ERP systems help companies automate and streamline operations, but how can they tackle the problems posed by inventory management?
Inventory management can be challenging, especially when selling from multiple channels, but minimising overstock while avoiding stock-outs can be essential to keeping your business afloat.
Here are some inventory management challenges and how a suitable ERP system can help to tackle them:
Reducing user error
Typically, inventory management involves data entry when recording items’ locations at various points in the inventory. This is generally done using stock books, ledgers, stock cards or bin cards.
Using these methods, users manually count stock or register items individually, leaving room for errors that reduce the accuracy of any stock levels.
Utilising a suitable ERP system, much of the data entry can be automated, helping to eliminate opportunities for manual data entry errors to occur, with the resultant improvement in accuracy allowing for more informed inventory planning while also making it easier to maintain stock levels.
Coordination between departments
Inventory management often requires strong cohesion between multiple departments in the business. When balancing stock, businesses need their sales and procurement teams to work together, and both the sales and procurement teams work closely with the finance team.
A correctly configured ERP system lets all the departments in the business draw data from the same place, eliminating discrepancies between per-department tools and bringing the software that departments use individually onto the same platform, ensuring compatibility and integrations between departments’ systems.
Predicting supply and demand
Knowing a sensible stock level to keep is essential. However, many external factors can affect the supply and demand of products.
Using an ERP system can give you greater insights into historical seasonal demand, among other patterns, that can help the business plan its inventory on real data and put its inventory plan into action more efficiently using the ERP’s other automation tools.
Stock traceability is integral to many inventory management systems and is even legally required in some territories. If a recall is issued, tracing a product or product line across the supply chain may be necessary.
An ERP system with integrated inventory management can be configured to record each product’s journey through the supply chain by serial number. This can allow any product’s journey to be traced in the event of a recall or other problem.
Inventory value is a significant part of many businesses’ assets. This makes accurate stock tracking essential for financial compliance and requires more work from the finance team.
When integrating inventory management with an ERP system that includes financial management tools, the transactions from the inventory management system can be automatically included in the financial reporting process without incurring any inaccuracies from manual entry.
Give your business the tools it needs to grow with Oracle NetSuite
Oracle NetSuite is the premier pre-built ERP system, providing businesses with the tools they need to grow. NetSuite’s inventory management module can help businesses tackle inventory management challenges.
NoBlue is an established ERP provider and has implemented solutions based on Oracle NetSuite since 2011. Contact us if you’d like to discuss what a NetSuite-based ERP system can offer your company.