Inventory Management Questions to Help Diagnose Inventory Health

Danielle Lobo

When it comes to Warehouse Inventory Software, there are commonly asked questions that our Sales Team addresses on a frequent basis:

"What is the cost of the software?"

"How long will it take to implement?"

"Who is responsible for the implementation?"

Although these are all valid and important questions to be addressed, other not-so-obvious yet equally significant inquiries need to be discussed to save yourself the hardships of an implementation war. If you already have software implemented and just want to conduct an inventory health check, we’ve compiled a list of inventory questions to ask yourself, your vendor and potential questions your vendor will ask you. These questions are designed to get you thinking about how you stock and manage your inventory and help you determine if there are opportunities to increase the efficiencies and process that relate to your inventory.

Inventory Questions to ask yourself

  1. Who determines frequency of inventory replenishment?
  2. How are you calculating Safety Stock?
  3. Do you have real-time visibility into Inventory levels?

1)      Who determines frequency of inventory replenishment?

The first thing you’re going to want to do when conducting an inventory health check is understanding your current processes. In some businesses, purchase order requisitions are used when inventory is low and a department requires approval to order it. In other businesses, management set inventory levels that signals the system to alert someone of the low inventory or automatically create and send a purchase order.

2)      How are you calculating Safety Stock?

There are several ways to calculate safety stock and in some cases your ERP software can help you do this. By offering visibility into lead time and sales, you can determine what the optimal level of stock is for every product you sell. The worst thing you can do is end up with negative inventory or overstock of a product that is no longer trendy.

3)      Do you have real-time visibility into Inventory levels?

Real-time reporting and analytics is a recurring theme that we write about. You probably think you are fine with the reports that you run now but imagine if you can see granular inventory information with the ability to drill-down at any time you want? You could even have your favorite reports emailed to you on your favorite day of the week! With the technology that is out there now.

Inventory Questions Your Vendor Will Ask You

  1. Tell us about your warehouse operations
  2. What are the biggest inventory management challenges you’re facing?
  3. What are your reporting needs?
  4. Who will be using the system?

1)      Tell us about your warehouse operations

This will include telling your vendor how your accept sales orders and how your send purchase orders, the processes to pick, pack and ship product amongst others. The more you can tell them, the better they can understand and offer advice of bettering your current processes to ultimately save you time and money.

For example, if you are shipping product all over the US and Canada, they may recommend you integrate with Transportation Management System that will allow you to choose the cheapest courier and rate at the click of a button.

2)      What are the biggest inventory management challenges you’re facing?

Every business is different and in order for your vendor to help you, they need to understand your biggest challenges. This may be anything from warehouse product placement, to supplier communications.

3)      What are your reporting needs?

Your vendor can easily customize reports specific to your business… just ask. A little consulting time may cost you an hour or two upfront but could potentially save you hundreds of dollars and hours in the future. Consider asking what else your vendor can customize when conducting your inventory health check.

4)      Who will be using the system?

Will it just be management who needs high-level reports or will your warehouse employees also need access to the system?  Depending on who you want to enroll as a user, talk to your vendor about security permissions for employees.

Keep in mind, your vendor should be asking industry related questions as follow ups to the above.

Inventory Questions to ask  your Warehouse Inventory Software vendor

  1. What functionality do you have that is especially useful to my industry?
  2. How do you consistently provide ongoing innovation and value?
  3. Who is your software not a good fit for?
  4. What are your service offerings beyond functionality?
  5. How often will you meet with me to discuss my system?
  6. What kinds of companies are in your customer base?
  7. Can you give me industry references?
  8. What kind of automation of inventory order is offered?
  9. What kind of support do you offer?

1)      What functionality do you have that is especially useful to my industry?

Choosing the right warehouse inventory software is a cumbersome task for any company, but can get even more complicated when industry specific functionality is needed. For example, certain industries such as Apparel, Food and Beverage and Pharmaceutical and Medical all require specific features in order to comply with regulations and manage processes.

So, when you evaluate vendors, be sure to ask what capabilities they have that are a must-have for your industry. Some unique features include:

2)      How do you consistently provide ongoing innovation and value?

You want to make sure that your investment is not short-term and that your warehouse inventory software will still be functional and useful to your business years from now. This question will help you determine if the company is capable of keeping up with changes in technology, regulations, and business processes. How often do they release updates? How are they staying on top of industry compliance? The last thing you want to do is sign on with a company that is stagnant in their development and cannot keep up with your company’s growth.

3)      Who is your software not a good fit for?

This question is good for filtering out any shortcomings early in the buying process.  A good vendor will also recognize if your needs are outside the scope of what they can deliver and will let you know ahead of time. There are certain deal-breakers when it comes to determining if warehouse inventory software is the right fit for your business- budget, industry-specific functionality, implementation timeframe, language requirements, multiple currency requirements etc. Take the time to thoroughly analyze your business processes to identify any outside-the-box or unique features that you require before you speak with vendors.

 4)      What are your service offerings beyond functionality?

It’s easy to get caught up in the specific functionality a vendor can offer you but what about the kinds of services they offer you beyond the software itself? Some services include:

  • Data Migration- Can they migrate all relevant data from older systems without the need for manual data input?
  • Training- Do they have a qualified team that can teach your employees how to best utilize the system?
  • Customization- Some vendors offer customization to ensure that the most unique aspects of your business are implemented
  • Technical Support - Do they have an in-house support team? What are their hours of operation and how quickly can they respond to your needs?

5)      How often will you meet with me to discuss my system?

This is a question that rarely gets asked leading many businesses to miss out on some great opportunities. Depending on the vendor, you’ll be able to set up one-on-one meetings to go over any concerns and needs you may have on a frequent basis. Take advantage of these sessions as they are normally a part of your service package. It’s a great way to stay on top of the software and ensure you’re using it to its fullest capability.

6)      What kinds of companies are in your customer base?

Knowing that the vendor has successfully implemented other companies in your industry is a good sign that they are able to deliver a smooth implementation for your business. Ask them if they have testimonials or high-level examples of the types of warehouse inventory processes and regulations they are able to support that are relevant to your business.

7)      Can you give me industry references?

Always ask for references. Talking to current customers in your industry gives you greater confidence that the software can and will perform as promised. This is usually done at the later stages of the buying process. Be sure to ask the references what went right, what went wrong and what they would have done differently. If the vendor can provide you with at least two references in your industry, chances are they have the experience you require.

8)      What kind of automation of inventory ordering is offered?

In this day and age, you’ll want to find any way to automate your processes and if you vendor isn’t offering the most up to date functionality – or similar, its time to question the life expectancy of that system. Most software solutions nowadays allow you to automate tasks when inventory levels are low for example.

9)      What kind of support do you offer?

Many people conducting their software search often forget that you will probably need help from the vendor in the future. Whether its for tech issues or a simple how-to question, you’ll want to be aware of the support and knowledge the help team has. Will they be able to answer your specific questions and will be recognize your business processes to answer your questions effectively?