How Does ERP Help in Inventory Management

What is Meant by Inventory Management?

Inventory management is basically the control of supplies and equipment. It involves aspects like managing and keeping an eye on the ordering, storing, and stocking of the appropriate amount of inventory to reduce storage waste and expenses.

Without an effective inventory management system in place, chances are high that you will experience stock emergencies regularly. That is, you will either be left with excess raw materials than needed or without any necessities to fulfill your production demands.

This kind of situation is extremely dangerous for any business as it can cost you both time and money, along with losing clients and creating a bad reputation. That's why a grasp on inventory management is a must if you want to keep your store open and operate efficiently.

How Does ERP Help in Inventory Management? [8 ways]

Whether you want to handle your inventory properly or just want to simplify your complicated workflow processes, an ERP can come in handy in all aspects.

Here is a list of the 8 benefits you will get to enjoy upon using ERP for inventory management in Bangladesh:

1. Make Inventory Tracking Easy

The basis of inventory management is to know your products on hand and stored on the shelves. However, a standalone inventory management system cannot efficiently optimize your inventory unless it is connected with the rest of your firm.

This is where an ERP comes to help. They combine your inventory management with the rest of your business operations, ultimately simplifying inventory tracking.

What's more interesting is a central inventory database updates in real time and is instantly accessible to your team through an ERP system.

This makes production more efficient and streamlines financial reporting, allowing you to know exactly what you can or cannot fulfill, what kind of raw materials you have in stock, and whether the information entered in the database corresponds to what is on your shelf, etc.

2. Automate the Entire Process

Managing your inventory manually is tough and time-consuming, especially if your inventory size is large. An ERP can simplify this tedious task, saving you time and money.

How?

Well, real-time inventory updates are here to replace the laboriously maintained spreadsheets of the past. As a result, you can spend more time on other important aspects of your company.

Again you no longer need to worry about any human mistakes or potential problems! The automated inventory management system will take care of everything.

Furthermore, your dashboards will display an accurate inventory image, providing better insight into how things are going. It also allows you to save the contacts for your suppliers, total stocks, budgets, and future requirements.

3. Streamline Business Processes

Correct inventory management can improve the efficiency of a manufacturer to a great extent. For instance, employees could use their time on other activities rather than searching for a specific item in stock.

Fortunately, by using an ERP system, you can automatically keep a record of each inventory you use on every task. This, in return, will allow you to undertake effective production planning because you will know exactly how much raw material you have on hand and what you need to order to finish a work.

4. Help in Prediction, Restocking, & Managing Excess Inventory

An ERP system manages your sales, purchases, and transportation so you can maintain proper stock levels to meet your company's demands.

With an ERP, you can benefit from an inventory management system integrated with your business operation, making it simpler for you to deal with things such as long lead-time items.

Besides, you can learn about these products during the project's design phase, ultimately giving you more time to order the item and assuring you will have it in time.

Further, real-time stock data also make it simpler to refill inventory. Such as, an ERP can either automatically place orders or notify your purchasing manager of the requirement for an order that s/he needs to place.

Otherwise, manufacturers can incur significant expenses to accelerate shipping when they need supplies if there is no ERP to alert them when it is time to restock. And this mistake will eventually cost your business more.

Therefore, if you have access to real-time excess inventory information, you can return merchandise rather than occupying shelf space that could be used for something more vital.

5. Save You Money—Cost-effective Solution

Efficiency equates to cost savings. And using an ERP for inventory management allows you to manage several components of your organization without having to pay for separate systems. This, in turn, helps to lower workload and costs.

Besides, having better inventory control also results in more jobs being completed. By automating and streamlining operations, ERP inventory management systems cut down human labor, which eventually helps a business to thrive.

Plus, ERP systems enable you to gather higher-quality data, providing you with better business insights and helping you monitor your company's growth and prepare for expansion plans.

6. Automate Quality Checks

In most businesses, products must adhere to strict industry standards for quality, security, or environmental management.

After the standards have been defined, the ERP system will search for the necessary data on each product. Upon finding any non-compliance, it will alert the appropriate staff members immediately. So they can take action accordingly.

7. Improves Customer Satisfaction

As your business grows, it becomes challenging to maintain quality. Yet, time is the most valuable resource we all struggle with in a business.

Therefore, the order-taking workers must be confident enough to access the important data to fulfill customer requests, such as quantity in stock, address, selling price, number of orders, delivery date, etc.

An ERP allows you to do that. So, based on the data, they can provide clients who require components or equipment with both rapid and clear solutions.

Furthermore, integrating ERP software with a company's or organization's CRM is feasible and recommended. With this synchronization, you can access all data from a central dashboard, enabling more customer satisfaction.

8. Take Control of Product Pricing and Costs

Retailers and suppliers must team up to supply popular products at the lowest feasible price to make a profit. This implies that refunds should be simple and affordable in addition to having a low starting cost.

It is where an ERP system can help suppliers by helping them to keep track of their sales and inventory levels. So they can restock their best-selling products and ensure they are always in stock.

Additionally, they can utilize this information to adjust prices in times of strong demand by running special offers or discounts in reaction to seasonal changes.

Final Words

Implementing an ERP is a must for every business owner looking for ways to improve their business processes. Besides, why go for the harder option when you have a way easier and standard method to simplify your inventory management while increasing efficiency?

That's all from the discussion regarding how does ERP help in inventory management. Now, it's your time to implement the right ERP software in your inventory management!