Meaning of Merchandise Management System

A merchandise management system is a model that depicts the flow of goods in a company’s business process. The term merchandise management system is mainly used in connection with company software for logistics and scheduling. This article goes into more detail about what an inventory control system is, what functions it has and what properties it has.

The functions and properties of a merchandise management system

According to Sportingology, ERP systems relate to several areas:

  • Sales: With the help of the merchandise management system, this creates the offer, then the order, then the delivery note and finally the invoice. There are extended functions, for example the order confirmation, the workshop order, the warehouse issue receipt and customer tracking. The external collection of data for the benefit of the field service is also available. The purpose of all sales functions is to conclude a valid sales contract.
  • Purchasing: This needs the functions of the merchandise management system to determine requirements as well as for ordering. With the help of the sales data and storage , it is possible for a merchandise management system to automatically determine order proposals or to trigger an order.
  • Warehousing: This monitors the company’s internal inventory management with the help of the merchandise management system. So that it is possible to transfer all movement data into the warehouse management in a fully automated manner, warehouse management software is available as an integrated component for the merchandise management system. The inventory is also supported.

Advantages of a merchandise management system

A merchandise management system has many advantages and can therefore make a decisive contribution to the company’s success. We show you some of them in the following list:

  • Time savings ↳ when creating invoices, orders and offers
  • Data maintenance
    ↳ user friendly and neatly in a system
  • Compatibility
    ↳ Warehouse management of several warehouses
  • Transparency
    ↳ real-time evaluations
  • Discovering
    potential for optimization ↳ Arranging the range, shortening storage routes, etc.

Highest possible transparency through real-time evaluations
Assortment optimization based on daily updated statistics (sales distribution per product etc.)

Possible components of a merchandise management system

There are a few other components that can be part of an inventory management system, for example:

  • POS interfaces
  • Commission accounting
  • Creation of catalogs such as online shops
  • Time tracking
  • Time management
  • Financial management
  • Branch administration
  • Data exchange via interfaces
  • Data evaluations

Various merchandise management systems

There are integrated, closed and open merchandise management systems. A merchandise management system is closed when all the modules mentioned below are integrated:

  • Incoming goods module
  • Goods issue module
  • Ordering and disposition module
  • Output of order proposals and planning aids
  • Monitoring and order writing
  • Management information module

If one of these modules is not available, the inventory control system is referred to as a so-called open inventory control system. The term integrated merchandise management system is used when all of the above components are integrated and there are still connections, for example to market research institutes, suppliers or banks.

ERP systems separated from merchandise management systems

There is no clear transition between ERP systems and inventory control systems . A differentiation is usually possible via the range of functions. If, for example, components and functions from the areas of materials management and controlling are included, this is no longer really called a merchandise management system, but an ERP system.
The application software of a merchandise management system is based on databases that manage the movement data and master data in a specific database structure. Customers, goods, suppliers or parts lists, for example, are managed in the data records; this is the master data. The so-called movement data, the goods and the money transactions are then recorded in separate data records in relation to this.

When to introduce a merchandise management system

Without question, an inventory management system is a success factor for a company. This is because it ensures full warehouse management. If a company uses an inventory management system, the inventory is known at all times. For example, order picking using a scanner is useful. All products are then recorded. With many systems it is possible to manage several warehouses at the same time in order to always have an eye on the current stock. It is also possible to post bookings directly in the system with the help of a connected cash register system or an electronic shop. Companies can also evaluate which products are selling and how well in order to optimize the range. So that the merchandise management system actually offers added value.

The tax submission requirement for a digital tax audit

There are currently no judicial decisions as to whether documents from a merchandise management system are to be submitted. If a trader has more records than he needs to have, he does not have to give them out. However, there is an obligation to submit the data if the data is used to update a continuous inventory or is evidence of so-called partial value depreciation. Nevertheless, the tax office may not estimate if the entrepreneur refuses to hand over such documents.

ERP systems

Finally, a few words about the ERP systems already mentioned. These are business software solutions to control business processes. With their help, various resources of a company, for example means of production and capital, are managed and controlled as well as possible. ERP systems are used in various operational areas. On the one hand, they can be designed holistically, but also for a specific area. The tasks that they perform are diverse. In doing so, they provide information and process it further. In this way, workflows are not only made significantly easier and automated, but the company also saves time, costs and expenses.

ERP software for different areas of the company

ERP software is found in very different areas of the company, some of which are named below:

  • Finance: This is where accounting, risk management, budgeting, the creation and evaluation of analyzes are supported.
  • Merchandise management: This is where procurement, warehousing, needs assessment, order processing and evaluation are supported.
  • Research and Development: This is about supporting knowledge management, project appraisal, budget control, resource planning, etc.
  • Sales: ERP software also supports order processing, quotation control, price management and much more.

So there are many areas of companies that can be supported with the help of ERP software. In times of the Internet, other models are sometimes integrated into the software. It is the size of a company that determines the software requirements. Most of the time, small and medium-sized companies do not have any modules to integrate controlling and accounting.

Why could a merchandise management system be important to me?

A merchandise management system (also WWS or WaWi) is an IT application system. It maps the quantities and values ​​of goods of a trading company and controls them on the basis of this data. Several company departments work together.

Merchandise management systems ensure that all trading processes run smoothly. They relieve and support all areas of the company that have to do with the flow of goods: the warehouse, purchasing and scheduling as well as production and sales.

The system fulfills a wide range of tasks:

  • the posting of goods receipts,
  • the recording, monitoring and optimization of warehouse movements,
  • checking invoices,
  • writing offers and
  • handling the shipping and maintaining customer relationships.

Where are merchandise management systems used?

The merchandise management system is mainly used in trading companies. Possible trading partners are end customers (B2C trade), corporate customers (B2B trade) and institutions (B2A trade). They all concentrate on the exchange of goods without processing or processing these goods themselves. Occasionally, however, the goods are refined, repackaged or put together into a sales package by the trading partners.

For the important core tasks relating to the procurement, storage and sale of goods, you need high-performance, IT-based inventory control systems. They are the prerequisite for ensuring that the right goods in the right quantity arrive at the right place at the right time.

Conclusion: A merchandise management system maps the flow of goods in business processes

A merchandise management system is therefore a model that depicts all flows of goods in business processes. This EDP-supported model has now almost become mandatory for companies of a certain size. With the help of such software, it is possible for companies to be able to constantly call up current data in all areas. A merchandise management system is built on a database that manages all master and movement data. This includes, for example, customers, suppliers, goods and parts lists. A merchandise management system can be a success factor for a company. It saves money, time and effort when properly customized for the company.

Merchandise Management System