Real-Time Inventory Management: Definition, Benefits & How To Choose Software

Real-Time Inventory Management: Definition, Benefits & How To Choose Software

Real-time inventory management is an important aspect of optimal retail operations. We provide 7 software solutions to help your business.

With real-time inventory, retail brands like yours can track and optimize their stock levels in real time.

How? By always knowing how much inventory you have on hand to meet customer demand. With this information, you can streamline your decision-making process.

For instance, if you see an SKU running low, you can replenish it long before a stockout happens.

But how does real-time inventory even work? What are the benefits? And how do you choose the right real-time inventory management systems? Let’s find out.

What is real-time inventory?

Real-time inventory refers to your actual stock levels and their location at a given time.

To better respond to customer and supply chain needs, brands optimize their retail inventory management processes to automate the way they track, update, and manage SKU levels.

However, keeping tabs on your real-time inventory is easier said than done.

Most retail brands use real-time inventory management systems that help them leverage real time information to inform their operational decisions (as opposed to the manual process, which relies on periodically updating spreadsheets with already out-of-date data).

For example, the popular DTC cookware brand Caraway uses Cogsy to track its inventory in real-time. That way, Caraway always knows what’s in stock, which SKUs are performing best, and where available units are along the supply chain.

Cogsy allows us to have an exact understanding and visualization of what is going on in terms of product availability... Leveraging that information helps [our] team with data-driven internal and external planning to capitalize on all opportunities.
Mark Riskowitz, VP of operations at Caraway

Why is real-time inventory management important?

When brands manually track their inventory, it leaves room for error. And those mistakes can equate to stockouts and overstocking. Both of which cost your brands big.

But with a real-time inventory process, you always know exactly how many units you have on hand and where they are in the supply chain journey. This makes optimizing inventory levels (so there’s not too much or too little) easier because you only order the items you actually need.

Plus, since these solutions rely on real-time and historical data, you can make more accurate predictions for restocking. That way, you avoid ordering slow-moving SKUs or seasonal items that rack up holding costs and may turn into dead stock.

All that’s to say: Having real-time inventory ensures inventory accuracy and helps you avoid common inventory mistakes. And as a result of cutting costs, you improve margins, boost revenue, and free up more cash flow.

What are the benefits of having a real-time inventory process?

Real-time inventory has big benefits, including avoiding stockouts, optimizing inventory levels, improving customer satisfaction, and more. But ultimately, these benefits can be translated into increased inventory accuracy and on-demand access to inventory management KPIs (AKA, more inventory control).

Avoid stockouts

Real-time inventory management systems constantly monitor your stock levels. And the best solutions will even notify brands long before they run out of stock.

These alerts ensure you always replenish inventory at the right time. That way, you can place production orders with plenty of time to offset supply chain risks and avoid stockouts.

This alone is a huge benefit for retail brands because stockouts mean lost revenue.

Crossnet recently shared that stockout on their 2nd bestseller for a few weeks cost the brand $250k. Worst part? With real-time inventory, they could’ve spotted that the SKU was running low and avoided missing out on this revenue.

Optimize inventory levels

By definition, real-time inventory management provides full visibility into your stock levels and each SKU’s performance. With this information, reducing excess inventory and optimizing your inventory levels becomes easy.

Say you see demand drop off for a product. A real-time inventory management system will automatically calculate the optimal inventory level based on this new demand.

Have more units than this calculated optimal inventory levels?

No worries. Because you identified this challenge immediately, you can quickly spin up a marketing promotion to strategically increase demand for this product.

That way, you protect your profit margins by proactively eliminating dead stock and avoiding unnecessary holding costs.

Improve customer satisfaction

Real-time inventory ensures that customers have a transparent view of what you actually have ready to purchase. This improves the customer experience by eliminating buyers’ risk of browsing (and falling in love with) out-of-stock items.

And since real-time inventory management systems alert brands when inventory levels are low, you’re much less likely to sell out. That means you can fulfill orders faster (or instantly pivot to selling on backorder to avoid overselling).

For example, when customers browse products on Caraway, they see an accurate depiction of which items are available for purchase. And they have enough units of their most popular SKUs to fulfill demand.

How? Because Cogsy is constantly monitoring and updating inventory counts as new sales come in.

And since it provides forecasting based on historical data and current inventory trends, Caraway can more accurately predict and plan for upcoming demand to avoid stockouts.

That said, stockouts occasionally happen (typically due to unprecedented spikes in demand or supply chain disruptions).

When they do, a real-time inventory management system helps properly set these expectations with customers by automatically updating the product listing.

Plus, the best systems like Cogsy even enable selling on backorder, so you can capture demand even when you can’t immediately fulfill it.

Gain sales performance insights

Real-time inventory management systems give brands actionable data and detailed reports.

This gives you a better handle on which products are actually driving sales. And when combined with historical data, you gain deeper insight into why they’re driving sales. That way, you can make smarter purchasing decisions based on your findings.

For example, you might learn that a product spikes in demand due to seasonality. However, since that demand won’t last forever, you strategically hold off on restocking to avoid excess inventory.

The best tools supporting real-time inventory management like Cogsy can identify these trends long before a human data analyst.

Then, the platform automatically adjusts your inventory forecasts accordingly to prevent you from over- or understocking.

What to look for in a real-time inventory management software

Finding the right real-time inventory solution can be overwhelming if you don’t know what features to look for. So, here are the must-have features (spoiler: Cogsy has all 8).

Inventory visibility

At its core, real-time inventory is about having real-time inventory visibility. AKA, the ability to see exactly how much stock you have and where it is at any given moment.

For instance, Cogsy’s operations platform integrates all your data from multiple sources to show you what products are doing around the clock.

This way, you can pull practical insights that empower you to make more informed purchasing and forecasting decisions.

Support omnichannel operations

Brands with a solid omnichannel strategy retain 89% of their customers on average. That’s compared to 33% for companies with weak omnichannel strategies.

But to become omnichannel efficient, you need a clear view of every channel’s inventory (and how it performs).

The best real-time inventory software tracks product demand, turnover rates, and shipping speeds across all channels. Or, at minimum, provides multichannel inventory insight.

Replenishment alerts

Having real-time data at your fingertips is helpful. But it does nothing for your bottom line if you don’t reorder at the optimal time. That’s where (and why) replenishment alerts come in handy.

For instance, Cogsy automatically emails replenish alerts as you’re nearing your ideal reorder point. It also factors lead times to ensure you place those orders in time to meet demand.

That way, you proactively prevent stockouts from happening (and keep sales revenue flowing).

Automated purchase order creation

The best real-time inventory software automates tedious tasks and eliminates the need for gut assumptions. This includes automatically creating purchase orders (PO) based on your current inventory levels, historical data, and future inventory trends.

For example, Cogsy streamlines purchase orders by automatically filling out the PO for you.

With only 1 click, the tool creates customized POs tailored to your unique inventory needs (no guesswork required). All you have to do is check the numbers and hit “submit.”

Purchase order tracking

Real-time inventory isn’t just what’s sitting at your warehouse; it’s also the replenishment that is on its way. That’s where complete purchase order visibility comes in handy. With it, you can track your upcoming shipments from the moment you place a PO to when you receive that order.

For instance, Cogsy’s purchase order flow is as simple as clicking a button. Then, once that order is placed, all your past POs are stored in one place.

That way, you get a holistic view of what’s happening with your inventory without losing track of the order details (you can reference them back at any time).

Demand forecasting

As I mentioned before, having data at your disposal is null if you don’t put it to good use. And that includes using real-time insight to make your demand forecasting efforts more accurate.

In other words, the best solutions eliminate guesswork and gut assumptions by factoring in past sales, seasonal trends, and future marketing promotions to predict upcoming demand.

Cogsy makes this possible but takes it further by supporting your demand planning. This tool maps your operational plans for the next 12 months (including any marketing events).

That way, you can provide suppliers with a more transparent view of your needs, easily adjust your plan as new data comes in, and meet all the demand that comes your way.

Accessible data

Advanced reporting makes it clear what your brand needs to do next. But without having access to your data, it’s impossible to plan your next move strategically.

Meaning, the best software makes sense of all your data and provides actionable insights to grow your business better.

For example, whenever Cogsy spots valuable insight within your data, it links that insight to a related action for your team. That way, you can make sense of all your data to make smarter, faster operational decisions.

Cross-organizational integrations

Advanced reporting makes it clear what your brand needs to do next. But without having access to your data, it’s impossible to plan your next move strategically.

So, the best software makes sense of all your data and provides actionable insights to grow your business better (warning: few actually do this).

For example, whenever Cogsy spots valuable insight within your data, it links that insight to a related action for your team. That way, you can make sense of all your data to make smarter, faster operational decisions.

The 7 best real-time inventory management software solutions

We’ve covered what to look for in real-time inventory solutions. Now, let’s take a closer look at the best inventory forecasting software available for real-time inventory management:

1. Cogsy

While Cogsy isn’t technically an inventory management system (IMS), it has many of the same features. For instance, it supports omnichannel operations, PO tracking, and accessible data reports.

But the ops optimization tool takes this one step further. How? By turning your real-time inventory data into actionable insights. That way, you can proactively get ahead of your inventory needs.

Just take Cogsy’s one-of-a-kind planning feature, for example. This feature levels up your forecasting efforts by mapping out operational plans for the next 12 months. It even plays out different scenarios and growth levels, so you know how to respond no matter what happens.

Then, as new information becomes available, it tracks your brand’s actual inventory performance against these plans. This allows the tool to eliminate unlikely scenarios and improve the accuracy of the remaining demand forecasts.

To do this, Cogsy pulls data from the other ops platforms you already use, so nothing gets missed. Plus, if Cogsy doesn’t already integrate with your ops tools, we’ll build that integration for you.

Key features Pricing
Forecasting, demand planning, accuracy tracking, replenishment planning, purchase orders, backorders Starts at $49/month after a 14-day free trial


2. Zoho

Zoho is an inventory management system for autonomous sales, purchase orders, and inventory tracking. With this tool, ecommerce retailers can optimize their inventory and order management processes across multiple channels.

Like Cogsy, this platform allows retail brands to track, manage, and centralize all their sales, purchase orders, and inventory data. That way, you can eliminate waste, cut costs, and make better business decisions.

Key features Pricing
Multichannel sales tracking, inventory planning, purchase orders, 3PL management, backorders Free tier for up to 50 orders/shipments per month


3. NetSuite

NetSuite is an Enterprise Resource Planning (ERP) solution that offers inventory management. Meaning, this NetSuite system helps larger retail brands get a real-time view of inventory levels across their sales channels.

NetSuite is part of a fully-integrated system of finance, human resources, and professional services tools. By connecting all these tools, enterprise brands can reduce inventory costs, improve customer experience, and optimize cash flow.

Key features Pricing
Inventory tracking, inventory visibility, automated inventory management Contact NetSuite for current pricing structures


4. Fishbowl

Fishbowl is a manufacturing and warehousing solution that offers inventory management, material requirements planning (MRP), radio frequency identification (RFID) barcoding, and more. This solution is designed to help small and medium-sized retailers track and optimize inventory automatically.

Fishbowl can be deployed on-site or hosted in the cloud. And it integrates with traditional spreadsheets or popular accounting software.

These features help Fishbowl users automatically sync all their data, calculate their reorder points, and keep less inventory on hand.

Key features Pricing
Barcode printing and scanning, inventory tracking, automatic reorder points, purchase orders One-time payment starting at $4,395


5. inFlow

inFlow is an inventory management system designed to help wholesale, distribution, manufacturing, and ecommerce businesses handle order processing from start to finish.

With over 35 integrations, inFlow provides retailers with a complete pick, pack, and ship support. With inFlow, brands can leverage a real-time view of which products are in stock across multiple warehouses.

Key features Pricing
Barcoding, inventory tracking, inventory management, kitting, order fulfillment Starts at $79/ month


6. Cin7 Orderhive

Cin7 is an inventory management software and Enterprise Resource Planning (ERP) alternative that streamlines retail operations across multiple sales channels.

Equipped with an Electronic Data Interchange (EDI), Cin7 seamlessly integrates with your ecommerce, 3PL, and warehouse management systems. You can then sync this data with Cogsy via the Cin7 Omni integration to gain actionable insights into your inventory data.

Paired with Cogsy, Cin7 helps brands streamline their inventory data, track actual costs, and operate more efficiently as they scale.

Key features Pricing
Inventory tracking, inventory management, forecasting, kitting, and replenishment planning Starts at $299/ month


7. Lightspeed Retail

Lightspeed Retail is a point-of-sale solution that syncs sales and inventory data across channels, so retailers can access that data from anywhere.

Retailers can customize their Lightspeed reports to focus on whatever data they need. This way, retailers have the real-time information necessary to make decisions.

Key features Pricing
Point of sale, accounting and payments, advanced reporting, ecommerce operations Starts at $69/month


Real-time inventory FAQs

  • What is live inventory?

    Live inventory is the actual amount of inventory you have in stock and where it’s located at any given moment. It provides retail brands with an accurate picture of their current inventory situation.

  • How can a real-time inventory system improve customer service?

    A real-time inventory system improves customer service by providing consumers with an accurate view of what you have in stock. And since these tools support better forecasting and purchasing decisions, you avoid stockouts by ordering the right inventory at the right time.

  • Can you track inventory in real time?

    You can track inventory in real-time as long as you have proper SKUs, barcode scanners, and an ops optimization tool like Cogsy in place.

  • Should you invest in real-time inventory management?

    Investment in real-time inventory management is the right step toward making the most of your inventory. Because it enables you to purchase the right amount of stock at the right time (preventing stockouts) and make more accurate predictions (avoiding dead stock). These costly mistakes cut your profit margins and boost revenue once eliminated.