This guest post looks at ERP and inventory management, and stresses the business benefits of improved inventory accuracy.
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. On the other hand, if there are too many products on the shop floor, it could cause a bottleneck.
The Houston Chronicle reported that other inventory issues include damaged materials and inaccurate counts. All of these weak points could ultimately cost the company money and upset retailers and customers. They expect products by a certain date, and it’s the manufacturer’s job to deliver on time.
An inaccurate quantity is one of the major problems small to midsized manufacturing companies face. Material could be in a wrong storage facility with incorrect pricing and identification. With inventory in an inaccurate spot, a warehouse manager may waste time searching for the material. In addition, he or she may not count that product, and it could get removed from the business’s balance sheet.
Shop floor managers need to have a holistic view of the type of product materials on hand and where they are located in the warehouse. When manufacturers have this information on hand, they can ensure the supply chain runs smoothly and efficiently. An ERP and inventory management system offers manufacturers these capabilities.
ERP and Inventory Management for Accuracy
ERP software streamlines the inventory process by allowing companies to know when to purchase inventory, identify cost, figure out how to keep it at minimum levels and determine where to place the inventory.
CTS Guides reported that a company that installs an ERP and inventory management system enjoys a 20-percent reduction in inventory costs, a 17-percent decrease in manufacturing operating costs and a 16-percent drop in administrative costs.
During an ERP selection project, manufacturing companies should be on the look-out for ERP and inventory management systems that help them better view on-time deliveries, improves accuracy of inventory tracking and, most importantly, helps them deliver excellent customer service.
Dusty Alexander is the President & CEO of Global Shop Solutions, Inc., the largest privately held family owned ERP Software Company in the United States with offices throughout the United States, United Kingdom, Mexico, Malaysia, Singapore, and Australia.