ERP software can be used in many different contexts. After accounting, more than 60% of users say that inventory management is the feature they most frequently use.
In addition to ensuring optimal stock levels, inventory management assists businesses in organizing and planning their manufacturing strategy.
Maintaining ideal stock levels helps to free up working capital. It reduces stock-out losses and encourages the most effective use of valuable working capital.
The newest emerging technologies, such as machine learning, data analytics, artificial intelligence, and cloud computing, can help manufacturers and distributors improve their inventory management. Using proven inventory management techniques like ERP systems, supply chain design, and planning helps leverage your stock.
What is an ERP system?
The term “enterprise resource planning” (ERP) refers to a category of software that businesses use to handle routine operations including accounting, purchasing, project management, risk management, and compliance. Enterprise performance management software, which aids in planning, budgeting, forecasting, and reporting an organization’s financial results, is also a component of a full ERP suite.
ERP systems enable data to flow between various company operations and connect them all. ERP systems ensure data integrity with a single source of truth while removing data duplication by gathering an organization’s shared transactional data from several sources.
Benefits of ERP system in Inventory Management
ERPs carry out six main inventory-related tasks. These consist of:
- Increased forecasting precision:
Companies can create a solid plan to grow or decrease inventory and storage capacity to suit predicted market conditions by analyzing historical and current data.
- Creating more intelligent warehouses:
Warehouse managers may design an operational warehouse plan with access controls at every level thanks to modern ERP. For manufacturers with several production sites, this is especially important.
- Classifying, clustering, and segmenting supplies:
Data must be accessible to other divisions to assist the entire company and offer insights. Companies may tag, cluster, and analyze each item or stock-keeping unit using the inventory management feature of an ERP.
- Enabling accurate and timely inventory planning
The ERP systems of today include tools for planning material requirements (MRP). This includes setting up reorder levels, production schedules, and minimum and maximum inventory levels.
- Monitoring returns and order cancellations
ERPs manage returns more easily than earlier techniques. ERPs combine accounting and sales credit memos, enabling businesses to send new products or issue refunds.
How ERP optimizes Inventory management
Inventory is maintained because a reserve is necessary to counteract the fluctuations in demand and supply. Organizations need to maintain some raw materials or components in stock to provide products to clients due to supply-side constraints including large manufacturing batch sizes and supplier delivery lead times.
Inventory management is the process of keeping the proper quantity of inventory on hand to satisfy both currents and predicted future demand. It is impossible to get something correctly the first time because it involves numerous people, procedures, logistics, warehousing, and other factors. The procedure can be very time-consuming without the right technology in place.
What kind of inventory to be kept should be determined and adjusted via inventory management. In addition, the issue is that more inventory should be retained as raw materials or work-in-progress the more variable the demand. Trying to buy less inventory is problematic since a lack of understanding of inventory needs might result in lost sales or stock shortages.
How can we help you with your business’s inventory management?
Large Inventory
The integrated inventory functionality of ERPNext makes managing batched items simple. The batch manufacturing dates, ending dates, and other information are maintained in its real-time outlook of product accessibility. With the help of the camera on your mobile device, you can quickly scan product barcodes to quickly browse the inventory and draw a conclusion based on data.
Standardized stock
To enable the unique identification of units for new stock, ERPNext UAE will automatically generate serial numbers. Even better, for a hassle-free search across your whole supply, you may scan product barcodes using the camera on your device.
Planning for material resources
To match work orders with sales or material requirements, ERPNext will display every MRP function. Additionally, you can monitor the quantity of sequential or batch records that you use to control costs and prevent resource waste.
Capacity Planning
Your workspaces are improved by capacity planning depending on the resources available for active manufacturing orders. Specifically, create a capacity plan to identify and remove bottlenecks on the shop floor. With ERPNext Dubai’s assistance, you may keep track of and manage planning schedules for a specified amount of time.
Multiple measurement units
Want to precisely measure your materials? With ERPNext You can set conversion characteristics in the master itself enabling smooth sales, purchases, and stock exchanges.
Quick stock balancing
Quickly access stock balance reports to complete stock audits and confirm warehouse stock for warehouse management. With any device, just scan a barcode to commence counting.
Renewal of stock
With ERPNext’s assistance, you can eliminate the out-of-stock situation. Moreover, you can learn the stock level by keeping an eye on an item’s reorder level. ERPNext will automatically produce a material request by replacing inventory at the correct time and reducing the likelihood of stock collapse.
Item variations
ERPNext for the manufacturing sector saves the main item as an item template and each variation as an item variant. For each item version, it keeps any feature, including color and form.
Subcontracting
Do you outsource any of your company’s operations to a dealer? The ERPNext subcontracting tool makes it simple to distribute raw materials and manage activities. Additionally, the cost of the raw materials and hired services are used to determine the value of the finished goods.
Conclusion
An ERP system assists manufacturers in making better decisions by providing precise inventory data from a single system that increases productivity. With the aid of ERP, businesses may automate the tasks required for stock acquisition, stock organization, and stock transfer to occur simultaneously. The system incorporates the requirements of the workers, clients, and suppliers to ensure adequate stock levels.
A data-driven approach to inventory management forms the foundation for quicker and better decisions in the new normal. Moreover, process improvements alone won’t be enough to do this. Technology investment is also necessary. The technology includes systems that automate and streamline inventory management as well as solutions that offer real-time tracking.
