Last updated on February 26th, 2024 at 06:25 am
Effective inventory management is a cornerstone of any successful eCommerce business growth. However, traditional inventory management methods aren’t always enough. That’s where ERP inventory management software comes into play.
According to research, 49% of businesses have improved their processes after implementing ERP inventory management systems. Only 5% reported no improvements at all.
What is ERP Inventory Management Software?
An ERP (enterprise resource planning) inventory management software allows you to manage business processes using a single platform. With such software, you have real-time information about your inventory across locations.
Good ERP inventory management software is necessary for the manufacturing, distribution, and supply chain industries. It’s also helpful for businesses that need real-time inventory tracking for orders, costs, products, and materials.
Benefits of Using an ERP Inventory Management System
With an ERP inventory management system, your teams and departments can access inventory information. This leads to faster order fulfillment, decreased stockouts, and lower holding costs. The benefits of using an ERP inventory management system include the following:
Automation frees up one precious resource: time.
With the automation that comes with an ERP inventory management system, your workforce becomes more productive and delivers accurate work. They get to automate repetitive tasks such as data encoding, label printing, inbound and outbound transfers, and others.
You’ll also enjoy:
- Minimized data redundancy
- Greater speed, accessibility, and efficiency
- Reduced carrying costs for excess inventory
- Reduced stockouts
As you implement automated workflows, you save a tremendous amount of time and money. On top of that, you can replace outdated products with newer ones and minimize obsolescence. You can also generate automated backorder notifications and replenishment reports in real-time.
2. Inventory Tracking
Inventory tracking isn’t only about tracking your supplies and orders. It’s also about optimizing your system to its fullest potential. With ERP inventory management software, you can better manage your stocks and ensure you have the optimal inventory.
Also, you adopt an omnichannel approach to sales. This results in a more seamless and positive customer experience regardless of where the customer is making the purchase.
These days, ERP systems offer amazing tracking features for inventory counts, stock synchronization, purchase orders, and more. These may sound intimidating, but good ERP inventory management systems let users accomplish these seemingly daunting tasks with relative ease.
Forecasting and demand planning are two pillars of excellent inventory management. Accurate forecasting minimizes excess in inventory and helps prevent over- or understocking. You may even sidestep dead stocks and free up space in your storage or warehouse.
A good ERP inventory management system uses sales data and market trends to generate precise forecasts and reports. You can then use the reports to prepare accordingly.
On top of that, you acquire actionable insights into the state of your inventory. ERP systems use up-to-date analytics that you can leverage for product improvements or adjustments in your operations. Set reorder points and further avoid problems like depleted stocks or complete stockouts.
Inventory patterns are dynamic. Nothing stays the same over long periods, and ERP inventory software allows you to adapt quickly to changes in scale.
Good inventory management systems are scalable and can grow alongside your business. You can even upgrade them to acquire better features and applications that fit your evolving requirements.
On top of that, you can customize the inventory management system to match your specific business needs.
ERP inventory management software helps streamline your processes and remove data silos. It integrates processes across departments, collecting data and giving you an overarching view of business and customer data. The result: greater efficiency.
Data collection and reporting also become easier. ERP systems allow for quality data collection and provide you with real-time updates on stocks and customers in a single location.
You’ll also benefit from built-in features that facilitate robust quality checks. This is particularly useful if your products need to comply with safety standards. A good ERP inventory management system will streamline this process and automatically check if your product meets the required quality and safety specifications.
6. Saving Money
With inventory management software, you can track all information about pricing, suppliers, production, and shipping dates. Your ordering and re-ordering process becomes a lot of efficient and smoother; replenishments become streamlined. Consequently, you minimize the capital tied up in your physical inventory.
You can also create detailed and accurate financial reports, further improving your capital savings. Incorrect inventory details lead to inaccurate reports, which then lead to accounting errors and capital loss. A good ERP inventory management helps you avoid that.
7. No Coding!
Some ERP systems require dedicated IT teams to build customized workflows and automation. As such, you must have resources that have in-depth coding knowledge or hire an external team to handle the programming for you. While that sounds like a lot of work, it’s generally worth it if you can get all the features you need from your ERP inventory management system.
Luckily, new and modern ERP inventory management software programs nowadays often have no-code features. An example is Kohezion — you can enjoy all the benefits we’ve mentioned above with little to no coding required.
It can automate crucial operations from ordering to shipping to make your inventory management much smoother.
Key Features of a Good ERP Inventory Management System
Not all ERP inventory management systems are created the same. Some of them offer robust features that are good to have, while others offer barebones features that might not always match your expectations. A good practice is to check for must-have features present in any great ERP systems, such as the following:
Order Management and Supply Chain Transparency
Effective order management is a must-have feature for a good ERP inventory management system. Starting with effective invoicing functionalities. A good POS integration can automate this, as it generates invoices and sends them to customers the moment they place an order.
After the invoice is sent and the order is confirmed, the ERP system should be able to signal the warehouse team. They then start filling the order.
A good ERP system also provides good supply chain transparency. With this level of transparency, your business can minimize disruptions such as failed deliveries for crucial components. Good ERP inventory management systems also allow for order and shipping synchronization.
Multi-location Fulfillment and Precise Stock Tracking
Another key feature to look for is multi-location fulfillment, alongside precise stock tracking. This allows you to track sales sold through multiple outlets in various locations. This feature is especially important if you have warehouses, eCommerce platforms, and traditional outlets.
Finding an ERP system with such a feature saves your time and makes it easier to get information quickly. You also improve the overall experience of your customers, who can shop in whichever way they like — in your physical store or on your eCommerce website.
When it comes to stock tracking, a good ERP system should have a built-in warehouse management system. This system prevents problems such as delayed fulfillment or missing products.
Robust Reporting and Costing, Efficient Demand Forecasting
Robust reporting, analytics, and costing come hand in hand with a good ERP system. Accurate reports and costing enable better decision-making. One aspect that greatly benefits from this is demand forecasting.
With powerful data analytics, you gain actionable insights into the behavior of your consumers. You detect clearer patterns in product and channel performance, leading to improved sales. Apart from better sales, your operational performance becomes more efficient.
When you get your hands on real-time data, you can maintain the right inventory level. You predict trends, spikes, or falls in demand. Good ERP systems also let you create advanced reports, which contain KPIs and metrics.
Overcoming the Challenges of ERP Inventory Management
Traditional inventory management has pitfalls that become detrimental to your business, especially in terms of growth and efficiency. Luckily, ERP inventory management software is capable of helping you overcome such challenges. Here are the most common challenges you might face and how ERP systems can help you.
Complexity and Customization Required in ERP Systems
Inventory management tends to be complex. It encompasses crucial and often cumbersome aspects of eCommerce operations. Common inventory systems also try to provide a universal solution for businesses, but this doesn’t work because no two eCommerce organizations are exactly alike.
Apart from that, common inventory management software can be slow to operate, especially cloud-based ones that rely on steady and speedy internet connections. This may cause severe issues if you depend on accurate reporting and quick, real-time location.
Fortunately, ERP inventory management systems allow for customizations. You can implement updates and adjustments to the system to better fit your requirements. While IT and development teams are often needed to implement these upgrades, many modern ERP systems offer low- and no-code platforms to customers, such as Kohezion.
Managing Inventory across Multiple Channels
As an eCommerce business owner, your goal is to expand into multiple channels to achieve growth. Unfortunately, it’s easier said than done.
Managing inventory across multiple channels isn’t always smooth sailing, and it can get daunting quickly — especially if you’re not using the right inventory management system to support your scaling.
ERP inventory management systems help you juggle and manage inventory from multiple channels. They enable real-time access to accurate information on the go. You can also avoid data siloes around inventory, giving your finance and administrative teams full access to any information relating to inventory.
Dealing With Dead Stock
Dead stock (obsolete inventory) is another challenge that traditional inventory management often fails to solve. These are stocks that are either unused or unsold, making them unprofitable and draining your potential earnings every day that they take up space on your shelves.
With an ERP inventory management system, you can keep track of dead stock. You gain full visibility on product manufacturing and expiry dates. Automation features also alert you when a stock becomes obsolete.
ERP inventory management systems also automate your stock workflows, avoiding human errors or oversight. Such systems also automate your order and reorder points, and robust data analytics allow you to make data-driven decisions about your inventory.
How to Choose the Right ERP Inventory Management Software for Your Organization?
Choosing the right ERP inventory management software for your organization can be challenging. Lots of options exist in the market, but they may not always be suitable for your business requirements. To help you choose the right system, consider the following steps:
Identifying Your Intended Outcomes
When choosing an ERP inventory management system, consider the needs and goals of your organization and its stakeholders. Analyze trends, determine opportunities, consider resources, and pinpoint your core competencies.
Your long-term objectives will determine the best ERP software you need. It should align with these objectives and provide actionable insights to improve your inventory strategy for the long haul.
Scoping Out Your Project
To measure success, determine the key metrics you must feed into the ERP inventory management system. Define the data sources you’ll use, and establish which users — such as suppliers — will need access to the system.
Also, create a list of features and functionalities necessary to help you achieve your established goals.
Conducting a Vendor Analysis
When you’ve established goals and scope out the project, it’s time to create a vendor list and analyze each one on that list.
Find systems that meet your needs. Review similar businesses and conduct research into how the ERP system has helped them achieve their goals.
Ask questions about the system’s flexibility, integrations, and scalability. Seek answers from companies within your industry. It’s also wise to ask about any learning curve necessary to maximize your usage of the system.
Other key points to research include:
- The cost of the system: ask about any free versions you can use for testing, and get a breakdown of its pricing (upfront, monthly, custom pricing, etc).
- Implementation speed: consider how long it will take for you to implement and adapt to the ERP system. Ask about maintenance.
From there, review the system and determine if it truly aligns with your business needs. It’s also a good idea to create an implementation roadmap.
Build An Efficient ERP Inventory Management System with Kohezion
Looking for an efficient ERP inventory management system can be overwhelming. However, it’s a wise investment considering all the benefits you can get. You’ll achieve streamlined workflows and position yourself for better scalability while saving money and managing inventory effectively.
Kohezion offers all of that and more. We create robust ERP inventory management systems that fit your business needs. Empower your team and take control of your inventory today with Kohezion.