What is Automated Inventory Management? (Quickstart Guide)

Taking care of stock manually can’t keep up with automated inventory management. Manually updating an Excel spreadsheet (or multiple sheets) to track your purchase orders, inventory levels, reorder points and more in order to forecast demand to then deal with stockouts and overstocks in season is a waste of time and can hurt your profits. That’s why it’s essential — especially if you’re managing multiple sales channels — to use inventory automation.

To understand why, you need to know what automated inventory management is, how automated systems work, which features to look for and the benefits of automated inventory management. Use this article as your guide.

Table of Contents

What is Automated Inventory Management?

Automated inventory management can help streamline your inventory planning, forecasting, reordering, reporting, purchase order management and more. It reduces errors, saves time and simplifies workflows. Using inventory optimization software to automate repetitive tasks leaves you more time to concentrate on growing your business.

How Do Automated Inventory Management Systems Work?

Inventory automation supports many areas of your business from shipping to storage to sales. Automated inventory management systems work by connecting with your data sources, processing relevant reports and completing repetitive tasks. For example, if a SKU (stock keeping unit) reaches a predetermined reorder point, your inventory planning software will send you an alert or even complete the reorder for you.

The best software seamlessly integrates with your sales channels, demand sources and warehouse management systems (WMS), like Shopify, Amazon FBA, Google Analytics and ShipHero to reduce manual oversight. It’ll analyze data for you, support retail demand planning and continuously improve the best practices of your business.

7 Benefits of Automated Inventory Management

When you make use of automated inventory management, you quickly see the benefits:

1. Save Time and Money

Manual processes are time consuming. With automated inventory management software, updating spreadsheets manually has become a thing of the past, stock counts are updated in real-time so you always know as soon as a product has been sold or delivered to your warehouse. This gives you time to focus on growing your business and reduces labor costs.

2. Reduce Human Error

Humans are great but we all make mistakes. Although no software is perfect, the best inventory automation doesn’t get tired, skip steps or forget to complete a process because there’s a holiday. Of course, automated software isn’t perfect and relies on human inputs but if you can reduce human error, you should.

3. Better Inventory Visibility

Real-time visibility is one of the biggest inventory automation benefits. With old reports, tracking inventory can become a guessing game. You might not replenish at the right time, causing stockouts and worse still, you might accept orders for stock you don’t have. If you can see exactly what you have on hand at any given time, you can make better inventory forecasting and planning decisions.

💡Pro Tip: Take advantage of Singuli’s detailed Reporting & Analytics to create a forecast that meets the strategic needs of your business.

4. Improve Demand Forecasting and Inventory Planning

Accurate demand forecasting and inventory planning are much easier with automated inventory management. With the right software, you can use its ability to predict future sales, avoid stockouts and reduce overstocks. This is another way of saving money as both stockout costs and carrying costs are expensive.

📌Get Started: Every product has its own story. However your products are growing, whenever there’s a change, Singuli’s forecasting models will identify it and adapt accordingly.

5. Increase Customer Satisfaction

One of the biggest stockout costs is lost sales but a more detrimental problem is lost customers. If you don’t have enough inventory to provide for your customers, they’ll find a business that does. Automated inventory management helps you keep on top of your stock so you can provide your customers with what they need, when they need it. It also makes it easier to communicate with customers on the rare occasion that something does go wrong as you’ll have real-time information.

6. Efficiently Scale Your Business

As your business grows, your inventory management tasks grow too. You have more stock to look after, more customers to satisfy and more suppliers to collaborate with. The best automated inventory management software takes these changes in its stride so you can efficiently scale your business.

7. Launch New Products With Confidence

New product forecasting is even more of a challenge than general forecasting as you don’t have any historical data. The best automated inventory management systems change all of that. They consider performance marketing, similar product attributes and any other relevant data to make sure your next new product launch is a successful one.

Inventory Automation Features to Look For

Comparing inventory optimization and automation software can feel overwhelming, but if you know what features to look for, the process becomes much easier. Start with this list:

Advanced Demand Forecasts

There are numerous demand forecasting methods. You could use the weeks of supply formula (WOS) or software that does demand forecasting for you. The best inventory planning software considers the most important aspects of your business, seasonality, trends, spikes in demand, size curves, performance marketing and any other relevant data before making any predictions.

📌Get Started: Seasonal trends change all the time so make sure you’re planning for them with Singuli’s Advanced Forecasting.

Reporting and Analytics

You need to know what’s going on in your business and your reporting and analytics need to be easily digestible. The right software produces ABC analysis reports, safety stock reports and custom reports so you can analyze every aspect of your business inventory.

💡Pro Tip: Get a holistic view of your inventory data with Singuli’s Reporting & Analytics. Track not only inventory data, but also marketing, promotions, site traffic, historical sales and customer behavior. You’ll have all of your information in one place, ready to use in inventory forecasting and planning.

Purchase Orders and Shipments

If your business needs to split purchase orders (POs) into several shipments and track them, if you need to track landed costs or if you want to know who’s making changes to your POs, you need software that can do all of that for you.

📌Get Started: Track exactly who did what and when they did it with Singuli’s Purchase Orders & Shipments. Every change is linked to a user and logged automatically.

Automate Replenishment and Reorders

Being able to automate replenishments and reorders means you’ll always have enough stock to cover demand, you won’t have to worry about suppliers with varying lead times and you can easily manage size curves. All this makes your life easier and improves the customer experience.

📌Get Started: Optimize your inventory levels and reduce overstocks. Use Singuli to replenish the right amount of stock at the right time so your inventory costs stay low.

Omnichannel Inventory Automation

Inventory automation and forecasting from one location is great but if you have multiple locations, you need to streamline them. Omnichannel inventory automation is a key feature to look out for. Even if you don’t have multiple locations now, this feature could be important as you scale your business.

💡Pro Tip: Use Singuli’s real-time, channel-aware forecasting to maximize sales in every location.

Seamless Integrations

Whether you need to integrate with sales channels, ERPs, demand sources, your WMS or whatever software you use to manage your business, it’s important that your automated inventory management system works with it. Make sure your software has seamless integrations for your preferred platforms.

💡Pro Tip: Stay connected across demand sources, sales channels and inventory tracking with Singuli’s Seamless Integrations.

The Future of Inventory Automation: Trends to Watch

What’s happening with inventory automation? These are the trends we’re watching:

Artificial Intelligence and Machine Learning

You’ve seen ChatGPT and Bard but artificial intelligence (AI) is capable of more useful tasks than writing sonnets in the style of Shakespeare. Machine learning (ML) allows the best software to understand a business’ inventory system and to evolve its understanding over time. As AI continues to evolve, your inventory automation will too. Forecasting will become more accurate, decision making will become easier and identified system weaknesses will be turned into strengths.

Data Analytics

As a business grows, it collects more data. The best software can analyze relevant data to make efficiencies in your business. For example, it can show products that are commonly purchased together so you can put them next to each other in the warehouse or it can compare different suppliers’ lead times.

Cloud-Based Software

Cloud-based software is getting better all the time. As businesses continue to move towards more hybrid working and staff who are working from home, employees will need to access their information from anywhere. Cloud-based software also helps with omnichannel inventory management as each location’s data can be accessed from a central point.


The Internet of things (IOT) means many modern devices are connected to your network so that everything can interact. This means your scanner will connect to your computers, which will connect to your servers, your loading bays, your equipment and even some of the stock.

Supply Chain Speed, Efficiency and Reliability

As well as connecting all your systems through IOT, AI and ML, automated inventory management software can connect directly with your suppliers so you can stay up-to-date with changes in lead times, problems with stock or unexpected spikes in demand. The best software already links to multiple suppliers to make sure your supply chain is fast, efficient and reliable.

Automated Inventory Management for Your Business

Now that you know what automated inventory management is, why it’s important and the most important features to look for, you’re ready to pick the right software to help optimize your business’ inventory.. Remember to choose software that scales with your business.

Get the All-in-One Inventory Planning Software

Forecast demand, issue and track POs, re-order on autopilot, and step up your reporting game across multiple channels and locations. Get in touch to see how Singuli can help you optimize your inventory.

Automated Inventory Management FAQ

What are the 4 Types of Inventory Management?

Just-in-time management (JIT), materials requirement planning (MRP), economic order quantity (EOQ) and days sales of inventory (DSI) are the four types of Inventory Management. You need to choose the best style for your business by assessing each of the pros and cons.

Why Do We Automate Inventory Management?

Automating inventory management can help you save time and money, reduce human error, improve demand forecasting and streamline replenishment and reorders.

Can Excel Be Used for Inventory Management?

Excel can handle basic inventory management and planning for small businesses, but it’s not ideal for medium or large sized inventory. You can save time and avoid losing money due to human error with the right inventory optimization software.

Get the All-in-One Inventory Planning Software

Forecast demand, issue and track POs, reorder on autopilot, and step up your reporting game across multiple channels and locations. Get in touch to see how Singuli can help you optimize your inventory.

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Who is Singuli
We’re a multidisciplinary team of engineers, ph.d. researchers and data scientists with decades of retail experience.
Benjamin Kelly, Ph.D
CEO & Co-Founder
Thierry Bertin-Mahieux, Ph.D
CTO & Co-Founder