What Is ERP Inventory Management? Enterprise Resource Planning (ERP) inventory management is a system that allows businesses to manage all aspects of their business on a single platform, including: inventory, finance, planning, logistics and operations.
How does ERP help in inventory management?
ERP helps businesses make better decisions by providing accurate inventory data. ERP inventory management systems enable businesses to control their logistics, operations, finance, and inventory from a singular system reducing errors and improving efficiency.
Planning replenishment orders
Inventory management allows you to properly plan your replenishment orders. Your inventory quantity must be accurate so when the signal to buy or make more is received, you have confidence that you need to take action. Your ERP inventory management system allows you to categorize parts which helps easily order the right quantity. One item is ordered only when there is a specific demand in exactly the quantity to meet the demand. Another item is ordered when at a lower cost and easily procured. Your goal here is fewer transactions so you order enough to satisfy all the demands seen in the next three months. Optimizing replenishments means fewer transactions and that leads to better inventory accuracy.
Benefits of ERP inventory management
The potential advantages of ERP inventory management are far-reaching:
There are huge time-saving implications of using an ERP inventory management system. Managing operations using a centralized system not only cuts down on double-handling but also allows for automation of daily tasks. This translates to increase production and more accurate output in less time.
Every business owner knows that efficiency equals cost savings. Rather than paying for segmented resources or systems to handle different parts of the business, ERP inventory management systems handle many working parts simultaneously, reducing overall workload and minimizing expenses.
Supply chain transparency
A growing number of businesses are using shipping providers or 3PLs to outsource their shipping and logistics requirements. An ERP inventory management system enables you to integrate with external partners to ensure all systems communicate with each other. Stock, order and shipping information is therefore synced across the entire supply chain.
Accurate data collection and reporting
With key updates on stock, orders, and customers in a single location, ERP inventory management enables quality data collection. Most systems will also allow you to create and save custom inventory and sales reports to track business performance and plan for growth.
Enables business expansion
ERP inventory management systems are designed to reduce manual labour, by automating and streamlining processes – all of which goes hand-in-hand with growing a business. If scaling up locally or expanding internationally is on your radar, an ERP inventory management system can provide the space and freedom you need to grow.