Inventory management, as the name would suggest, is the fundamental process of controlling the flow and storage of business inventory for optimal operational efficiency. Effective inventory management is essential for companies across many industries but is particularly vital for those operating in the distribution industry.
While the broad concept of inventory management is relatively intuitive, the minutiae of finely controlling and directing the flow of materials through a distribution operation can be more challenging. As such, many businesses have been turning to ERP systems to help ease the burden and reduce costs in recent years.
ERP systems were developed to track and manage the complex challenges inherent in the manufacturing industry, and have begun to permeate other industries where process management requires robust and detailed data collection and analysis.
ERP systems draw all operational data under the same umbrella by integrating various data pipelines and presenting it through a single dashboard, affording users the tools to analyze, cross-reference, and generate reports of virtually every aspect of a business’s operation.
Distribution ERP differs from traditional ERP systems through the additional tools available for the job processes specific to distribution companies, such as logistics management, inventory management, and more. Some distributors try to patch together off-the-shelf ERP systems with other disparate solutions to meet their needs, but more and more distributors are learning hard lessons this way.
The dedicated ERP inventory management controls are particularly valuable for distributors who need to streamline and optimize inventory management practices.
One of the most crucial elements of inventory management is knowing exactly where inventory is at all times. Manual and/or piecemeal inventory management systems often struggle with tracking the movement and locations of materials in the business when those materials change department, as the tracking for those materials then changes hands from one responsible party to another. This becomes particularly challenging for more extensive distribution operations that work out of multiple locations.
Not having a full and accurate view of all the inventory currently on-hand creates several problems. Many distributors are familiar with the frustration of reordering a part or piece of merchandise when one location or department ran out, only to then discover that it was still in stock elsewhere in the business. By integrating the inventory management system and developing full inventory awareness, distributors stand to reduce instances of redundant and unnecessary reordering significantly.
Manual processes are a notable pain point for distributors. Not only do manual processes eat up a tremendous number of working hours, taking skilled team members away from other essential job tasks, but it is also the primary source of human error that can lead to costly mistakes.
Distribution ERP empowers personnel to automate the majority of the manual processes in inventory management associated with tracking. Lot, batch, and unit tracking are all streamlined as this opportunity for user error is weeded out of the system, allowing a more detailed and accurate view of all items currently in the inventory system. Without having to record and track the movements of inventory manually, the inventory team will have the bandwidth to engage in more impactful processes.
The level of data tracking and analysis inherent to distribution ERP empowers leadership with extensive forecasting capabilities. Gaining a full view of how materials move through one’s operation reveals trends and details that can be used to make vital decisions about future activities. Inventory management challenges like inventory surpluses, deficits, and stagnation can all be used to better direct workflows, helping reduce waste and lower overhead.
When you choose Sage 100, you increase inventory accuracy, complete and ship orders on time – all while adding more customers and growing margins without increasing IT infrastructure. Sage 100 allows you to operate more efficiently and make better decisions.
e2b teknologies is a Sage Authorized partner. We customize, implement, and support Sage 100 ERP software for a wide range of distributor and manufacturing operations. The sooner your business adapts to the new normal of cloud-computing, the further ahead of the competition you’ll find yourself.
Find out how we can take you to peak performance on the warehouse floor, in the accounting department, and across your entire footprint with Sage 100.