The Ultimate Guide to ERP Inventory Management
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Enterprise Resource Planning (ERP) inventory management is a system that allows you to control all your business operations, including inventory, finance, planning, and logistics.
In this article, you will learn everything you need to know about ERP systems, from the benefits of implementing them to actionable tips for success. We’ll show you how an ERP solution can help you make informed decisions about inventory, streamline your operations, and enhance customer satisfaction.
Key takeaways
- ERP inventory management can streamline your inventory tracking by consolidating it into a single, centralized system.
- ERP inventory management gives you real-time visibility into your inventory levels, supplier performance, and product movement.
- ERP inventory management simplifies financial reporting, helps you make informed decisions, and improves financial performance.
- Using ERP inventory management can lead to happier customers thanks to order management and customer relationship management (CRM) tools.
How can ERP inventory management help your business?
ERP inventory management solutions can help you scale your business and keep customers happy. Here’s how:
Better inventory tracking and accuracy
ERP inventory management can help you streamline inventory tracking by consolidating it into a single, centralized system. This allows you to monitor and manage your inventory levels (from procurement to sale) in real time to improve inventory accuracy and reduce errors.
Here’s how ERP inventory management can improve your inventory tracking:
- Automated replenishment lets you optimize your inventory levels, automatically reorder products when they reach a specific threshold, and reduce the risk of stockouts.
- Real-time inventory tracking keeps you updated on stock levels, reducing the risk of excess inventory or inventory shortages.
- Inventory forecasting allows you to plan for future demand by analyzing historical data.
- Batch and serial number tracking allows you to identify and track products by assigning each a unique identifier you can use to track them from production to sale. This helps you maintain control over your production process, guarantee product quality, and identify and trace any problems in the manufacturing process.
These ERP inventory management solutions improve inventory accuracy by reducing errors in inventory tracking, minimizing inventory shrinkage, stockouts, and overstocking, and making sure the right products are available at the right time.
Inaccurate inventory data can lead to lost sales, reduced customer satisfaction, and increased inventory carrying costs.
ERP inventory management helps you make informed decisions about your inventory levels, streamline your business operations, and improve your bottom line. Accurate inventory data also lets you fulfill customer orders promptly, improving customer satisfaction and increasing the likelihood of repeat business.
Supply chain transparency
ERP inventory management gives you supply chain transparency by offering real-time visibility into your inventory levels, supplier performance, and product movements.
You can use ERP inventory management to track products throughout the supply chain, from procurement to sale. This confirms the right products in the right quantities at the right time.
Below are some ways ERP inventory tracking can enable better supply chain management transparency:
- Automated data collection allows you to collect and analyze data from various sources (including sales orders, purchase orders, and inventory levels) for visibility into supply chain performance.
- Real-time inventory tracking lets you track inventory levels, product movement, and shipping information so you have up-to-date information on product availability and delivery lead times.
- Supplier management tools allow you to manage supplier relationships, track supplier performance, and improve supplier collaboration.
Supply chain transparency is important for your business because it allows you to identify inefficiencies, reduce costs, and enhance customer satisfaction.
That’s because supply chain transparency lets you identify potential supply chain disruptions and take proactive measures to reduce risks so you can meet customer demand even in the face of unexpected events.
Easier financial reporting
ERP inventory management makes financial reporting easier by integrating financial data with inventory data, giving you a comprehensive view of your financial performance.
You can track inventory-related costs (like procurement, storage, and shipping) and combine this information with financial data (like revenue and expenses) for a complete picture of your financial performance.
Here are a few ways ERP software makes financial reporting easier:
- Real-time inventory tracking allows you to track your inventory items in real-time and shares accurate information on inventory costs and values.
- Automated inventory valuation lets you automate the process of calculating your inventory value, reducing the risk of errors and simplifying financial reporting.
- Cost analysis tools let you analyze inventory-related costs and integrate this information with financial data, such as revenue and expenses, to gain insights into financial performance.
Financial tracking and reporting is vital for your business because it allows you to make informed decisions about your inventory levels, pricing, and product offerings. These things can all help you improve your bottom line.
Another benefit of easier financial reporting is that it allows you to comply with financial reporting guidelines. This reduces the risk of noncompliance and potential legal and financial penalties.
Happier customers
Perhaps the best benefit of ERP inventory management is that it can lead to happier customers thanks to enhanced customer service.
Some ERP features contributing to this include:
- Real-time inventory tracking allows you to fulfill customer orders promptly to improve customer satisfaction and reduce the risk of lost sales.
- Order management tools let you track customer orders, manage order fulfillment processes, and give customers real-time order updates to improve transparency and communication.
- Customer relationship management (CRM) tools help you manage customer relationships, track customer interactions, and provide personalized customer support, enhancing customer satisfaction and loyalty.
High-quality customer service means stronger relationships with your customers, improved customer experience, customer loyalty, and repeat business.
Tips for implementing ERP inventory management
Implementing ERP inventory management can be a complex process, but these tips can help with a smooth and successful implementation.
Choose the right system
When implementing ERP inventory management into your business, it’s important that you invest in the best system for your needs. There isn’t a one-size-fits all solution. You must consider several factors during the decision-making process:
- Your business needs. Identify your objectives, and consider factors like your business size, how complex your inventory management needs are, and the number of people using the system.
- Features. Different ERP inventory management software programs offer different features. A few to look for are real-time inventory tracking, automated replenishment, inventory forecasting, and financial reporting capabilities. Which do you need, and which can you do without?
- Cost. Consider the cost of each ERP inventory management software system and how it fits into your business’ budget. Look for systems offering a good balance of features — the ones you actually need — and a good price.
- Scalability. Consider how each ERP system can grow with your business, and look for one that can scale to meet changing inventory needs as your business scales and grows.
- Training and support. ERP software can come with a learning curve for you and your employees. Choose one that offers support and training resources so you can teach your team how to use the new ERP inventory management system properly.
Examples of ERP inventory management systems providers include:
Integrate with other systems
Another way an ERP inventory management system can be helpful for your business is that it can integrate with your other systems to manage everything in one place.
Here are some examples of the various systems it can integrate with:
- Accounting systems. Integrating with accounting systems lets you manage your financials and inventory in one place while tracking inventory-related costs, managing accounts payable and receivable, and generating financial reports.
- ECommerce platforms. An ERP inventory management system can integrate with eCommerce platforms like Shopify, WooCommerce, and Magento, allowing you to manage your online sales and inventory in one place. Automatically update inventory levels, track sales, and manage customer orders from a single system.
- Warehouse management systems (WMS). Integrating with warehouse management systems (such as Fishbowl and 3PL Central) lets you manage warehouse operations and inventory in one place. This lets you track inventory levels, manage inventory movements, and optimize warehouse processes.
- Customer relationship management (CRM). Having an ERP inventory management system integrated with CRM systems (like Salesforce and Hubspot) lets you manage your customer relationships and inventory in one place by tracking customer interactions, managing customer orders, and giving customers personalized support.
- Package delivery systems. An ERP inventory management system can integrate with package delivery systems by automatically updating inventory levels and shipment tracking information in real time. Some ERP systems can integrate with the Circuit for Teams Webhook API for live event data. This can help you track your inventory in the distribution part of the supply chain through to last-mile delivery.
Train employees
Using a new system like ERP inventory management means getting your employees up to speed with the new technology.
Getting all of your employees on board with the change can be difficult. Some may even resist or struggle to adapt.
Here are some tips to help train your employees:
- Explain the benefits. Tell employees how the new system will help make their jobs better. Explain how it will also improve business processes, save time, and lead to better outcomes. Talk to each team individually, showing them the specific benefits related to their part of the business.
- Involve them. When implementing the new system, ask your employees for their input, feedback, and suggestions for improvement.
- Address concerns. Your employees will want to express their concerns and feelings about the new system and how it affects their workflows, so make sure you listen to their feedback and take steps to address them.
- Train them individually. Tailor the training to each employee’s needs and offer different training mediums, like online modules and hands-on sessions.
From warehouse to delivery and beyond
ERP implementation helps you control many different business processes all in one place. An ERP system that includes inventory management typically includes functionality for tracking items from the moment you get the inventory to the point at which your customers get their orders.
Integrating your ERP software with Circuit for Teams lets you track your inventory and your items after shipping. It offers handy features like optimized delivery routes, real-time driver tracking, and accurate ETAs to get you the fastest routes, minus the time-consuming process of creating them manually.
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