When asked how they’re seeking to control costs, respondents to a recent survey conducted by Peerless Research Group for Modern Materials Handling named improving inventory control as a top response. Overall, there is more of a requirement for speed and accuracy, according to the report.
As optimizing inventory management becomes more and more of a strategic imperative, leading companies are integrating inventory software with back-office and accounting systems. Integrated with your back-office systems, an ERP inventory management system can effectively optimize inventory levels, and ensure the inventory asset value on your financial reports matches what is physically in stock—without manual intervention and reconciliation.
What are the Advantages to Integrating ERP and Inventory Management?
ERP inventory management brings several advantages, from reducing data inconsistencies, to easing maintenance and upgrades, to even optimizing cash flow. Key benefits include optimizing inventory to meet product availability and ROI goals, providing inventory visibility to supply chain partners, and easing the process of stating inventory accurately in financial reports.
Implementing ERP inventory management can be challenging. By following this ERP inventory management roadmap, your business can ease that process.
The Three Critical Steps on the ERP-Inventory Management Roadmap
First, a company must establish a robust system of record, ideally launching financials, inventory, and order management and CRM on the same platform, or leveraging software with open APIs that will integrate more easily with existing systems. Having a single view of customer, order and inventory data ensures the business can reliably promise and deliver to customers. By gaining a real-time, unified view of this data, customers have improved gross margins by 1-5 percent.
It’s crucial for inventory and back-office system integration to be real-time, flexible, transparent to users, reconcilable and scalable. Being real-time provides the best visibility to customers and supply chain partners, and ensures that financial reports are always up to date and accurate. ERP systems that offer inventory management capabilities will ease this process, by seamlessly integrating with the system and enabling end-to-end visibility of data.
Once there, leading companies then elevate the system of record, bringing in ecommerce, procurement management, rebate management, warehouse management, and advanced HR and payroll capabilities. By adding ecommerce and other omnichannel capabilities, the company is in a much better place to provide a greater customer experience. Both for B2B and B2C companies, providing the ability to buy online is crucial and it’s a lot more seamless to implement these capabilities when the business can trust the data. With a single system of record, the business is free from the constraints of bolting best-of-breed products onto legacy systems, and the inefficiencies and inaccuracies that occur as a result.
Once these processes function smoothly, innovative businesses look to expand ways to achieve operational excellence. These include more advanced capabilities for inventory management such as mobile technologies, quality management, financial and operations planning, supply chain execution, and project and asset management. Ultimately, the focus turns to more innovative and disruptive strategies such as pricing and margin management and business intelligence. NetSuite has seen its customers improve their actionable insights by over 56 percent.
With a strong operational foundational in place, companies can look to expand with analytical capabilities, and start bringing in more advanced capabilities associated with AI and IoT technologies to accelerate and dominate their industries.
Implementing ERP inventory management can provide your business with the foundation that transforms inventory management from a standard process to a competitive differentiator for your business.