Procurement 101

The Benefits of Automated Inventory Management Systems

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8 minutes

Written by

Logan Price

Benefits of Automated Inventory Management

If you are tired of constant errors and miscalculations when it comes to inventory management, automated inventory software is the perfect solution. 

This article will explore everything regarding automated inventory management systems, from benefits to the best tool on the market. So, if you are ready, let’s start!  

Challenges of Manual Inventory Management 

Inventory management is an essential part of business operations. However, many businesses face significant challenges in this aspect, especially if the processes are manual. These challenges can have consequences ranging from lost sales to damaged supplier relationships. 

So, before diving into the benefits of automated inventory management, let’s overview the main challenges of manual inventory management. 

Inaccurate Stock Level Estimations 

One of the most prominent challenges in manual inventory management is inaccurate stock data. Relying on employees to keep track of inventory (especially as your business grows) poses significant risks associated with wrong estimations. It can impact the whole procurement process, from placing POs to managing invoices and contracts. 

Let’s say one of your employees made a mistake regarding stock availability. In this case, the item is available in minimal quantities, but the employee made a calculation mistake when reporting to the procurement team. The procurement team has not placed a new PO for the X item, as, according to the report, it is still in stock. Then, you are left with more demand than supply. 

Reputation Damage 

Inaccurate stock levels will cause frustrations and damaged relationships not only with the suppliers but also with the customers. Imagine if a customer orders a product “in stock” and finds out it is unavailable after the order is placed. 

Well, this can significantly damage your business’s reputation. So, making sure that inventory management processes are regulated properly is vital. 

Inefficient Time Management 

Another challenge businesses face with manual inventory is a lack of time management. Manual processes are quite time-consuming and unproductive in the long run. 

Most of the time, employees spend on administrative tasks such as calculations, data inputs, and cross-references. All these tasks can be easily automated, saving your team time and allowing them to focus on more strategic tasks.

Automated Inventory Management

What is Automated Inventory Management? 

Automated inventory management is an automated process of regular inventory management. Unlike manual inventory management, it is more efficient and reduces employees’ time on administrative tasks. 

With an automated inventory management system, you can effectively mitigate fraud or inventory shortage risks, manage successful supplier relationships, and always meet demand. 

Benefits of Automated Inventory Management 

Automated inventory management comes in handy with many benefits. Whether you want to increase your team’s productivity, have accurate inventory data, or reduce costs, you can achieve all of it with a good software solution. 

So, let’s overview the main benefits of automated inventory management systems. 

Time Savings 

Automated inventory management contributes to time savings. Employees do not need to spend hours on administrative tasks such as calculations, PO & invoice data management, etc., as these tasks can be easily automated. It results in greater efficiency among teams and allows employees to focus on more strategic tasks for the business. 

Let’s say you have an employee who spends roughly 4 to 5 hours daily regulating administrative tasks, and then he spends the rest on strategic planning. Meanwhile, your competitor uses inventory management software, so his employee spends 1-2 hours regulating administrative processes and the rest on strategic business activities. 

Based on the information above, who do you think is more productive, especially in the long run? Correct, the company that uses a software solution. 

A company with automated inventory management allocates resources more efficiently. Even though software solutions require initial investment, they tend to bring higher ROI in the long run. 

Increased Accuracy 

With automated inventory management, you can ensure high accuracy of stock levels and other documentation. 

Consider this scenario. If the employee makes a stock availability mistake, it affects the whole supply chain. A simple mistake affects the purchase order data and the final invoice. Finally, all of it results in a business's inability to meet the demand due to lack of necessary stock or, the opposite, inability to store the excess inventory. 

So, when employees manually manage all the data regarding inventory, the data becomes more prone to human error. However, with automation tools, you get increased accuracy and efficiency. 

Improved Decision-Making 

It is worth mentioning that inventory management tools offer potent reporting and analytics capabilities. It allows you to gain actionable insights into the procurement process and make informed reordering decisions. 

Cost Savings 

To enhance spend management and save resources, you must incorporate an automated inventory management system into your procurement processes. It will help you manage stock efficiently and avoid additional warehouse storage fees. 

Besides stock management features, most software solutions also offer spending and budget performance analytics. You can use these features to understand the shortcomings of your budgets and optimize them for the future. Also, you can analyze “business spend analytics” to identify areas where the expenses can be cut. 


An automated inventory management system provides you with greater control and transparency. Businesses gain complete visibility over the stock levels. It allows organizations to analyze demand and supply, understanding which items sell best or worst. 

Improved transparency also results in lower risks associated with fraud. Every document and contract is stored in a database that the assigned users can access at any time. 

So, in short, a centralized database allows for keeping track of documentation and avoiding double payments or overcharges.

Features to Look for

Top Features to Look for in Automated Inventory Management Software 

Software is an investment. Thus, when choosing software to automate inventory management, take into account its features. A high-quality inventory management system must offer features such as automated workflows, real-time tracking, and PO/invoice management tools. 

Well, let’s take a look at how each of these features will benefit your organization. 

  • Real-time tracking capabilities will allow you to ensure optimal stock levels to meet demand efficiently. 
  • PO and Invoice management tools will help you efficiently manage purchase orders, reorders, and timely payments. In the long run, it will contribute to improved supplier relationships. 
  • Workflow automation. This feature will allow you to automate and optimize inventory management for better results. 
  • Multi-level management. When choosing software, make sure it offers multi-level management to assign users different roles and permissions. It will contribute to better management. 

Best Automated Inventory Management Software 

Finally, let’s briefly examine one of the best software solutions for automated inventory management. 

Tradogram offers all the features necessary for successful inventory management. For instance, it offers a stock-level feature with which you can cut through clutter and focus on essential products. Other features of this software include the following. 

Real-time Tracking 

Tradogram offers potent tracking capabilities for real-time stock tracking and management. With this tool, you can assess inventory levels from anywhere at any time. 

Personalized Re-order Points 

Tradogram offers a reorder system that allows setting reorder points for each stock item. You can also set automated notifications when quantities drop below a certain threshold. This feature helps you efficiently meet demand and avoid inventory shortages. 

Seamless Multilocation Management 

When your organization’s stock is distributed across different locations, management becomes increasingly difficult. However, Tradogram offers multilocation management capabilities to ensure smooth supply chain management. 

With this feature, you can seamlessly manage your stocks across various warehouses and effortlessly control the logistics of item transfers. 

Enhanced Visibility and Control 

With features such as product focus, manual adjustments, and stock bookings, Tradogram gives you enhanced visibility and control over your inventory. 

You will be able to track essential inventory items by setting product focus and ensuring that all the necessary items are always in stock. Also, the stock booking feature lets you easily book in received items to update your inventory. 

Workflow Automation 

It is worth mentioning that Tradogram offers customizable workflows to automate POs and invoices. 

This feature allows you to create approval workflows for invoices and POs to speed up the procurement process. 

Contract Management Tools 

Tradogram also offers contract management tools that allow you to ensure supplier compliance with the negotiated conditions. 

Contract management is crucial when it comes to inventory, as you want to ensure that the agreed costs and terms are met when placing new POs and reorders. 

At the end of the day, Tradogram offers a variety of valuable solutions for efficient inventory management. 

Automate your Inventory Management Today 

If you want to mitigate risks and ensure smooth supply chain operations at all times, then you are in the right place. Tradogram is an all-in-one procurement platform that offers a powerful Inventory Management Solution. 

Features of Tradogram range from tracking and analytics to automated workflows to streamline business processes. Check out all our features and contact us to learn how we can help your business.

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