There’s a common script to the story of inventory management systems adoption for growing companies. As the number of orders and SKUs climb, so does complexity and opportunity. Handling that volume as it scales is something that outstrips the abilities of QuickBooks and Fishbowl, and, more to the point, the Excel spreadsheets that the inventory manager or analyst is using to try to make it all work.

The proverbial last straw is the resulting lack of reliable and real-time visibility into the movement of inventory. This prohibits an accurate forecast of demand across the warehouses in which that inventory is stored in and the places where people buy it.

But by adopting the right inventory management system at the right time, that story can play out with great success. For instance, in just a year since implementing NetSuite inventory management functionality, one manufacturing company has been able to handle 50 percent higher volume while only increasing working capital as it relates to inventory by 10 percent.

Automated and efficient inventory management that protects against overstock, projects demand to avoid stock outs and positions the business in the best manner for optimal cash flow is a growth enabler.

Let’s look at how implementing inventory management systems contributed to the growth of businesses across three industries.

Inventory management systems transform wholesale distribution business

After 35 years in business and two generations of ownership, wholesale packaging distributor Bensenville, Ill.-based Action Health made the tough decision to divest of its retail gift supply business and focus on the more lucrative health care packaging space.

Action Health’s strategy involved embracing the new low-margin reality in which health care institutions operate. To do that profitably, it vowed to reduce costs in the supply chain and pass along those savings, and that journey began with effective inventory management. Action Health has seen an 85 percent improvement in inventory accuracy measured by change in the average error rate of cycle counts, which it reduced from around 3.5 percent to 0.5 percent.

Automated inventory management provides a foundation for business-differentiating services, such as same-day-shipping and billing, and allows the business to pass on savings. Efficiencies in inventory management have contributed to a 40 percent gain in revenue per employee and sales growth of 18 percent in its first year of implementation, shattering its historical growth rates of 2 percent per year. Employee productivity has improved by 20 percent.

To compete in challenging retail environment, inventory management systems a must

Angling for the attention and space on the shelves of the world’s largest retailers is often the biggest challenge a small retail distributor faces. For Oakland, Calif.-based e.l.f. Cosmetics, automated, efficient inventory management processes enabled it to compete with much larger brands. As evidence, in just a decade since its founding, the company has flipped its chief revenue stream from online, B2C sales of its cosmetic and skin care products to B2B sales with Walmart, Target and other retailers, including online marketplaces like Amazon.

This wouldn’t have been possible with its existing spreadsheet-based inventory management and a (very) loose integration with legacy ERP software. With a real-time source of inventory and procurement data, the business has streamlined transactions with its China-based manufacturing partner, optimized stock levels and invoicing processes and can ensure on-time delivery across B2B and B2C channels.

To manage multiple sales channels, a manufacturing and retail business leverages inventory management system

Point6, a maker of high-performance socks for outdoor activities like hiking and running, struggled to get a clear view of inventory in its on-premises Microsoft Great Plains business system. Efficiently fulfilling orders across retail partners at hundreds of US locations, distribution partners worldwide and its ecommerce site involved frequent troubleshooting and workarounds.

Now, with a robust and integrated inventory management system, Point6 uses real-time reporting to drill into product sales by variations and customers, fueling better business decisions. Transactions with its retail and distribution partners are simplified, fulfillment is more efficient, and a single view of all B2B and B2C customers has improved customer service. Point6 prepared for fast growth with an inventory management system that could scale.