There are many reasons for a manufacturer to implement a new ERP solution such as Microsoft Dynamics NAV 2015. Among the most significant of these is to be able to use a more efficient and effective means of working out inventory for parts and products that need to be made and shipped to customers. Physical inventory management is a core component of any manufacturing business since it helps it control orders and better oversee sales. Inventory management modules are a necessity for many companies, with each update of software delivering a new line of benefits.
A better grip on orders
There are a multitude of benefits that come with using ERP software for inventory management, according to ERP Focus. The most basic example of this relates to orders. When it comes to raw materials and specific parts for a larger product, companies need to be on top of replenishing these materials so that orders to customers don't get delayed due to a missing critical component.
With ERP and inventory management software, the replenishing problem is resolved through proper planning. Rather than guessing when to purchase new metals or polymers, a business can properly schedule such orders based on need and current quantity. If the system is demand-based, the software can automatically create an order for the amount needed to meet the current situation. In the latter situation, once the availability of a certain material drops below a specific threshold, replenishment is requested and invoiced.
This can lead to the development of longer-term strategies through forecasting and planning, as suggested by ERP Software Blog. Instead of simply taking guesses on demand, ERP software with inventory management can use past history of orders and inventory counts to reliably forecast future orders. It can also help determine the amount of capacity that is needed by the company in the coming years. It may be a good idea to open new warehouses in specific regions, so as to ship goods faster to customers that demand it.
With a better control over orders, mitigating surplus inventory brings down the cost of production runs, leading to better profit overall. These gains can be returned to the company to scale up operations with new products or areas of operation. Better control of physical inventory and related orders can improve the overall outlook of the company.
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