BUSINESS PROCESS IMPROVEMENT
A Smarter Approach to ERP and Inventory Control
Many of the manufacturers and distributors we team with experience challenges around ERP and inventory control.
As an independent ERP consulting firm, it’s a topic that comes up often as project teams look to Ultra to understand the best way to work through enterprise system selection to improve key processes related to inventory management.
Whether a complex manufacturer or a regional distributor, integrated ERP and inventory control is a cornerstone of successful operations. As an example, wholesale distributors today find their margins squeezed from all sides. While customers seek faster and more accurate fulfillment, price continues to be a primary decision factor. Inadequate inventory control processes can cripple an organization.
Likewise, the last thing a manufacturer wants to encounter is a material outage during a period of high demand. After re-ordering the material, it may take days to arrive, disrupting the supply chain process. Yet if there are too many products on the shop floor, it could cause a bottleneck.
When considering ERP and inventory control, it’s tempting to first identify features and functions that offer inventory management capabilities. ERP can help manufacturers with a range of inventory control functionality, from parts management, bill of material and inventory counts to label printing, warehouse control, inventory transactions and delivery tracking.
ERP and Inventory Control – A Smarter Approach
A smarter approach is to think in terms of business process improvement.
Instead of starting with technology, analyze processes and look for waste that comes from siloed systems or highly manual inventory control. This includes considering downstream and upstream communication and how the process could be improved overall. A thorough business process review will surface gaps in the process as related to the current state.
During the review, involve key business users, inventory department management, and an expert business process improvement consultant. It is important to have an outsider, like Ultra, so they can provide an independent opinion of the inventory process.
Driving performance improvements is about “configuring the future state” as it relates to inventory management best practices.
We can’t underestimate the value of setting goals for performance improvement that can be measured after the go-live. Capture key performance indicators for the enterprise as part of the current state analysis – then compare them to a new set of KPIs after using the new technology for some time.
3 Improvement Areas with ERP and Inventory Control
How can ERP technology impact inventory control? After offering process improvement services during several projects, here are three thought-starters:
- Methods to improve data entry – via modern barcode scanners or other devices which reduce data entry errors, speed data collection and drive timely information and integration of warehouse data into the ERP System.
- Real-time and enterprise-wide reporting – to gain the ability to access real-time sales/work orders, purchase orders and inventory information that would flow seamlessly between the warehouse and ERP system as processes are performed.
- Integration with ERP – which is critical to achieving their desired future state. As an example, it’s critical for business process improvement to integrate data transfer between the warehouse and ERP for timely and accurate data for invoicing, purchase order payment and inventory tracking and management, all without manual keyboard data entry.
Learn More about ERP and Inventory Control
Ultra’s insight about ERP and inventory control was recently featured in an industry publication.
See the article from IT Toolbox entitled “Five Ways ERP Can Improve Inventory Control” with analysis by technology and enterprise system thought leaders, including Ultra’s CEO and Founder Jeff Carr.
Contact the Ultra team to explore your organization’s ability to leverage ERP and inventory control.
Jeff is the founder of Ultra Consultants, a well-known voice in the ERP consulting industry and an expert on ERP solutions for discrete and process manufacturers. Over the last 40-plus years, his companies have helped more than 2,000 organizations improve their business processes, select ERP software and implement advanced solutions.