Once upon a time, the task of inventory management was done on paper, kept in manila folders, and stored in filing cabinets by the dozens. To make matters more complicated and time-consuming, periodically, the folders would need to be sorted and reorganized to make room for new files. Obtaining an accurate picture of inventory numbers was difficult because human error must be factored into the final count.
With the addition of enterprise resource planning (ERP), inventory management is faster, easier, and more accurate. ERP allows businesses not only to track operations, logistics, and costs related to management aspects but also to obtain instant and up-to-date information about their inventory, allowing them to better meet customer needs and demands.
By using the available tools and features, organizations can transform their ERP inventory management. Changes organizations may notice include:
- Better management of surplus inventory;
- Superior product tracking;
- Management of external inventory; and
- Data in real time.
How Your Inventory Management Will Be Transformed
How will ERP transform your inventory management? Here are just a few ways.
Surplus Inventory Management
Regardless of the reason for your surplus inventory, an ERP inventory management system will help you discover it, and then determine your next steps. The sooner you find the surplus, the more options you have for what to do next: returning the items, contacting current customers to offer repeat orders, or offering discounted sales to use up the surplus. A delay in locating and dealing with your surplus inventory could result in a big loss for your business.
Superior Product Tracking
Knowing where your package is and when it arrived is important: It can mean the difference between a successful delivery and paying for a replacement product because of a lost or stolen package. ERP inventory management allows you to use bar codes to track inventory, from purchasing to sales as well as packing and delivery confirmation. In addition to ensuring product delivery, bar codes are useful for product warranties. Using ERP product tracking helps you ensure that your inventory isn’t only accurate in your warehouse but also when it leaves.
Management of External Inventory
In the days of the traveling salesman, the distributor knew his clients by first name, knew who ordered how many of each item, and who needed more product at a given time of year. Today’s businesses are much larger, more numerous, and move more quickly. Distributors can no longer keep track of all the information on their own. ERP gives distributors the edge they need in today’s business environment.
Traditionally the middle man, distributors receive a large quantity of product from manufacturers, which they then distribute to various retailers in the quantities ordered. By using an ERP inventory management system, distributors know not only their own inventory but also the inventories of their customers. ERP allows distributors to manage their external inventory, helping them determine when to plan deliveries to customers as well as when they’ll receive deliveries from the manufacturer. In addition, if a distributor manages inventory based on consignment, ERP inventory management helps them track which merchandise belongs to a given client.
Other Benefits of ERP Inventory Management
In addition to the aspects of ERP inventory management that can transform your business, there are many other benefits, including:
- Improved organization of overall inventory;
- Elimination of errors in data entry;
- Increased efficiency in inventory rotation;
- Increased stock room productivity;
- Saved time (decreased overtime);
- Money savings (increase profits);
- Higher employee satisfaction; and
- Increased customer satisfaction.
Gone are the days of pen and paper inventory management. You no longer need to clear a week on your business calendar “to do inventory.” With ERP, your inventory is updated as an order is fulfilled and shipped. ERP will help you to transform your inventory management, saving you time, money, and space. It’s safe to get rid of those filing cabinets now.
Author: Carma Haley Shoemaker
