There was a time when the task of keeping track of the inventory was done with pen and paper. Companies used to have gigantic file cabinets with thousand of compartments all over their premise. The filing process was complex and time consuming as the employees had to organize the files according to various categories (Issue date, department, managers, priority status etc. ). There was another headache as well. When the cabinets exceeded the capacity, some of the files needed to be relocated or dumped to make place for new ones.
This inefficiency ridden and error prone business processes finally came to a halt. The credit goes to ERP and Automation solutions that started to solve both regular and critical business problems. These solution not only resolved the issues, but also provided accuracy and mobility to the organizations.
The features and specifications of different ERP solutions can vary. But a good ERP solution for inventory ensures some minimum benefit for your organization. In this write-up, we will cover those aspects and give you some valuable tips on how to better manage your inventory.
Eliminate Repeated and Inaccurate Data Entry
An ERP system eliminates the requirement of giving data entry at every single point of the business chain. Let me break it down to you. If you are doing everything manually, your employee at the stockpile have to count the products and note it down. Then it will be handed over to the data team to input these numbers in a office suite. In case the managers are using a dedicated solution to analyze the data pattern, they will have to upload the dataset again from their point.
In this cumbersome process, a high chance of data inaccuracy exists. An ERP solution can provide you a way out of this problem. You do not have to input inventory data manually at every points because it will provide multi layer integrated software to support your operation.
Track Your Products Effortlessly
Product tracking constitutes the major part of inventory management challenges. Business owners and inventory managers are accountable for every single movement in the stockpile. In many businesses, stock keeping units exceed hundreds in number. Understandably, these products are of different size, shape and exchange styles. Some of them can be bottled products where others can be solid bakery items. The module of distribution will most definitely change according to these properties.
Given the situation, an ERP can save you from loads of trouble. It can allow you to track their movements of all your products in a dashboard.
Better Forecasting with Historical Data
The data that is being stored continuously in the system is one of the greatest business assets. It helps you to find out useful trends and patterns of your product inventory. Based on that, you can take major data driven decision for each product SKUs that are stored across your inventories. For example, you can study the historical data of a product to understand its seasonal demands and design the future strategies accordingly. Some of the premium ERP solution provides an analytics dashboard with forecasting features. Or you can export the data to .csv format and create your own forecasting model using Microsoft excel or other statistical solutions.
Ensure Coordination Between Sourcing and Sales
One major challenge of inventory management is taking decision related to goods sourcing and sales. There has to be a balance between these two otherwise your profitability will be hugely affected. For example, you need to know at which point of the day you can afford to have a certain number of products in the inventory. If there is a mismatch, either you might lose sales or it might result in obsolete inventory. None of these is any favorable scenario for a businessperson.
Integrate your Accounting Module in Real-time
A solid ERP solution should let you integrate the inventory system with the accounting module. The major benefit is whenever there is a movement in the stockpile, it is directly reflected in your account book as well. This way you can have a better grip on your value chain and take decisions based on the total picture of your business.
With the increasing speed of internet and data transfer, tech companies are more into real time solutions. It adds mobility within an organization thus allowing the employees to perform some of the tasks remotely.
Final Words- Manage Inventory Efficiently
These are some of the broad areas that an ERP solution will help you to perform. But you, as a business owner manager should be tactful about taking a decision. There are certain factors that will influence how you approach to ERP adaption in your company. Financial budget, human resource, organizational culture, business process, infrastructure – are to name few of these factors. It varies across organization, true. But here are some smart questions that you should ask (regardless of your company) to assess how efficiently you are managing your inventory.
- What type of reporting system is used in your inventory? Does it provide actionable data in real time?
- How the order management is handled by your provider / vendor?
- What is your daily average obsolete stock and how much many is it costing you?
- What is your process of eliminating the obsolete / bad inventory?
- Do you have a systematic approach to forecast the demand / inventory requirement in a particular time?
- How do you adjust your stock quantity with the storage capacity?
- Is there a structured process to maintain the security of inventory management process and data?
So, take your time to answer these questions. After that, take your decisions based on the finding. It will pave way for profitability and operational excellence in your organization.