Inventory management software is a software system for tracking inventory levels, orders, sales and deliveries. It can also be used in the manufacturing industry to create a work order, bill of materials and other production-related documents. Companies use inventory management software to avoid product overstock and outages. It is a tool for organizing inventory data that before was generally stored in hard-copy form or in spreadsheets.
Inventory management systems track goods through the entire supply chain or the portion of it a business operates in. That covers everything from production to retail, warehousing to shipping, and all the movements of stock and parts between.
Practically, it means a business can see all the small moving parts of its operations, allowing it to make better decisions and investments. Different inventory managers focus on different parts of the supply chain—though small businesses are usually more interested in the ordering and sales end of the chain.