When a business manages its goods, products, and services with the intent of resale or further processing that is called inventory. Now what all makes an inventory is the next question after what is inventory. So it primarily includes raw materials, goods in the process of being manufactured, and finished goods. Their management is the main concern in this blog and how ERP solutions can play a crucial role in streamlining the same. Let’s dive into the topic.
What is Inventory Management?
When the flow of goods or products in an organization is controlled in an efficient and effective manner, that process is called inventory management. The efficient management of the inventory includes but is not limited to keeping a tab on inventory levels, stock movements, and its related processes. The entire course of action makes sure that extra costs are brought down and profits, multiplied. And what can be better than maintaining the inventory of the right product in the right quantity within the right time frame?
Activities under Inventory Management
Inventory Planning – analyzing historical data, market trends, and similar factors, inventory forecasting is done to avoid stock-outs or overstock situations. It eventually helps in meeting customer demands.
Restocking – it includes placing orders with suppliers, scheduling deliveries, managing lead times, and more. It is done in order to ensure products are there in optimum quantity.
Warehouse Management – other than managing inventory within storage facilities, it extends to the point of catering to customer needs while maximizing space utilization and minimizing inventory handling costs.
Tracking & Monitoring – from the initial phase of procurement of goods till the point of sale, the entire process is under supervision, using the ideal ERP solutions. In short, it is the management of the supply chain.
Analysis & Optimization – when inventory data is analyzed, trends are identified, inefficiencies are narrowed down, and that is called analysis and optimization of an organization’s inventory.
ERP for Inventory Management
Enterprise Resource Planning (ERP) software is the need of every business in the States that helps them streamline their operations and processes. From finance management and human resource management to customer relationship management and Inventory Management, an ideal ERP software can muddle through everything at once without compromising on the quality of the outcome. It rather gives a better return on your initial investment (ROI). Here is a list of roles it plays in the Inventory Management of a business, irrespective of its size and budget.
- Order Management: As soon as sales orders are placed, an ERP system gets started with its crucial role of streamlining that order using the “automatic update of that inventory” feature. With the help of accurate order processing, you can prevent situations like stock outs or overstock. Orders are received and fulfilled smoothly, without much hassle.
- Stock Optimization: There are a number of algorithms and optimization techniques that can be used to optimize the inventory levels of a business. Once your ERP software sets a minimum and maximum stock ceilings, safety stock levels, and reorder points, the thing that comes next on the agenda is to restock the inventory with the optimum quantity of goods and resources to obviously manage the stock, and then bring down the carrying costs.
- Cost Control: SkyTrust offers such ERP services that help businesses of any size and budget, track inventory movements, overall costs, and related expenses. This way, businesses can easily recognize certain areas where costs can be reduced or eliminated. Other associated concerns include bringing down the carrying costs, optimizing warehouse space, and making sure that obsolete inventory is not being used or even repeated.
- Unified Data Management: The ERP system of an organization brings various departments and their functions on the same platform so everyone can access anything, anytime; and inventory management is a part of data unification. All the inventory-related data becomes an integral part of a centralized database which can be managed and stored in real-time that includes but is not limited to the movement of stocks, their orders, final purchase and sales, as well as stock levels.
- Demand Forecasting: You will be surprised to know that an ERP system can help you make the most of advanced forecasting and demand planning tools to predict the demand for your products in future. All it does is analyze historical data, study market trends, consider other factors, and predict the right forecast. You can manage your inventory in order to meet the demand of your loyal customers while keeping a minimum tab on your stock in excess.
Conclusion
Make sure you get the right ERP service in the USA to enhance digital transformation of your US-based business. And how you can do that? By joining forces with SkyTrust, your digital partner in need.
