The inventory management process has by tradition been highly dependent on people. Important details like work in progress, stock in hand, and other vital inventory management information were recorded on paper, filed in bulky folders that went into filing cabinets piling year after year. Such practices tend to increase the range of human errors. It also made it even harder to have transparency in the process of inventory management. Sadly though many companies keep using these outdated practices.

But the question still remains, is an ERP system beneficial in inventory management? But before we answer, let's look at ERP management. Shall we?

ERP Inventory Management

For you to augment your company’s inventory management, having an ERP solution is important to help give you a centralised view of the entire inventory. By integrating ERP solutions in inventory management your business will have a competitive edge. This can be achieved through the proliferation of the firm’s abilities to effectively plan its production, executing distribution predictably and also decreasing overheads which include overtime labour costs as well as errors incurred due to manual reconciliation processes.

Here’s a look at 5 key benefits of incorporating an ERP solution in your business’ inventory management process:

Having an organised inventory management process will not only help a business save on time by ironing out production bottlenecks, but it also helps in cutting down costs by better planning its inventory. An improved inventory system might also lead to increased customer satisfaction. Also, integrating an ERP solution in inventory management means your business has better productivity as well as improved efficiency in your warehouse and on your shop floor.

Under production and overproduction are both detrimental for any company. Thus to help control its costs, it’s important for a company to readily have the right mix and amount of inventory. In particular, when dealing with perishable goods, the inventory management system must work as planned. Using ERP solutions let you plan the production process properly and replacement needs. It also ensures that the recorded inventory quantities are always accurate thus making your buying decisions error-free.

Today, many companies like aggregators and online retailers work with third-party supply chain businesses to replenish their inventory levels as well as coordinate customer shipments. For this to work effectively, their inventory management system should have an ERP system that keeps track of the firm’s inventory cycles and production. Additionally, the system must also be able to coordinate with different suppliers as well as third-party logistics systems.

The growth of any business means its inventory management process is growing as well. For this reason, you’ll need an ERP solution which grows with the levels of your business operations. Having an ERP solution for managing your inventory ensures growth occurs without you incurring costs for adding substantial amounts of hardware and systems. Use of ERP solutions allows you to expand into new markets, increase your customer base or even introduce new products.

Stocktaking in all stages of production forms a crucial part in your financial reports. This could be finished goods, raw materials or work in progress. All kinds of inventory carry a financial value that has to be accounted for. Use of ERP systems promotes accuracy in your company’s annual reports as well as in filing your tax returns. Thus, an ERP solution will ensure that the value recorded in your books matches the physical value held in the warehouse.

In closing, an inventory ERP solution will offer your company the necessary information for when you are making informed decisions by using the real-time status of the available inventory. Since it’s a real-time system, you will have the best visibility to all your suppliers and supply chain partners, thus it’ll ensure that your financial reports remain accurate and up-to-date at all times.