There are a wide variety of benefits to be had from enterprise resource planning software, from system-wide insight into production, cost and revenue to more specific modules that focus on an individual processes. While businesses should look for a mix of broad and narrow advantages from an ERP system, the ability to improve inventory counts and reduce overstock should be especially attractive to manufacturers and warehousing businesses. Cutting down on the amount of time products spend on the shelf means less operational capital tied up in static inventory and reduced storage needs. Having these additional funds available means it's easier to grow as a business and invest in the future.
Making sure that stock-keeping units are kept low is one of the more specific advantages that ERP can provide. While the vast majority of systems used by manufacturing and warehousing companies include some kind of stocking control, the functionality provided isn't always exactly what an individual company needs. While "manufacturer" is an accurate descriptor for a variety of similar businesses, every organization has a wide variety of unique needs based on the type and cost of product made, as well as the specific market niche. TechTarget pointed to the different methods of assessing inventory optimization, including the more accurate and time-intensive stochastic method where supply chain uncertainty and market volatility are taken into account. Depending on the nature of an individual manufacturer, having the right ERP components in place to measure inventory is crucial.
An all-around effective approach
Having a modular ERP system in place provides a serious benefit when it comes to making inventory management as effective as possible. Businesses looking to avoid the common ERP woe of having to use multiple systems, which was highlighted in research from Aberdeen Group, should consider using a modular approach instead. Companies can select the inventory module that has the most desirable features from a multitude of choices instead of having to select from a limited menu, as is common with all-in-one ERP platforms. The ability to quickly and easily upgrade components based on need and available budget is another major plus for using modular ERP, as companies can continually improve their software instead of dealing with lengthy downtimes and limited options.
Learn how to define your ERP strategy by downloading the white paper entitled "ERP in Manufacturing: Defining the ERP Strategy" from the DMS website today.