Implementing an ERP system for inventory management allows an organization to increase control to reduce inventory costs. It provides an organization with the tools to optimize inventory levels, achieve real-time synchronization of goods receipts and inventory warehouse levels, manage inventories using various costing models, record goods receipts and issues, track stock locations and transfers, enables consignment, drop-ship, perform inventory counts, cycle counts, and much more.
The ERP system gives a company the tools to track inventory in the most efficient and effective ways. For example, as soon as an order is shipped, the inventory levels are updated in the system. As stock levels change, notifications can be set to automatically alert the appropriate staff that they need to replenish inventory to meet customer demands.
An organization can precisely prepare for inventory updates by using a guided process called Materials Requirements Planning (MRP). This process provides a clear vision into gaps between existing inventory levels and forecasted demand for each inventory item. Additionally, MRP produces alerts and replenishment orders to keep an organizations inventory at the ideal level.
Through tracking and studying inventory, an organization company is able to perform demand forecasting. The ERP system provides an organization with the ability to predict demand, based on a multi-level forecast instead of relying exclusively on actually received orders. These forecasts enable users to foresee future demands for the product and alter material planning accordingly.
Learn More: The Best ERP System for Inventory Management
In addition, the ERP system delivers an organization with the capability to calculate the landed costs of inventory in order to follow more effective pricing strategies. After all, if an organization cannot determine inventory valuation, then their pricing strategies are just estimations, leading to missing revenue.
To learn how an ERP solution can help improve inventory management for your business, contact Third Wave Business Systems.