Five must-have inventory automation features

Automation features in an inventory management system

By the time you are reading this article, you have probably already made up your mind to invest in inventory management software for your business. Investing in software is a critical decision, so it's important that you think carefully about your requirements. 
You've done plenty of research and consulted some good sources, but before you make the final call, make sure you're not missing the automation features you'll need.

Read on to find out:

i) What is inventory automation? 
ii) How does automation impact your business?
iii) What are the five automation features that you need in an inventory system?

What is inventory automation? 

Automation in inventory systems helps you to keep track of items, monitor stock levels, and analyze situations effectively. Let's try to understand with an example.

Imagine that you have received a bulk order from one of your regular customers, for 100 units of one of your best-selling items. Before you confirm the order, you need to make sure that you have enough stock to fulfill it. Your inventory spreadsheet shows that you have 102 units on the shelf, but you know that your business is constantly receiving orders through your physical store, your website, and the online marketplace you joined last year. What if you confirm this order and then learn that another customer bought 25 units of this item in your store earlier today? To be safe, you'll need to check with each of your sales platforms to make sure they haven't sold the stock you need to fulfill this order. 

With automation, your inventory system can update your stock counts each time an order is processed through any of your sales platforms. You won't need to call the store to check what they've sold today, because any sales they made were reflected in the inventory system as soon as the items were removed from the shelf. So when you see that you have 102 units in stock, you can trust that 102 units are available to sell. There's no danger of overselling, so you can go ahead and confirm the bulk order without keeping your customer waiting.

How does automation in inventory management impact your business?

If you are a business owner or a manager, then you already know that the four major stakeholders in any business are the partners or investors, the employees, the customers, and the suppliers. All these parties have different interests in your organization:

Stakeholders of organizations

In order to meet these differing interests, businesses need to manage a lot of factors. But the one common parameter that can help with all four is efficiency in operations, and that is exactly what automation helps to achieve.   

Automation helps to keep your daily operations effective by improving accuracy and speed. A lot of inventory applications allow you to set up simple workflow rules which trigger certain actions without requiring you to intervene. When you let automation take over your mundane tasks, your employees can focus more on growth strategies, and you'll have more time to spend on product quality improvement. This will increase your profitability, making your customers and investors happy respectively. Also, it will help you to provide prompt payments, which your suppliers will appreciate.

Now that we have an idea of why you'd want to use automation, let's dive deeper and look at the most important automation features in any inventory software.

Five must-have automation features:

1. Marketplace automation 

Order management is a crucial area of inventory management. Order management refers to the daily process of managing items, handling purchase and sales orders, invoicing, billing, packaging, and shipping. In the initial phase of a business, most of these operations can be handled manually. However, when you decide to expand your business online, the need for automation kicks in. With the US eCommerce market expected to grow to $600 billion by 2024, it's a smart move to join an online marketplace. However, a marketplace adds a whole new level of complexity to your inventory management along with that extra order volume. So if you are planning to take your business online, you'll want your software to handle these marketplace operations automatically:

i) SKU mapping: Based on the SKU, any item that you add in your online marketplace or shop should be automatically added in your inventory software and vice-versa.

ii) Order fetching:  Every order made online should get pulled automatically, and the stock status should be updated across all of your online stores and also in your inventory software.

iii) Real-time shipping rates: Just like the orders, make sure that your inventory system also updates real-time shipping rates so that you can always choose the most cost-effective shipping option.

2. Re-order notification

A re-order notification is like a fire alarm for your business! This feature saves you from one of the biggest threats for any business: going out of stock. To put it in simple words, a re-order notification is a warning system which gets triggered when the stock status for an item is dangerously low, thereby reminding you to refill the stock. As your number of items and orders grows, it becomes difficult to track the stock level manually, which can lead to errors.

A re-order level also helps you follow a disciplined approach of purchasing items and restocking goods in your warehouses at the right time. This saves you from overstocking goods, which is a major problem faced by many businesses. A good inventory management system allows you to pick the re-order level for each item (which you can revisit and change as needed), automate the whole task of keeping track of your stock, and receive notifications at the exact point when you need them.

3. Barcode scanning 

Barcode scanners are electronic devices which scan item barcodes and register the details in inventory software. This improves efficiency, reduces errors, and saves time. To give you an example, suppose you receive a bulk order for three units each of twenty different items from one of your regular customers. After you confirm the order, filling in the details of each unit of every item will take an enormous amount of manual work and time. You have different SKUs, individual serial or batch numbers, rates, and purchase prices, and with every additional piece of information, the chance of committing a human error also increases. With a barcode scanner, the task becomes much more simple and a lot less prone to error (unless you forget to scan the items). However, having a barcode scanner will only be beneficial if the inventory system you've chosen allows you to connect a barcode scanner and supports its workings. If you have a growing business with a lot of inventory, do not miss out on this important automation feature.

4. SKU generator

When it comes to handling the SKUs of individual items, barcode scanners make your work a lot easier. However, if your business maintains a lot of similar item groups with distinguishing attributes, what you need is a tool for managing product numbers, not just capturing them. In such cases, a SKU generator can solve the problem. A SKU generator is a simple tool which suggests a unique SKU for an item group based on its attributes. These tools usually have three to four fields asking for information about the item, like its item group name, attributes, and applicable codes. It also gives you the liberty to add more custom fields so that you can drill down to the specifics. You can play around with the way you want to present it — for instance, a pair of 34-inch blue CCC brand jeans can have a SKU like this: 

BL - 34 - CCC 

or it could be CCC - BL- 34, or 34- BL-CCC.

Whichever option is most consistent with the rest of your items will be the ideal choice. If you wish to dive a little deeper, here's a short article about how to create SKU numbers.

To summarize, a SKU generator tool has the following three broad advantages: 

i) It establishes a logic for your SKUs, which in turn reduces confusion and repetition. 

ii) It can adapt itself to the growing needs of your business. So, even if you add more groups or attributes, generating an SKU for them will always be easy

iii) It hardly requires any training, which means any member of your warehouse staff can use it efficiently right away

Check out how this SKU Generator can help you create SKUs effortlessly

5. Reporting

Reports form the basis for any business's decision-making and strategy formulation. You need the right numbers to plot accurate trends and make a concrete decision. However, small businesses often spend a lot of time preparing these reports and then brainstorming over them. If the data is manually updated in multiple spreadsheets after each sale, this increases the chances of missing out on important information or having a mismatch in data. In today's fast-changing markets, such delay and errors can be fatal for your business.

An inventory system makes this process easy for you by updating the data in all the relevant modules concurrently. So you don't need to go back and update the item level status after you record a sales order in an inventory system. The system will update the item level and populate your sales reports, inventory details report, and inventory valuation report automatically. This saves time and removes the chances of error. An inventory system which supports reporting and generates the 8 most essential reports will prove to be an effective investment for your business.


Automation can seem a little scary at first. Business owners might feel discouraged from trying it because they think it needs too much investment and will be too complex for them to handle. But you don't need a whole ERP system to automate some of your daily business tasks. A small investment in cloud-based software with the right automation tools can make a lot of difference for your business. If your inventory platform handles marketplace actions, re-ordering, barcodes, SKUs, and reports, you're off to a good start.

Note: We have updated a hyperlink in this blog with the most recent statistics on the eCommerce market.


2 Replies to Five must-have inventory automation features

    1. Hi Stephen, Thank you for writing to us. Yes, reorder point can be set on the sales order as well. I believe, what you are trying to say is that if you set the sales reorder level to say, 100 then you will get an automatic reminder when you reach that number. The reorder point that we have mentioned in this blog also functions pretty much in the same manner. The only difference is that it focuses on the reserve items that is, the number of items left in your inventory after you make the sales. The sole intention of doing this is to identify the number of items you are left with before you go out of stock. I hope this helps. Feel free to write to us if you have more ideas and suggestions to share with us. Thanks

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