Manual vs Automated Inventory Management: What Fits Better?

Inventory is one of the most important assets for any business, and when an online business is in question, it becomes ten times more important. Inventory is the final product through which ecommerce businesses interact with their customers on delivery. Staying up to date with the details of inventory holds great significance. Sellers keep track of their inventory through inventory management, which can be carried out in two ways: 

• Manual Inventory Management - physical counting and tracking of inventory
• Automated Inventory Management - software-based inventory tracking

Before choosing between manual and automated inventory management, having a thorough understanding of inventory management is necessary. 

Little Spotlight on Inventory Management and Its Benefits

Inventory management is the process that begins with the procurement of goods and ends at sales. In case of dead inventory or unsold stock, it can also end up in replenishment. It includes: 

• Stock Counting according to units and categories
• Stock Tracking - what is going in and out 
• Forecasting for Stock Updates and demand
• Re-ordering of Stock on the basis of forecasting 
• Determining Optimal Stock Levels
• Setting for Safety Stock to avoid risks and more…

Once all the above-mentioned tasks are completed, inventory management is done and dusted. Streamlined inventory management systems make it easier to deliver and fulfill orders. It allows businesses to: 

• Meets the demands of the customer
• Keep the stock updated
• Reduce the risk of overselling/underselling 
• Build healthy profit margins 
• Minimize the storage costs
• Reduce obsolete or expired Stocks 
• Increase Operational Efficiency. 

With all these benefits and responsibilities, inventory management becomes a top priority for e-commerce businesses. Also, choosing the right way to do it is a crucial decision to take. This blog will make that decision simple. The next 7 minutes of reading will draw a clear distinction between automated and manual inventory management with their respective use cases. 

Foundation: Manual vs Automated Inventory Management 

Let's take the decision step by step. The first step is understanding the basic concept of Manual vs Automated Inventory. 

Manual Inventory Management

Manual Inventory Management is the traditional method for inventory tracking wherein physical counting and stock management are done using pen and paper or spreadsheets. This method completely relies on human efforts and is hence low in cost and suitable for small businesses with inventory just in one location without much segregation. 

With manual inventory management, sellers get a sense of control and a feeling of accuracy. It adds to the awareness of the stock movement and availability. However, it is time-consuming and requires dedicated personnel to take care of the stock. Also, if the scale of the business grows, it becomes unfeasible on multiple levels. The scope of human errors cannot be ignored in this case. 

Automated Inventory Management

Automated Inventory Management is the latest and more prominent way of managing inventory. It utilizes advanced software to optimize inventory-related processes. This method utilizes technologies like barcodes, RFID, and cloud computing to study stocks. It can be expensive in terms of cost but returns the sum in terms of accuracy and effort. 

It gives real-time updates on stock, avoiding discrepancies. It also provides data and stats that can be used for demand forecasting, order fulfillment, data analysis and creating safety stock limits. Sellers, in this case, do not have to worry about overselling or underselling. It minimizes the order processing time and effort for human resources so that they can focus on more important work with accuracy like data analysis and product development.

The Selection Point: Manual Inventory or Automated Inventory? 

The second step of selection is here. Now, knowing the basic definition is not enough. To make a well-informed decision, knowing the Pros and Cons of both sides is equally important. This section will highlight the pros and downsides of both Automated and Manual inventory management: 

Manual Inventory 

Pros:

• The implementation is rather straightforward.
• The requirement on infrastructural grounds is minimal
• It suits best for small businesses with minimal resources

Cons:

• This method is labor intensive and hence not suitable for medium to large-scale businesses.
• The scope of error is much wider in this case due to human missouts. 
• The cost of errors by the human capital adds to the cost of the business, cutting down the profits.
• It becomes hard for manual systems to keep pace with the business as it grows. 
• When managed by human capital, data will have multiple access points, increasing the chances of data corruption.

Automated Inventory

Pros: 

• Real-time tracking of inventory and order fulfillment is possible with automated systems
• Overselling or stockouts conditions are easy to avoid 
• Dead inventory cannot be an issue because of stock optimization
• Data insights provided by the software help to know about customer behavior and purchasing patterns
• It saves time and effort for human capital, which can be utilized in other places.
• Integration of inventory with other departments becomes easy with software, leading to better collaboration
• It is suitable for all kinds of businesses because every business aims to grow in the future. 

Cons: 

• Constant maintenance is required 
• Employees need to be trained to work on the software
• System downtimes can be a part of the difficulty

After gaining a clear view regarding both options, you must have made up your mind by now. As a seller who wants to grow and focus on actual business work, choose Automated Inventory Management to avoid any unnecessary hassle. Also, accuracy and data are an all-time requirement for any business. 

Just One Right Choice to Make the Difference

Understanding the need of the hour and the ongoing digital era, I believe that choosing automated inventory management is the best for an online business. Also, for a seller who wants to grow and focus on the product, investing in the right inventory management system is a must. Just any inventory management software cannot make all the difference. Selecting the right software is also an important task. 

Let's make it easy. MapMyChannel is the choice for many ecommerce businesses who want to manage their inventory without any discrepancies. Also, it can integrate multiple channels so sellers do not have to hop on different platforms to manage their inventory and products. MapMyChannel also helps with order fulfillment, delivery tracking, product listing, holding orders, and a lot more. So, wait no more and automate your inventory.