Meet Canary7
The Definitive Guide to Automated Inventory Management

When you think of inventory management, do you think of
boring spreadsheets with rows upon rows of incomprehensible data? Don’t worry, there’s no spreadsheets with Canary7!

Meet Canary7
The Definitive Guide to Automated Inventory Management

When you think of inventory management, do you think of
boring spreadsheets with rows upon rows of incomprehensible data? Don’t worry, there’s no spreadsheets with Canary7!

If that is the case, then you haven’t heard of automated inventory management.

Automated inventory management, at even its most basic level, is a business’s best bet when it comes to handling its inventory and maintaining its stock. This is not only because it makes things more efficient, but simply because it takes a great burden off the shoulders of you and your workforce, which ultimately means that your manual efforts can be used in other areas where they are particularly needed. 

In this guide, we will discuss more of what automated inventory management is, why it is important, how businesses can benefit from it, and how you can implement automation in your inventory. 


  • What is Automated Inventory Management 
  • Automated Inventory Management Best Practices
  • Automated Inventory Management Software

What is Automated Inventory Management?

Starting off the very basics of it all, what is automated inventory management? 

As the name suggests, it is an automated form of inventory management. It allows businesses to automate their inventory processes, so that their stock can be managed in real-time, without the hassle of doing anything manually. 

By automating almost everything, such an inventory management system can greatly simplify workflows for everyone involved in the supply chain, and hence, is a wonderful time-saving instrument. It also helps you decrease the workload of your labour, which means improved employee retention and satisfaction within your organisation.

Essentially, automated inventory management is the means of optimising your inventory and distribution process. Whether it is order invoicing, customer tagging, backorders, inventory counts, or other components of fulfilment, an automated inventory management system can help you get everything sorted. 

However, the best thing about inventory management systems is not that they are multi-dimensional. What this means is that a good automated inventory management software does not only help you with inventory management and stock handling, but also streamlines other aspects of the supply chain such as warehouse management, warehouse control, order management, labour management, and even more! 

An automated inventory management software replaces outdated methods like spreadsheets and manual logs by an intuitive, easy-to-learn interface. We could even go as far as to say that automated inventory management takes the tedious bits out of inventory management and actually makes it fun – and for warehouse and inventory managers, there is no better possibility than this!

Automated Inventory Management System: How Does it Work?

To be fair, there is no rocket science that goes into making an automated inventory management system work. It is essentially the most common way most modern retailers, manufacturers, and suppliers keep track of their stock, organise their inventory, and analyse their sales. 

Ask anyone who has been in the warehousing and inventory sector for a long time, and they will tell you what a blessing automation is. This is because back in the day, warehouse operatives had to actively keep an eye on the stock and make manual records of everything. And yes, you guessed it right: that is a boring, incredibly time-consuming process. 

The fact that automated inventory management replaces these methods with a system that employs specialised software to do the hard parts of inventory management is truly remarkable, and marks a very important shift in the future of fulfilment and warehousing. 

Time to look at two different scenarios to better understand how automated inventory management works:

Let’s say that you are a clothing retailer with a newly launched web store. You don’t have automated inventory management yet and are relying on manual inventory methods – but these are still manageable and going great since you are a small business. Luckily, your products are selling like hotcakes – especially a particular puffer jacket. Your customers don’t seem to get enough of it, and soon this product becomes your bestseller. You get orders for this jacket from all over the world! However, you soon realise that you don’t have enough stock to fulfil all the orders you took, which is rightfully infuriating for your customers. This seemingly small hiccup causes great detriment to your business – both in terms of sales and in terms of reputation. 

For the second scenario, let’s presume you are in the same business as above, but instead of relying on manual inventory management, you choose to go for an automated inventory management system. The second you start running low on your product, your system notifies you so that you can make a quick purchase and stock up on it. In fact, if you have it configured the right way, the inventory management system can even make the order for you. Anyway, what this leads to is successful fulfilment for all your orders. Everyone from you to your customers including your warehouse operatives and inventory management staff is happy; so it’s a win-win situation for all. 

See the difference automation can make? It allows you to minimise the discrepancies in your supply chain, and by taking the burden on itself to do almost everything, the software allows you to sit back and focus on other areas of your business that may need attention.

Benefits of an Automated Inventory Management System

At this point, you probably have an idea of what the general benefits of an automated inventory management system are. To improve this understanding, let’s have a look at each of these benefits one-by-one, in turn.

Automated Inventory Management - Time-efficient

1. Time-efficient

As a business owner, you probably already know that time is money, and hence not even a second of it should be wasted. Think about it: do you really need to spend hours on end to do something that can simply be achieved by automation?

Automated inventory management systems help you save time by updating inventory information automatically, regularly, and with precision. After you implement automation across your inventory, you have to never worry about stockouts, overselling, or underselling your products ever again. More importantly, you are left with ample time to refine other operations, and that is truly a rare occurrence in this field. 

2. Increased visibility

An automated inventory management system can help you make your processes considerably more visible. This is because the technology used in an automated system will help you track your inventory in real-time. By making sure that you are completely in touch with your inventory activity 24/7, an automated inventory management system allows better access to your workflow. 

Visibility is very important when it comes to inventory management, mainly because it equips you with accuracy and accuracy is the key to successful business handling. More visibility means more accuracy, which ultimately means that you can provide your customers with much better services.

Automated Inventory Management - Increased visibility
Automated Inventory Management - Less miscalculations and errors

3. Less miscalculations and errors

No matter what the nature of your business is, mistakes, miscalculations, and certain discrepancies are a part of the game and hence should be embraced to a certain extent. However, this doesn’t mean that you should completely succumb to them and not do your part in ensuring that you are properly avoiding them. And you can do exactly that by relying on automated inventory management. 

An automated inventory management system will help you considerably minimise stock miscalculations. Because an automated inventory system knows when you’re running low on stock, it can automatically replenish your levels and ensure that there is no space for miscalculation or human error. With top-notch technology and features that boost accuracy, an automated inventory management system can also help make order management a breeze, and make sure that your customers get the right orders – exactly on time! 

4. Easier scalability

Every business aims and hopes to grow – whether it is in your local sector, or internationally. However, the prospect of expansion comes with many other questions, particularly the question of inventory management and warehousing. When you expand as a business, what happens to your inventory? Do you have to redo all your logs and records? Do you have to level up in terms of inventory management methodologies? 

An automated inventory management system makes it easier for you to tackle these issues. Not only does it free up your time and allows you to actually put effort into the idea of growing and expanding your business, but it also allows you deal with thousands of transactions every single day and update your inventory in accordance with those. The end result is that you don’t have to think twice before you make the choice to expand your operations, and can cater as many customers you want, anywhere in the world! 

In fact, one of the best things about an automated inventory management system is that it is a great tool for businesses that want to adopt a multichannel sales model. Regardless of whether you are a retailer, manufacturer, or wholesaler – an automated inventory management system can help you explore adding multiple sales channels to your business simply by facilitating you with the kind of tools that can manage a larger workload. 

Automated Inventory Management - Easier scalability
Automated Inventory Management - Better analytics

5. Better analytics

Automation in inventory means that you are introducing yourself to a much better system of analytics and forecasting. Let’s be real: not all business owners are maths geniuses and you shouldn’t have to be! 

An automated inventory management system will introduce you to insights that make it a lot easier for you to make data-backed business decisions. It presents data in a way that is comprehensible and adapts in accordance with the particular needs of your businesses.

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Automated Inventory Management Best Practices

Although most of your processes will be automated and you won’t have to worry about taking the right steps actively, you should still try and make sure that whatever you do for your inventory management results in a positive contribution towards your business. 

In that regard, implement the following best practices in your inventory management strategy: 

1. Use the ABC analysis for inventory categorising.

The first tip to follow for seamless automation in inventory is to use the ABC analysis when handling your stock. At the very basic level, this is an arrangement which puts your inventory into a hierarchy. The most important items are on the top of this hierarchy whereas the least important items are at the bottom. 

So basically: 

  • Items categorised as A are high priority stock. This will include your bestsellers and products that require regular reorders and quality reviews by your team. 
  • Items categorised as B are medium priority yet valuable stock. So, let’s say you have a product that is well-liked but only by a certain segment of your customer-base, and hence only requires monthly reordering. This would be a B product. 
  • Items categorised as C are low priority stock. This is the stock that you basically store on a bulk basis, and is not likely to trigger a reorder very often.

As you can tell, this way of organising your stock can make overall warehousing quite convenient for you! You will be optimising your storage space, and even implementing end-to-end automation will be so much easier for this. 

Automated Inventory Management - Use the ABC analysis for inventory categorising
Automated Inventory Management - Refine your pick and pack process

2. Refine your pick and pack process.

Although you can rely on your automated inventory management system for just about anything, there are certain aspects that require human efforts in order to be executed properly. The pick and pack processes are one such aspect, and you must strategize these procedures if you want to get orders out to your customers on time and efficiently. 

Best practices involving pick and pack processes usually depending on the kind of picking you are going for. The main types include: discrete order picking, zone picking, wave picking, and batch picking. 

However, some general tips that can help you optimise these procedures are: 

  • Place your top-selling items the nearest to the packing station. 
  • Clean and declutter your inventory regularly
  • Use a warehouse management system (WMS) to streamline the pick and pack workflow
  • Check all orders to ensure quality
  • Use barcodes or RFID for easy counting of your orders

Remember: the more efficient your pick and pack processes are, the faster you get your orders out and the happier you make your customers!

3. Establish the right inventory KPIs.

Automation in inventory is great and all, but it can only help your business grow if you track your progress regularly and properly. The best way to do this is by setting certain KPIs for your inventory activity, and then judging your processes against those KPIs. 

This is an important enough practice to be on this list because not only does it help you measure your performance in a particular area over a specific amount of time, but it also helps you minimise the guesswork and make decisions based simply on facts. 


Automated Inventory Management - Establish the right inventory KPIs

When it comes to what KPIs you should be judging yourself against, it really depends on your business operations. However, some of the best and most effective KPIs for inventory management would be: 

  • Stock to sales ratio
  • Sell through rate
  • Weeks on hand
  • Inventory turnover rate
  • Back order rate
  • Days to sell inventory
  • Time to receive
  • Put away time
  • On time orders
  • Shrinkage
  • Average inventory
  • Rate of returns
  • Cost of carrying inventory
  • Inventory write-off
  • Inventory write-down
  • Rate of inventory turnover
  • Cycle time
  • Order status and tracking
  • Fill rate

As hard as these look to achieve – they aren’t as long as you are employing the help of an automated inventory management system. 

Automated Inventory Management - Implement an accurate reorder point formula

4. Implement an accurate reorder point formula.

Stock problems are the worst problems that a business might have to deal with inventory. Specifically, having too little of stock on hand when you actually need more can be a nightmare. But it doesn’t have to be!

This might sound a little complicated to begin with, but once you get the hang of it, you will see how this is essentially one of the best tips on the list. A reorder point formula is a tool to find out approximately when to order more stock. It tells you when you have reached the lowest amount of inventory, and can therefore help you order more stock in time. 

This formula will help you consistently order the right amount of stock every month. 

(Average Daily Unit Sales x Average Lead Time in Days) + Safety Stock = Reorder Point.

With the help of this, you can finally stop letting market spikes get to your business! Moreover, even when you are relying on an automated inventory management system, this particular formula can prove to be handy and can help you make sure that you consistently order the right amount of stock and that too at the right time.

5. Carry safety stock for emergencies.

Life is unpredictable. For a business operating in the 21st century, even more so. For this reason, it is always better to stay on the safe side and have safety stock available in the case of an emergency. Safety stock is a small amount of surplus inventory that is kept on hand in order to guard against ups and downs in the market, and to prepare you for any highs and lows that you might encounter in that regard. 

Safety stock is very important. If you fail to have a certain amount of safety inventory at hand, you may experience a lot of detriment. For example, you could have to deal with loss of revenue. Loss of customers due to you not being able to fulfil all the orders you get on time is also a possibility. You might even experience a loss in market share! 

Automated Inventory Management - Carry safety stock for emergencies

Therefore, it is always better to be safe than sorry and have some surplus stock lying about. This way, you can protect yourself against unexpected spikes in demand, prevention of stockouts, a buffer for longer lead times, and compensation for any forecast-based discrepancies you may be facing. 

However, remember that having too much of safety stock isn’t great either, and you should always tap into your automated inventory management system to ensure.

Automated Inventory Management - Reduce your inventory

6. Reduce your inventory. 

Yes, reducing your overall inventory is another best practice that we urge you to implement in your inventory management strategy! Even if you have an automated inventory management system to take care of everything, you still need to think of keeping as little inventory as possible. 

What’s the reason behind this? 

Well, for the most part, it’s because keeping and managing your inventory can be quite expensive. Most businesses have to spend a lot of money to streamline their inventory, and the biggest reason behind that is that they have a little too much on their hands. 

Reduce your inventory by lowering lead times, eliminating obsolete stock, and executing better inventory forecasting for the best possible inventory management experience. 

Automated Inventory Management System Software: Canary7

Hopefully, you now know why it is so important to get rid of your manual processes and work instead with an automated inventory management system. It will not only bring more efficiency to your processes, but also strengthen the position of your business that gives you an edge over your competitors. 


However, in order for it to actually work in your favour, you have to make sure you are picking the right automated inventory management system – which is Canary7. Offering a range of features, Canary7 makes sure to automate all your processes and make them a lot more contributive towards your success as a business. 

Canary7 is the best, most customer-centric automated inventory management system you can integrate in your warehousing and inventory processes. Not only can you reap all the benefits of automation in inventory that we just talked about, but you can also configure our solutions in ways that actually help your business grow. 

Canary7 is an automated inventory management system designed to equip businesses of all sorts with the kind of technology that helps them refine their fulfilment procedure, build better customer relations, and expand their operations across borders. 

To that end, we provide you with not only fully automated inventory management tools, but also software solutions that can help you with warehouse management, warehouse control, order management, and labour management. 

By prioritising end-to-end automation for all these solutions, we ensure that our customers can rely on us and find the time to focus on other areas of their business. We also facilitate every single procedure within your warehouse with unrivalled accuracy, so that you can data-backed choices with as little room for discrepancies as possible. 

Canary7 helps you bring your entire warehouse together, and create an experience that is easy for you to create but at the same time leads to customer satisfaction. Speed, accuracy, and organisation are just some of the elements that Canary7 is designed to introduce to your workflow! 

Running your business is hard, and managing its inventory even harder – but Canary7 can change that. Book a free demo today and see for yourself!