Case Study: How we built an Inventory Management System for eCommerce business

As the Internet has become more accessible globally, the eCommerce sector has increasingly evolved. Moreover, the rise in the use of mobile devices worldwide has contributed to the growth of eCommerce as well. According to recent stats, retail e-commerce sales worldwide has reached up to 3.53 trillion US dollars in 2019. With that in mind, a lot of traditional brick-and-mortar stores started migrating to the eCommerce space. Not only do they sell products online, but they also provide their customers with fast and secure payment options. As more products are being sold online, it’s imperative for e-commerce businesses to know where their products are, organize them effectively, and understand when to reorder to stop fulfilment problems before they happen. Here is where an inventory management system comes into play. Let’s find out more details below!

What exactly is an inventory management system?

An inventory management system is used to manage the volume, diversity, pricing, and location of available products. Not only does it help you track the products throughout your entire supply chain, but you can also monitor orders, picking and packing, shipments with a simple click, and be in the know when it’s time to replenish products. In addition to that, you can easily integrate it with another third-party solution such as an accounting system, purchasing system, and even ERP or CRM software.

What are the types of inventory management software you can use in business?

As you may know, a wide range of businesses from logistics providers and freight forwarders to online merchants can use inventory management software. However, each organization has certain specifics and needs a different type of inventory management system. Here you can find out the following types of inventory management software:

• Warehouse inventory management system (WIMS): logistics companies use it to manage the warehouse operations to be sure that all items can be found quickly.
• Manufacturing inventory management system (MIMS): used to store raw materials and finished products, as well as help factory managers, maintain balanced levels of both types of inventories.
• Retail inventory management system (RIMS): used to build and maintain an effective supply chain that is a foundation of any business related to selling goods.

Why do you need an inventory management system for your eCommerce business?

Inventory management is a good practice for any e-commerce business. Not only does it help you keep everything on track, but it will also help you eliminate potential inventory errors. Let’s take a closer look below at why you need an inventory management system:

• You tend to improve the accuracy of inventory orders.
• You need to speed up the order fulfillment process while keeping customers happy.
• You need to drastically improve e-commerce efficiency and productivity.
• You need to keep track of which products you have on-hand to meet the customers’ needs fast and easily.
• You need to manage batches and expiry dates.

What’s the idea of the project?

Having vast technical experience in delivering a variety of software solutions for different business verticals, we can turn any idea into a successful and actionable software solution. If you are running an eCommerce business, an inventory management system will be a way out for you. Moreover, if your business grows fast, having inventory management in place is extremely important, especially if you sell online and your customers expect to see a product's availability and status at every point in the buying process. Not only can you keep fast-selling products in stock, but you can also re-stock them immediately. With that in mind, we have developed an inventory management system based on the client’s request and taking into account business specifics.

The development process of the inventory management system

Let’s take a look at the development process of the inventory management system below:

Team

When developing the inventory management system, we needed the following team of specialists:

• 1 Business analyst (BA)
• 1 Project manager (PM)
• 2 UI/UX designers
• 4 Front-end engineers
• 2 Quality assurance engineers (QA)
• 4 Backend engineers

Methodology

When working on the inventory management system, we opted for Agile methodology taking into account the following factors:

• Our team adapted to the potential inventory system to any change in the client’s requirements.
• The team focused on the client’s needs over the requirements in the development plans.
• Results were more important for both the team and the client than established processes.

Taking into account key components of agile-driven development, we implemented 24 sprints during which the development team developed and implemented an inventory management system into the client’s e-commerce business.

Development Process

Firstly, the Business Analyst conducted a meeting with the client and stakeholders to clarify the problem they were trying to solve using an inventory management system. Once the Business Analyst collected all the essential information about the business processes, potential users, their actions and location, the team was able to identify key features for the potential project. Not only did we define the roles of the users such as a sales manager and an administrator, but we also came up with the following features:

• inventory control
• barcode scanning capabilities or integrations
• order management
• fulfillment tools and optimization
• order and stock history
• reporting and analytics
• shipping and tracking

There were 24 sprints and the development lasted 12 months. Before each sprint, the whole team of designers, front-end and back-end engineers, QA engineers reviewed which features from the backlog they worked on and committed to some result by the end of each sprint. Demo sessions allowed us to give feedback and discuss with the client any possible change to the backlog which would help to maximize project value. Once the inventory management system was free of bugs, we launched it and collected real-world users’ feedback. Not only did it help us polish and upgrade the system, but we also made improvements to meet the client’s expectations.

Project Structure

Here you will find the technologies that could be used when developing an inventory management system:

User Roles

Let’s discover the user customization that provides certain privileges and grant access to the inventory system features and functionality. There are two key user levels within the inventory system: Sales Manager and Administrator. However, you can create more user roles if there is a necessity.

• Sales Manager: a user who can register in the inventory management system and has basic permissions within the inventory management system - view, edit, create, and delete items/customers/sales orders/invoices, etc.
• Administrator: This role is assigned to owners or partners who can manage every aspect of the inventory management platform and create user roles by defining access levels and permissions within the inventory system.

Sales Manager Dashboard

Once you log into your inventory account, the first thing you’ll see is the Dashboard. It is a home page that gives you a clear picture of the company’s sales, stock summary - top-selling items, the sales orders you have generated so far, etc. Also, you will see the following options in your main menu:

• Listings
• Inventory
• Orders
• Shipments
• Sales Channels
• Reports
• Notifications

Listings

With the Listings feature, you can monitor all the listings within your sales channels integrated from Walmart, Shopify, Etsy, eBay, Amazon marketplaces, etc. The listing summarizes information about the item you are selling and draws the attention of potential customers interested in that type of item. The listing description highlights the most essential product aspects so that customers can buy it.

Inventory

With the items feature, you can see all the products that you are selling or services that you are rendering to various clients and that can be purchased from various sales channels such as Walmart, Shopify, eBay, Etsy, Amazon marketplaces. With the New button, you can create a new item or groups of items. Only by clicking the New item button, New Item Groups, or New Composite Items (two or more items and/or services) will you be directed to a new page to fill up the item details.

Orders

By clicking on the Orders feature in the main menu, you will be redirected to the Orders page. Here you will see a table that includes the following columns: Order#, Customer Name, Total amount, Date, Delivery Deadline, Status (paid/not paid), Product Availability (picked, expected, not available), Delivery (packed, not shipped). With the ‘+New’ icon placed on top of the purchase order window, you can create a new purchase order or export it with the export icon.

Payments

With the Payments option, you can view all the information about the items ordered. Not only can you fulfill customer orders in a more streamlined way, but it also helps you process payments or verify checks automatically. On this page, you can see a table with the following columns: Customer Name, Order#, Date, Status (submitted, received, completed), Total amount, Actions.

Shipments

With the Shipments feature, you can review all the information about the items/product ordered. Thanks to a great number of shipping service providers, you can get shipping rates, ship your packed products to your customer, track the shipments and manage your deliveries from the inventory system with a simple click.

Sales Channels

With the Sales Channel feature, your sales orders are automatically generated in the system for an unfulfilled sale made in any of the channels such as Walmart, Shopify, eBay, Etsy, Amazon marketplaces. All the inventory will be automatically updated across all the online sales channels that you are integrated with. Not only can you see all the items presented in the sales channels, but they are automatically synced with your inventory management system.

Reports

With the Reports feature, you can unify inventory data from all your channels into a single report. Not only does it help you grasp at a glance how your eCommerce business performs, but you can also make data-driven decisions and make changes in e-commerce strategic monitoring, planning, and inventory.

Admin Dashboard

Only by logging in to the inventory system as an Administrator, you will discover the following hub of navigation such as Users, Listings, Inventory, Shipments, Sales Channels, Finance, Reports, Integrations, and System Settings. Let’s take a look at the features that are different from the Sales Manager module.

Users

With the Users feature, you can see all the people registered in the inventory management system. Not only can you grant full access to a module, but you can also configure users’ permissions. Moreover, you can create your own user roles and define their access levels/permissions if you need more extended roles such as Accountant or Supervisor.

Finance

You can reach the Finance feature from the corresponding option in your main menu. With this feature, you will better understand the ins and outs of your inventory. Here you can see the following tabs:

• Orders
• Payments
• Invoices
• Bills

Integrations

Only by clicking on the Integrations feature in the main menu can you land on this page. With this feature, you can bridge and integrate a variety of third-party solutions into your inventory management system - from shipping service providers and payment gateways to marketing applications. This gives you a better reach to the customers and new markets as well.

System Settings

The System Setting feature can be reached from the corresponding option in the main menu. Not only does it help an Administrator set up rules and restrictions, but he/she also can define users' access levels and permissions within the inventory management system in a jiffy. If all the settings within the inventory management system work for you, you don’t need to change them.

Key features of the inventory management system

Defined below are the key features of the inventory management software:

• Stock Management: with this feature, you can monitor stock movements from one location to another in one click.
• Procurement Management: with this feature, you will be sure that all items and services are properly acquired so that inventory processes can proceed efficiently and successfully.
• Supplier Management: with this feature, you can store all complete information related to suppliers and easily find them if there is a necessity.
• Shipment Tracking: with the shipment tracking tool, you can easily track items sent to customers.
• Inventory Reporting: with this feature, you can view complete analytic data regarding volume, diversity, pricing, and location of available products and make better business decisions.
• Barcode scanning: with this feature, you can easily identify, track, and label your products.

Also, you can read about: How we've created the Transportation Management System (TMS)

Benefits of the inventory management system for your business

Let’s take a closer look at what benefits an inventory management system can bring to your e-commerce business:

• Thanks to the inventory management system, you can discover the availability of your products and find their location with a simple click.
• Not only can you process orders, but you will also be able to track couriers through the inventory management system.
• You will be able to keep track of the stock availability and make sure it is always at an adequate level. Moreover, you will be notified once your inventory is running low and needs to be reordered.
• You can properly manage your inventory to keep customers happy and optimize your warehouse space.
• By integrating automation into your inventory management processes can you save time, money, and other resources.

How to choose an inventory management system for your eCommerce business

Selecting any solution for your business is a daunting and difficult task. Moreover, choosing an inventory solution is more complicated. At the very start, you need to think carefully about the following:

• If there is a situation when you have oversold a product/item on your e-commerce website
• If there is a situation when you have accounted for your inventory management costs
• If there is a situation when you spend too much time on manual processes related to your inventory
• If there is a situation when you have received negative customer feedback.

Only by going deep into each bullet point can you be armed with the underlying explanation for your system and identify the features and functionality that meet your e-commerce business needs. With that in mind, you need to look through the software providers available, read reviews, narrow down your choices, and make a wise decision. Unfortunately, not all systems offer all the essential features out-of-box. In this case, you need to find a reliable tech provider that can develop and implement an inventory management solution based on your unique needs and business requirements. You need to carry out comprehensive testing to judge the platforms correctly, and it’s probably the best way.

Bottom line: Is your e-commerce armed with the inventory management system?

Unfortunately, the stock outages, incorrect product listing and lack of business insight are just a few of the major headaches that your e-commerce business may face. Moreover, staying organized throughout every step of the procurement process is becoming more complicated. An inventory management system is here to stay. Not only does it help you cut down on delays and errors in your inventory, but you can also rapidly reshape the way all your e-commerce business processes are conducted. Only by automating the more time-consuming tasks can you free up resources on more value-added tasks. We, at DDI Development, can help you bring your idea to life - develop a robust inventory management solution that will drive your business growth and revenue. Don’t hesitate to drop us a line for more details.