by Carol Stigum | March 11, 2024

What Is Inventory Integration and How Can It Benefit Your Business?

You know how important inventory management is to your business. You need an accurate account of how much stock you have and where your stock is located. However, unless you integrate your inventory management system with point of sale, accounting, shipping, and supply chain systems, you may be getting an incomplete picture.

What is inventory integration?

Inventory integration is the process of connecting and synchronizing your inventory management system with other systems, particularly accounting systems and other back-office systems, such as order fulfillment. You not only want to have enough inventory, but you want to have the right inventory to meet customer demand. You also want to provide your supply chain partners with a transparent and up-to-date picture of your inventory. And of course, you want to provide accurate reporting of your inventory in your financial reports and to the government.

4 benefits of inventory integration

Inventory integration can make you a more adaptable business, better at responding to the changing needs of your customers.

Some benefits include:

• Automation: You don’t want to waste time manually updating various systems. Automation can ensure that you restock when your inventory reaches a predefined threshold, preventing stockouts. In addition to the increased efficiency, automation reduces the likelihood of errors. You can focus on growing your business, rather than becoming burdened by administrative tasks.
• Optimization: Your customer’s needs change all the time, and you must be able to adapt quickly. In addition, investors want to make sure your working capital and valuable warehouse space isn’t tied up in excess inventory.
• Supply chain visibility: Integrated systems allow you to track your inventory in real time throughout each part of the supply chain. This allows for better decision-making and a quicker response to changes in demand or supply. It also allows for transparency with your suppliers.
• Accurate financial reports: You don’t want guesswork when it comes to your books. Your inventory is a valuable asset, and you want it reported accurately. The best way to ensure accuracy is to integrate your inventory and accounting systems.

4 challenges of inventory integration

Successful integration of your inventory systems comes with challenges, but they can be overcome with careful planning and maintenance. Here are some of the common pitfalls of inventory integration:

• Inaccurate data: Your inventory integration is only as good as the data in your systems. Many businesses rely on manual entry of inventory, which is prone to error. Even after your systems are integrated, they may still require periodic data verification and cleaning.
• System integration and coordination: You may have compatibility issues with different systems communicating with each other or that your systems use different data formats or units of measurement. You may also have increased security concerns as sensitive data is shared across different systems. Your integration solution needs to be from a vendor with expertise in preventing security breaches.
• Inventory visibility issues: Your current inventory system should be able to prevent inventory loss due to lack of visibility. However, integrated systems add another layer of complexity and can lack visibility if the systems aren’t customized for your business workflows. Is your integrated system able to keep track of inventory in multiple warehouses and update it in real-time? Do all your suppliers in your supply chain have visibility into your inventory?
• Costs: There can be significant upfront costs involved with integrating inventory with other systems, including software and training.

6 use cases for inventory integrations

All aspects of your business benefit from insight into your inventory, including in-person and eCommerce sales, financial reporting, warehouses, shipping, customer relations, and marketing. These are some of the systems that can be integrated with your inventory software.

• Point-of-sale (POS) software: Integration of your inventory with POS software, such as Square or Shopify, is important if you have physical stores and is critical if you sell online as well. You want to track your inventory in real-time and ensure that your online platform reflects current inventory levels. With POS software integration, you can even trigger automatic reorders when inventory reaches a certain threshold.
• eCommerce software: If your business is strictly online, and you use popular eCommerce tools such as Shopify or Squarespace, you’ll still need accurate reporting of your inventory. Nothing is more frustrating for a customer than checking out, only to find that the product is no longer available, or isn’t available in a sufficient quantity. And if you use different platforms for online sales, broadening your customer base, you’ll want each platform to reflect the current inventory.
• Shipping software: With shipping software such as ShipStation integrated into your inventory system, you can streamline your fulfillment processes and keep customers up to date on their orders. Businesses can also automate order processing, resulting in faster delivery and fewer errors. Shipping integration also means more streamlined returns and inventory updates, resulting in higher customer satisfaction.
• Warehouse management systems: While many inventory systems also contain a warehouse management component, larger enterprises with complex supply chains and multiple warehouses may require two separate, integrated systems for more granular control over inventory and warehouse processes.
• Customer Relationship Management (CRM) software: Integrating your inventory software with CRM software, such as Salesforce, allows for better customer service, improved order accuracy, better inventory planning, and more effective marketing campaigns based on past purchases.
• Enterprise Resource Planning (ERP) software: ERP systems such as SAP S/4HANA are used by large businesses to track financial data, human resources, manufacturing, and the supply chain. Integrating your ERP system with your inventory management system allows for more streamlined operations. Integration improves accuracy in inventory reporting without the worry of manual errors. You’ll have more transparency between different departments, who will be able to make informed decisions using the latest inventory data available.

Discover CData Arc

CData Arc can simplify your inventory system’s integration with the other business systems you rely on. CData Arc provides no-code, end-to-end solutions for integrating your inventory applications with POS, eCommerce, CRM, and ERP systems. Since CData Arc connects over 85 different applications and over 300 data sources, it can integrate your inventory system with a variety of software critical for your business. CData Arc even includes a library of prebuilt industry workflows to get your systems integrated quickly.