How to Pick an Inventory Management Solution That Scales with Your Business


For several companies, especially those in the manufacturing and CPG industry, managing inventory plays an important part in serving customers.

In the initial phase, distributors may put a hold on finding inventory solutions and solely focus on launching their business and creating sustainable business models by choosing product lines and setting up shop through physical and virtual locations.

However, once they have successfully executed their ‘early-stage’ planning and established themselves, business owners may try to figure out ways to scale up, expand their markets, and increase their sales by expanding their customer base and driving profits.

During this time, distributors may shift their focus from their initial hands-on model towards software solutions that help manage business tasks and eliminate errors. That’s when it’s time for business owners to find the right inventory management solution that scales with their business.

While the right inventory management solution may vary for every business, wholesale distributors such as CPG and manufacturing companies may be on the lookout for solutions that are flexible, scalable, adaptable, and most importantly cloud-based for smooth operation in today’s fast-paced, ecommerce-oriented selling environment.

Read on to find out how businesses can choose the perfect inventory management solution for their business.

Choosing a System That Eases Distributor Pain Points

Managing inventory is not unlike the tale of Goldilocks. Manufacture or buy too little and you are left to deal with constant stock-outs and unhappy customers, whereas buying or manufacturing extra goods raises carrying costs and obsolete inventory levels.

Possessing optimal levels of inventory is a delicate balance, but finding that ‘just-right’ level is an absolute must in the CPG industry, where a mismanaged inventory and a dead stock of perishable goods such as food and beverages can drive businesses into the ground. Inventory management software includes the basics: Product ordering, storage, and control at the right cost.

However, the right solution will do the additional task of running simple operations that aren’t bogged down with excess inventory and eliminating wasteful processes by analyzing inventory turnover. It will help target and ease the distributor’s pain points such as high inventory costs, storage costs, and working capital tied up in inventory as well as the loss of customers and materials due to carelessness.

While these problems can lead to substantial financial loss, setting up a scalable inventory management system enables users to monitor high levels of inventory visibility on a real-time basis.

Figuring Out if the Software Is Configured for Scalability

When picking out a new inventory management system, companies may look at a variety of software solutions that meet their current needs.

However, what businesses sometimes fail to realize is that the purpose of installing new software is to ensure that the system can keep up with the potential growth of the company, especially in manufacturing and CPG industries where inventory management is the one area where ‘scale’ holds a lot of significance.

Once established, these businesses may attempt to grow revenue by expanding into new geographies, adding new product lines and supplier partners, overhauling their ecommerce approach to sell more products online, and creating stronger alignment with customers.

However, these things are only possible if the company has a strong foundation that can bear the extra load without creating a dent in the average income i.e. a flexible inventory management solution that can help streamline operations and simplify even the most dynamic of distribution environments.

As we see here, distributors in today’s cutthroat business landscape cannot afford to spend time and resources on manual inventory management processes that don’t give them any wiggle room to work with in the future.

Using an Excel spreadsheet to manage inventory, for instance, maybe somewhat efficient for companies in the initial phase, but growing businesses will continually find themselves dealing with overstocking and understocking issues or tiresome double checks when inventory counts don’t align with the products on the shelves.

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High levels of human error, poor demand forecasting, and the inability to handle an increased number of SKUs upon distributorship growth are some of the indicators that your current system is not equipped to handle a growing company. But upon adopting a crawl-walk-run approach during the software selection process, companies can seek guidance from vendors to not only build their inventory management systems on a strong foundation but also set up themselves along with their systems for future success.


Whether distributors have just entered the business landscape or are gearing up to gain more market share, companies without an automated inventory system will surely miss the mark as they do not have anything to build on.

The user must research their current inventory management systems, look at their benefits as well as their limitations, determine a five-year plan for the company, and then pick the right inventory management solution. That’s where cloud-based inventory management systems come in.

They equip businesses with accurate inventory data which is recorded, tracked, and optimized to help users reduce costs, minimize waste, and meet customer expectations by accurately predicting the consumer’s needs.

These systems, however, serve as the framework for an entire business and rushing the process during the busy season can hamper the selection process.

Therefore, it’s important to pick the right time for the purchase and installation of an inventory management solution as it holds the power to keep the company streamlined, automated, and profitable.