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Carlee – Hi everybody, this is Carlee and you’re listening to the Business Advantages with Custom Software Podcast, the show that helps businesses achieve more with software. Today we’re answering the question should I build an inventory management system? I’m here with the president of Tornado Technologies, Mark Roshon, and the general manager, Tom Loya. Mark, why might someone want to build an inventory management them rather than buy one?
Mark – Well, thanks Carlee. Yes, there are a lot of very nice inventory systems out on the market at different price points, different levels of functionality and there’s certainly nothing wrong if something fits what you’re trying to do. But there are a few reasons why somebody would want to build their own system, a custom-built system, whether it’s for a competitive advantage or just saving money. And I’ll explore a couple of those. The first one is just the most obvious, which is there’s nothing that fits your workflow. You have a specific workflow that you’ve honed over the years and you know that’s the best way for you to operate. And you cannot find an inventory system that matches that. You want a tool that’s going to help you do things more efficiently the way you want to do them and you don’t want to have to change the way you do work just simply so you can use the software. If that’s the case, that’s kind of a no-brainer that you’re going to have to build something to match the way you do things. But the second one here is not quite as obvious and that would be to save money.
Mark – And I know some of you might be scratching your head saying isn’t custom software more expensive? Not necessarily a big driver for software or the cost of software development is really the number of features and the level of complexity. And these inventory packages, inventory management systems, they’re written to accommodate thousands of companies and this could really drive up the complexity and i.e. the development cost. And if you’re simply developing software just for one company and perhaps even a few feature sets, it actually could be quite cost effective. Let me give you an example. I know a company that had a very large warehouse and they just stored all kinds of things that they may store it and then not pull it back out for a year later, a couple of years later. And they really just wanted to track where that was stored. So they wanted a very quick and simple way that when they stored it in the warehouse they could record where it was, have it be in the database and forget about it. Then maybe a year later somebody needs it and they want to just find it very quickly and just see where it was stored.
Mark – They don’t need the on hand quantity and reconciliation and all the management tools and things that many packages have. They just needed that tracking and finding ability, something like that has a very narrow set of features. It’s just for one company. That’s something that can be developed quite cost effectively. You could save a lot of money and it could be a one time fee. It’s not the ongoing month after month after fees that a lot of these packages charge that it’s a never ending fee even if your needs don’t change. Another way of customization or why you might want to build something is you’re simply customizing an existing package. It’s not really an either or buying decision. You can actually take a purchased package that you like many features of it, but perhaps you’re going to customize just one portion of it, not the whole thing. Tom, can you give us an example of how someone might want to customize just a portion of a purchase package?
Tom – Sure. Sometimes a purchase package will provide the ability to forecast inventory. But often this forecasting doesn’t do a good enough job and it only ties in the information it knows about. A great example to enhance this is to tie in with an ordering system where we can look at a certain inventory and find out how much of that inventory is scheduled to be produced or be used with upcoming orders. And then with the forecasting, we can use that number to come up with a better forecast instead of one based on some historical information. We’re actually doing it based on actual future usage and we have a better forecast number.
Mark – Oh yeah, it’s a great example. What about mobile? I know a lot of people are concerned about whether or not they could use a mobile device or what have you.
Tom – Well, everybody has a mobile device these days, so it only makes sense to leverage the power and convenience of these devices by using an existing mobile device. We can write a simple app that can run on somebody’s phone and we can use that instead of using the perhaps hardware of an inventory system that is normally really expensive. And we can not have these hardware costs by using these mobile devices. And with these mobile devices, it would give us the ability to push notifications to perhaps a plant floor manager. If there’s some kind of issue, maybe a specific inventory item is just running out or is dangerously low and the production floor manager needs to know immediately. And an existing inventory system doesn’t have that push notification. We can actually leverage the mobile phone to push these.
Mark – Oh yes, I could see where a lot of people would love to have the notification out on the floor like that. Thanks Tom. I want to say also that integration is something to consider or actually not consider is really what I mean to say. And what I mean by that is all businesses have multiple systems. I mean, not only inventory, they’re going to have accounting systems, perhaps CRM systems, operational systems, website, all kinds of things. And there’s a need to have them talk many times to each other. And many times I see people make purchasing decisions simply because that system may already have a connector. For example, they say, oh, we went with this inventory system because it already had a connector for our accounting system and that’s great. If that’s already in there, that’s great. That’s icing on the cake. But I would not make my decision based on that connector being there or not being there. First and foremost, you want the best inventory system for you and to do the things that you need to do. What you need to really understand is integration can be done in just about any system, especially nowadays.
Mark – Most systems, modern systems have things called APIs, which are application programming interfaces and that just allows one computer to talk to another or one application to talk to another. And what that means is it’s easy to add integration after the fact you need your system to talk to the accounting. It’s easy to get the data from point A to point B and make that happen. And so just whether or not the connector is there, that’s great, but certainly don’t let that be a primary driver. So I think that’s a number of things to consider in whether or not a custom built system would be right for you or would help you and give you an advantage.
Mark – Now back to you, Carlee.
Carlee – Thanks for listening to Business Advantages with Custom Software podcast with your hosts, Mark Roshon and Tom Loya. We hope you enjoyed our insights into building an inventory management system. If you’re keen to learning more about custom software, join us next week when we’ll be talking about why custom software gives you a competitive edge. As always, you can head over to our website Tornadosoft.com to learn more, as well as to check out all the links and resources in the show notes. That’s all for this episode, folks. See you next time.