Imagine running a bakery and suddenly realizes that you do not have enough quantity of flour to complete an order for one of your largest and loyal customers. As a manufacturer of baked food items, flour is your main component to produce end products and is, therefore, a crucial part of your inventory. So, not having enough inventory means you run the risk of losing sales.
Now, let us take an opposite scenario. You got a large order and have ample inventory in your warehouse for long. You completed and delivered the order on time, only to realize that the flour and other raw materials have crossed their expiration. Different scenario, but the risk remains the same- losing sales again! Also, at the core, the problem remains the same- inventory mismanagement.
Long story short- striking the adequate balance of inventory is the prime need of any business for driving revenues. And, this can be achieved by simply having an ERP solution. The following are the different ways an ERP helps in inventory management:
- Real-time and multiple location tracking: ERP solution helps manufacturers track inventory levels across the entire length and breadth of an organization, irrespective of its size and multiple locations. To understand the point in a better way, let us continue the above example of a bakery retailer with stores in multiple locations across the city. Now, using an ERP, the sales team of a Bakery retailer can access the centralized information about the inventory and can check for stock levels across various locations. So, even if, they have a shortage of a particular product at one location they could still close the sale and get it delivered to the client from another location.
- Quick and accurate report generation: ERP generates real-time, accurate and detailed reports on inventory levels displaying all the information like: current on-hand, safety stock, inventory production, inventory to be procured, etc. This helps the manufacturer avoid both, the situation of over-stock as well as under-stock. Moreover, by tracking inventory along the supply chain, ERP also expedites product recalls as well as ensures complete product traceability.
- Buy/produce items at the right time: ERP gives in-depth insight into the various sources of supply and demand. It efficiently plans your production and purchase order considering the various lead times, resource availability, delivery date and such. Moreover, the long-term planning saves you from last minute expensive buying, instead suggests procuring during season or when offers or promotions are going on at your vendor’s end. This helps you save a good amount.
- Avoiding Scarcity: Maintaining safety stocks is important to manage extensive and fast moving product lines, along with handling last minute orders. And, an ERP is a perfect-fit for handling this. It generates alerts when inventory levels go below the minimum set thresholds.
- Right handling of surplus inventory: Surplus inventory, if found, needs immediate action. A delay might mean manufacturers have to dispose-off the surplus, i.e. wastage of their money. And, ERP helps in this as well. It lets you view and analyze surplus inventory in real-time. So that, right action can be taken at the right time.
It is never too late to start. Start using an ERP for managing your inventory, strike the adequate balance and experience the assured sales.