to use monthly time buckets or weekly time buckets for planning. All these factors changes from organisation to organisation.

Nobody can predict 100% accurate inventory forecasting every time. It is very essential to understand this and review the past forecast, learn from the trends and improve the accuracy.