Any business that deals with physical products needs to have a solid inventory management system that can carefully and accurately order, store, manage, and track their raw materials. Regardless of industry, a powerful inventory system can significantly improve business operations so that owners know exactly when to fulfill orders and are immediately notified in case of a shortage.
Despite its obvious advantages—especially for companies that rely heavily on the supply chain—inventory management is considered to be one of the biggest pain points for most companies.
Thankfully, newer technologies, such as enterprise resource planning (ERP), have automated this process. Not only has this improved data collection and augmented the way business owners are notified of possible inconsistencies in inventory, but it has also freed up the human workforce so that they can focus on other, more high-level tasks.
What Is ERP?
It is first important to understand what ERP is and how it can help with inventory management. Despite common perception, ERP is not a single solution but a series of functions working together in a unified system. Depending on where and how it will be used, an ERP can be configured to automate and manage various core business processes, from finances to human resources to even the supply chain.
One type of ERP is known as cloud ERP, which gives authorized users remote access to critical data and software functions. Many companies today rely on cloud ERP to manage various business processes and use this as a way to scale their business accordingly. This has become an invaluable tool when it comes to inventory management since a business can communicate seamlessly with its business units in remote locations while getting real-time updates and accurately keeping track of their inventory and materials.
However, it’s important to understand that not every cloud ERP is the same, and you need to speak with your software provider to design the right solution for your needs. Keep in mind that your cloud ERP needs to adjust to your operations, and not the other way around.
That being said, a great ERP software should deliver these five benefits to your inventory management.
Accurate Accounting
You need to be accurate in your inventory management. Any miscalculation can lead to either over or understocking materials, which will negatively impact your business. It is a delicate balance of always ordering the right number of raw materials each time so that nothing is wasted and everything is used within the proper time. However, this requires hundreds, if not thousands, of man-hours counting and recounting stock items—and even then, is still prone to human error.
Cloud ERP software solves this problem by tracking inventory at all stages. Because everything is automated, accounting is done much faster and with more efficiency.
Real-Time Management
A cloud ERP offers you real-time connectivity to all your warehouses at once. Further, your ERP delivers all necessary data to the cloud so that you have an eagle’s eye view of every warehouse you own without having to physically travel to each location.
It must also be noted that a cloud ERP system removes the limitations imposed by traditional IT infrastructures. Whereas before you would need to purchase bulky and expensive hardware that you would then have to install onsite, now you have a cloud platform that delivers virtually unlimited resources with absolutely no additional hardware cost.
Trend Tracking
Inventory management is not limited to just ensuring that you can accurately track your stock at all times. Today, it has become important to know how your products are distributed at each milestone. Do your products sell more during a certain time of the year? Does one of your products sell more than others? Knowing this data allows you to make more informed decisions about the profitability of your business.
A modern inventory system streamlines supply chain management so that you know what to order and when. This can significantly impact your business operations and improve your chances of making the most out of your products.
Improved Finances
Most business owners don’t consider finances as part of their inventory management system. However, implementing a cloud ERP can help you manage your finances much better, as everything is now fully transparent. With an inventory system, you can clearly see what you need to order and when to make them. Since everything is automated, you are more confident in your business decisions as you know there is less chance of inaccuracy.
Keep in mind that you can configure your ERP system to have more functionalities related to finances. This way, you can have an active record of all transactions and produce real-time documentation.
Consolidated Information
A cloud ERP consolidates information into a single database. This allows you to view your distribution process at every stage, from procurement to shipping, so that you can make snap decisions and adapt to changing circumstances when needed. This streamlines your supply chain while optimizing your internal processes. Now, you are no longer hindered by disconnected data silos that may provide mismatched information.
When it comes to modernizing businesses, ERP systems have done a lot to unify the various processes and data points that make up their respective day-to-day. Cloud ERP in particular can aid with the inventory management of a company thanks to its remote capabilities as well as its ability to give users access to real-time data regardless of location. If you want your company to stay competitive in today’s digital age, then you should seriously consider taking advantage of the benefits that cloud ERP has to offer.-Branded Content
