Introduction:
Companies that have mastered the art of inventory management have long been industry leaders within the wholesale space. This is because having a complete mastery of inventory management leads to a reduction in waste and saves both time and resources, which in turn increases profit margins.
Inventory management is all about data. Whether it is purchases, shipping, warehousing, customer satisfaction, or any other process it is vital to have correct and accurate data at all times to make the most profit.
Nowadays, inventory management has been made significantly easier. Much of the required data is now readily available at the business owner’s fingertips due to ERP inventory management systems.
ERP inventory management allows companies to have an edge over the competition. Tasks such as inventory, finance as well as other aspects of businesses are all managed via such ERP inventory management systems.
How does ERP help in inventory management?
Enterprise resource planning inventory management or more commonly known as ERP inventory management aids businesses to manage and streamline their operations in an efficient, cost-effective manner.
ERP inventory management provides businesses the opportunity to manage funds, operations, and inventory in a single place which decreases the risk of errors and boosts efficiency.
Furthermore, ERP aids business owners to make strategic decisions by utilizing precise real-time data.
Listed below are some of the benefits of employing ERP inventory management solutions within a business.
Easier to plan inventory replenishments
Managing inventory becomes a million times easier when ERP inventory management solutions are utilized. Such software enables business owners to accurately plan out replenishment orders.
Inventory management systems help with categorizing parts that make it easier to order just the right amount at the right time. This enables fewer transactions and better and more accurate inventory management.
Management of excess inventory
ERP inventory management allows business owners to quickly access any surplus inventory. It offers a three-sixty degree view of the entire inventory and lets you exactly what caused this surplus.
Furthermore, this quick detection of the surplus leads to more swift, decisive action by the business owner which saves limited funds that can be utilized to buy the inventory that sells.
Enhanced efficiency
One of the major perks of an ERP inventory management system is that it boosts efficiency at each step.
Enhanced efficiency is achieved by making use of one single centralized system this enables automation and reduces double handling. Greater efficiency leads to greater productivity and an increment in profits.
Reduced Expenses
Every business owner knows that to increase the profit margins it is vital that costs are brought down. ERP inventory management systems make sure to do just that.
Not only do such systems reduce manual labor but because they have so many services compiled in one single solution there is no need for business owners to purchase or invest in segmented resources/systems.
Precise data collection and disclosure
ERP systems ensure that the correct data is available to business owners on time and every time.
With real-time data updates on consumers, current stock, and pending orders ERP inventory management systems allow the quality collection of data.
Furthermore, ERP systems can generate customized inventory reports as well as custom sales reports that enable a business owner to constantly monitor operational performance and prepare for growth.
Allows Business Expansion
ERP inventory management systems are specifically created to cut costs and boost profits wherever possible. It does so by automating nearly all areas of inventory management and mitigating the use of manual labor.
Whether that is to grow internationally or at the local level ERP inventory management systems provide just the perfect environment for business owners to take their businesses to the next level.
Automation
Automating mundane, time-consuming tasks has been a lifelong goal of humanity since its inception.
An ERP system was designed to do just that. Utilizing ERP systems will reduce the overall costs and resources which in turn allow those freed up resources to be used elsewhere such as in business expansion.
It’s time to say bye to long error-prone spreadsheets and say hello to constant, concurrent inventory updates.
Automation of such tasks not only reduces the risk of errors but also simultaneously gives a business owner a birds-eye view of the inventory.
Having such a level of automation and visibility gives a business owner some much needed time and confidence to run the business successfully and profitably.
What are the different types of ERP?
Several different types of ERP are tailor-made to meet the demand of various industries.
Listed below are some of the major types of ERPs available.
- Apparel ERP
The fashion industry is constantly changing. Whether there is a change in season or a change in trend this ERP can handle it all.
- Automotive ERP
Car manufacturers heavily rely on such type ERPs to keep a constant track of inventory management, scheduling as well as quality control.
- Construction ERP
Construction workers/contractors have to closely monitor materials and equipment as well as manage labor and sub-contractors. Therefore they must utilize ERP inventory management to help manage such tasks.
- Manufacturing ERP
ERP inventory management within the manufacturing industry provides manufacturing-specific functions that help to streamline and mechanize everyday operations.
- Higher Education ERP
ERP in higher education helps colleges and universities to help manage all aspects within the educational institution. They also help with back-office management, student data, management of staff, school supplies, etc.
- Cannabis ERP
Since the legalization of cannabis within the United States of America this type of ERP has soared in popularity.
Cannabis ERP like any other ERP helps to optimize operations, maintain compliance and manage every other aspect of the business with one single centralized program
Utilizing such software helps with staying ahead of the competition and maximizing profit margins while simultaneously catering to this type of industry’s unique needs.
4 vital steps to implement ERP
Before implementing ERP inventory management, it is important to plan and prepare for the main four steps which are: ERP inventory management implementation schedule, a process for data migration and integration, user training in ERP inventory management, and finally the testing and launch plan.
It is necessary to ensure that the plan is clear, long before implementation. At every stage, the key parties concerned must be kept in the loop. This includes current stakeholders as well as future ERP users.
The process of data migrations and integrations can be very complicated. Different mechanical systems have different abilities when it comes to providing a smooth transition. It is important to make sure that the data is clear and ready.
Poorly planned migrations of data can cause the entire operation to fail, especially because of breaches and issues with data privacy and security. It is important to test data and new data inputs, verify and cleanse data, and transfer it efficiently.
It is vital to ensure that users are involved from the start of the ERP implementation process. Discrepancies in training ERP users lead to poor adoption rates. First, users must be educated about the benefits and finally be trained properly.
A proper training program must be implemented that the people involved can easily adopt. Video tutorials, workshops, and committed ERP support providers must be incorporated to make it easy to educate users.
Finally, before the transformation, it is necessary to have a launch plan. A testing phase should be planned and executed. This will help in eliminating any issues that may occur. However, if any major issues happen, delaying the launch will be inevitable.
The testing stage should be done after-hours and on a large number of users. This will help in ensuring that the risk is minimized. Once the team is ready and satisfied, the switch can take place and ERP implementation will be successful.
What is an ERP system in a warehouse?
For many small and medium scale wholesale businesses, ERP inventory management is the perfect one-stop solution for all their needs.
Warehouse ERP inventory management not only makes it easier to run a business more efficiently on its own but it can also be integrated alongside other systems such as warehouse management systems.
ERP inventory management within warehouses can be employed to do several tasks such as tracking inventory locations, inventory levels, total orders, and some other limited key performance indicators (KPI).
ERP inventory management systems also help with automation and the digitization of tasks. Furthermore, their functionality can be increased multiple folds when they are used alongside warehouse management systems.
For companies that are still growing, ERP inventory management solutions are usually powerful enough to take care of the day to day warehouse operations. However, larger companies need to have other systems in place to meet their requirements.
What are the 4 types of inventory?
Raw Materials, Unfinished Goods, Finished Goods, and Maintenance, Repair and Operations (MRO) are the four types of inventory.
Raw materials
Raw materials are items that are used in the manufacturer’s transformation process to generate finished products. Raw materials may be extracted materials or goods that the organization has prepared or extracted.
Raw materials may also be purchased from outside the organization. If an organization had no input into the production of a material, it can still be classified as a raw material. Typical raw materials are minerals, petroleum, paper, wood, and chemicals.
Items such as ball bearings, nuts and bolts, and wheels can also be classified as raw materials, as long as they are purchased from outside the organization.
Along with finished products, company warehouses also store raw materials. Raw materials are those materials that are required to turn your inventory into a finished product. For example, leather to make bags for your company is raw material.
To distinguish between raw materials and finished products, it is necessary to first keep track of the raw materials to ensure that operations can continue. Manufacturing teams and people working in the warehouse must be able to communicate easily.
Warehouse workers must monitor raw materials. One way to do this is by labeling the materials or the vehicles used to transport them, with barcode tags used for data collection, to ensure that the materials are under constant supervision.
Unfinished Goods
The process of making the final finished products begins once the manufacturer has all the required raw material. Therefore, the inventory that is used in the process of turning raw materials into finished products is known as work in process inventory.
Unfinished goods are those materials that are being worked on, and can also be called Work-In-Process (WIP). These include labor, raw material, and overhead expenses. WIP is a term that describes moderately finished goods awaiting completion.
The goods that have begun the manufacturing process but are not yet completed products are listed as unfinished goods. Work in process is considered as an asset on a balance sheet but it is valued lower since the product has not been completed.
The manufacturer must keep a track of the exact amount of inventory, whether the inventory is in the form of raw materials or work in progress. An efficient way to do this is by managing inventory.
Inventory management helps to maintain and keep count of all kinds of inventory. This gives the manufacturer an idea of how much of a product needs to be produced and also aids in predicting the production as per demand. It is also important to calculate the work in process costs.
Finished Goods
Any product that is ready to be sold to customers, but has yet to be sold to them, falls under the category of finished goods. These are the goods that have completed the manufacturing process but haven’t been sold to the customers yet.
Finished goods inventory is the reserve of completed products. These goods have been checked and passed through final inspection requirements to be transferred out of work-in-process and into finished goods inventory.
From this stage, finished goods can be directly sold to their final customer, sent to distribution centers, or kept waiting for a customer to order them. An example of finished goods is the inventory listed on a website, ready to be sold to customers.
Maintenance, Repair and Operations (MRO)
MRO consists of the inventory that is needed to assemble and sell the final finished product but is not used to build the finished product itself. MRO items can include gloves, cleaning supplies, repair tools, and computers and laptops.
MRO inventory needs to be replenished regularly to ensure the continuity of operations in a manufacturing company. Failing to keep track of MRO inventory leads to delays in fixing the equipment, cleaning the area where production occurs, and eventually damages the business.
Purchasing based on a strategic perspective is necessary when it comes to MRO inventory. Managers can use systems that manage inventory to edit orders based on what the team requires, and can get discounts from bulk orders, leading to cost-saving.
Some examples of MRO goods include lubricants, oils, uniforms, and office supplies such as pens, pencils, and paper too.
What is the best program to keep track of inventory?
ERP inventory management has taken the industry by storm. Most companies are now more inclined to shift towards these kinds of solutions to get away from certain problems that are plaguing the industry.
However, not all companies can afford to make the shift especially if they are already losing revenue due to mismanagement, inventory shortages, or canceled orders.
So how can such companies make use of such kind of software? Well, the answer to this problem is pretty simple. All they have to do is take advantage of the free software out there and pick the best one.
So which one is the best out of hundreds of options available online?
Among all of the free programs that are available Odoo by far stands out from the rest. Not only is Odoo free but it offers certain features that none of the other programs offer without cost.
So what is Odoo and what are some of Odoo’s best features?
Odoo is an open-source ERP inventory management software that can cater to any size of business. It is perfect for users looking for inventory management modules that are completely free of cost. However, Odoo does have paid features which include CRM management and project management.
Several users have found Odoo’s accounting integration to be very helpful as it saves time by automatically moving transaction data to the accounting system. Furthermore, Odoo has vibrant community forums that are available for 24/7 assistance for any help the user might need.
Another major advantage of Odoo is its cross-platform availability. Odoo is available on both Android and IOS operating systems which makes it convenient for users to access data anytime anywhere.
Additionally, Odoo is among the most top-rated programs with having been highly rated by reviewers most of which were owners of the small-scale business from the retail, information technology, and software industries.
Folio3 is your custom ERP inventory management solution partner:
Folio3 is a leading technology solution provider. The company has the relevant experience, skills, and the required resources to develop cutting-edge, industry-leading technology products.
Moreover, Folio3 makes customer satisfaction a top priority. The company makes it its mission to have a strong, professional relationship with all of its clients. This is achieved via catering to all of the client’s requirements, providing real-time support, and having a proper order management process infrastructure.
Folio3 brings the best ERP inventory management solutions meant to assist organizations across all sectors.
Folio3 makes use of Microsoft Dynamics NAV and Shopify integration to bring the best ERP inventory management to all of its customers. Customers can even request a free demo to help them better understand the product and know what they are signing up for.
Microsoft Dynamics Navision ERP integration coupled with Shopify store software allows customers to manage their data from a single place. It bridges the gap between online and offline activities to make it easier for customers to manage processes.
Furthermore, connecting customers, items, orders, payments, and shipment data is made quick and easy with the help of such software.
Folio3 offers its clients the best order management systems that enable them to have real-time connectivity with their business with an all in one solution.
Additionally, Microsoft Dynamics allows businesses to manage and track all their data and activities in real-time. Businesses can track inventory levels, pricing data as well as other activities for precise order management.
Folio3 is equipped with an arsenal of professionals who are experts in delivering world-class e-commerce platforms for Dynamics 365, Finance and Operations, HR, and payrolls which helps with boosting online sales and increasing market share.
The major aims of the eCommerce platform are to provide better growth factors, greater customer experience and to provide optimized business processes and operations.
Folio3 is a preeminent technology partner that is trusted by customers worldwide. Folio3’s Magento Dynamics NAV integration allows a business to grow and expand. The software is fully equipped and ready to support all kinds of e-commerce functions.
The system allows users to maintain and store data within Microsoft NAV and also has support for any add ons that users might want to add to increase functionality and boost performance.
Folio3 ensures that projects are completed on time every time, plus round the clock, support is available to resolve any queries or problems that might arise.
Conclusion:
ERP inventory management has revolutionized the way inventory management is approached within the industry.
Moreover, ERP inventory management is highly cost-effective and efficient. It is now being widely used to streamline inventory management for all kinds of inventories. They also aid in the decision-making processes and are available on multiple platforms.
Aside from maximizing profits and boosting efficiency ERP inventory management eliminates errors. Companies that have opted for such technology are reaping the benefits while those who are still reluctant to adapt are falling behind.
