Traditionally the inventory management process has been highly people dependent. Vital details such as stock in hand, work in progress and other significant inventory management details were documented on paper, kept in bulky folders, and stored in filing cabinets year after year. Such practises increased the scope for human errors and made it impossible to have transparency in inventory management processes. Many companies continue to use such archaic practices.
To augment inventory management, an inventory management ERP solution can be deployed to gain a centralised view of the inventory. This integration of ERP with inventory management offers a competitive edge to the business by proliferating the firm’s capabilities to plan production effectively, execute distribution predictably and minimise overheads such as overtime labour costs and errors associated with manual reconciliation.
Here are 5 significant benefits of integrating an ERP solution with the inventory management process:
Over production and under production can both be detrimental to a company. To keep costs under control it is essential to have the right mix and the right amount of inventory in hand. Especially when the product is perishable in nature, inventory management must work on schedule. Inventory management ERP solutions allow you to properly plan your production and replenishment needs. It ensures that at any point of time the recorded inventory quantity is accurate so that buying decisions can be error-free.
Supply chain transparency
Off late many companies such as online retailers and aggregators are using third party supply chain partners to refill their inventory levels and coordinate customer shipments. To do so effectively, the inventory management system must be integrated with an ERP solution that not only tracks the firm’s production and inventory cycles but also coordinates with suppliers and third-party logistics systems. For instance, when a supplier sees your company’s fluctuating inventory levels, it can ensure their product is available at your warehouse as and when your customers need it.
Accurate financial reporting
Inventory in all stages form an essential part of your financial reports. Be it finished goods, work in progress or raw materials, all types of inventory have a financial value which must be accounted for. Inventory management ERP systems ensure that your annual reports and tax returns are accurate. With an ERP solution, you can be sure that the recorded value in your books will match the physical value in your warehouse.
Organising inventory management processes not only helps you save time by smoothening out production bottlenecks but also helps you cut down costs through better inventory planning. Better organisation can lead to improved customer satisfaction. ERP integration with inventory management translates into improved efficiency and better productivity in your warehouse as well as your shop floor.
As your business grows so does your inventory management process. You need an ERP solution that grows along with the scale of your operations. Inventory management ERP solutions ensure growth without adding a substantial amount of hardware or system expenses. An ERP solution gives you the freedom to enter new markets, introduce new products, or expand your customer base.
Finally, an inventory management ERP solution offers your organisation the flexibility to make informed decisions based on your real-time inventory status. Being real-time provides the best visibility to your supply chain partners and suppliers, and ensures that your financial reports are always up to date and accurate.