How to Select an Inventory Software Package
- 1). Evaluate the inventory needs of your business. Be sure to talk to the people who manage and control the inventory along with the financial managers of the business. Make a list of all products that have to be inventoried. Create a flowchart of how inventory travels through your business and identify the stages at which inventories take place. List all of the financial data that is needed from your inventory, including sell-through data, inventory turnover, lead time inventory, minimum and maximum stock levels and available storage space. The inventory software system that you select will need to be able to handle all of these calculations. You may also need it to create calendars that let you take advantage of bulk orders and discount days. Determine whether you need the inventory system to be a part of your point-of-sale system so that inventory calibrates in real-time with sales as they are made.
- 2). Create a matrix of features that you need the software to have. Rate each feature on how essential it is to the management of your business's inventory management needs. This list will eventually become a part of your request for proposal (RFP), and the matrix will help you evaluate the RFPs you receive.
- 3). Evaluate your current computer system. What is it capable of handling? What are its specs? Record all of this information. You will need to make sure that your current computer system can handle the new inventory software.
- 4). Create an RFP. The RFP is a formal, written document that spells out the specifications of the item you want to purchase, in this case, the inventory control software. It will tell vendors what you are looking for, and they can respond with a proposal about how they can meet your needs. Because you sometimes have to reveal information about your business that you wouldn't want competitors to have, RFPs may have such legal documents as Intellectual Property and Nondisclosure and Terms and Conditions papers. Some templates for RFPs are available in business textbooks and on the Internet, but you'll want to use them only as a guide and develop your RFP to meet your company's needs.
- 5). Compile a list of reputable software vendors. Prequalify them by developing a checklist that you use to evaluate each of them. Questions on the checklist should address how long the vendor has been around, how up-to-date its software offerings are, the vendor location, the vendor's reputation, technical support availability and flexibility of formats that it offers.
- 6). Send the RFP out to the qualifying vendors. Distribute your RFP through the mail, email, at a meeting with all vendors present or by having one of your company representatives personally visit each vendor and talk to it about your needs.
- 7). Evaluate the RFPs when they are received. Narrow your choices to two or three based on how well they meet the needs of your business and the cost of the program. Depending on the size of your organization, a committee may be responsible for evaluating the proposals. Representatives of affected departments would be a part of the committee.
- 8). Test the software of the top two or three vendors that you choose from the RFPs. This is a good time to find out how responsive the technical support staff would be to your questions, how flexible the vendors are and whether they can make changes to a system while it is being implemented. Have the employees who will be using the system be part of the testing.
- 1). Determine the inventory needs of your business. List exactly what you need an inventory system to perform, the types of reports you want it to generate and which inventory functions you expect the software program to handle. For example, you might need it to include a bar code reader so that employees can use a scanner to take inventory. The program might also need to generate and issue purchase orders.
- 2). Talk to your business associates and ask for recommendations. If you belong to an association, ask other business owners and managers what inventory software they have found to be effective. Your association might also have a list of recommended vendors and software programs.
- 3). Attend trade shows. Visit the trade floor and seek out vendors of inventory software programs. Talk to the salespeople in the booth and ask them to demonstrate the features of their program.
- 4). Evaluate the programs that were most highly recommended and that seem to best fit the inventory control needs of your business. Rate each one on the factors that you identified before you began talking to others. Compare the ratings to the price. Determine whether the software program will run on your current computer system or whether it would require an upgrade.
- 5). Purchase the program that best meets your needs. Talk with the vendor to find out what type of license you need to sign to use the program effectively in your business.
Selecting a Proprietary, Customized System
Selecting an Off-the-Shelf Program
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