Tracking inventory levels, orders, Sales and deliveries, creating 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. It is often associated with and is similar to distribution software, as distributors that can compete with less cash tied up in inventories and have a distinct advantage over their competitors