Effectively managing inventory promotes more efficient use of precious working capital, helping to maintain optimal stock frees working capital and prevents losses due to stock-out.
The primary benefit of an ERP system is the ability to track inventory, reduce stocking costs and maximize working capital accurately and efficiently. This significantly reduces administrative and operational costs without sacrificing functionality.
Improving Inventory Forecasting Accuracy
Some modern ERPs come with many built-in AI and ML capabilities. This functionality lets executives review sales data, seasonal demand and other information to predict inventory needs. By comparing historical and current data, companies can devise a robust plan to increase or decrease inventory and storage capacity suiting anticipated market conditions. Key benefits include:
- Artificial intelligence helps predict future demand using historical data
- Comprehensive inventory planning translates to higher customer serviceability, boosting customer satisfaction
Segmenting, Clustering and Classifying Materials
Isolated data is only valuable to that portion of the business. To help the entire business and provide insights, data must be visible to other departments. Using an ERP’s Inventory Management module lets companies tag, cluster and analyse each item or stock keeping unit (SKU). It produces labels that can be read by mobile phones and other portable devices, providing access to a wealth of information while tracking every item.
Making Warehouses More Intelligent
When products are given machine-readable barcodes or QR code labels, companies can track material movement in real-time. ERPs allow warehouse managers to efficiently allocate more space to the items that need it and reduce space from those that do not.
Permit Accurate and Timely Inventory Planning
An ERP system ensures companies maintain ideal stock levels, permitting more efficient use of working capital. Today’s ERPs come with features that help with material requirements planning (MRP). This includes production scheduling, setting up reorder-levels and establishing inventory minimum and maximum levels. The business application tool records lead times related to purchases of raw materials, manufacturing time, quality checking, packaging, logistics and other functions. All of this data combined helps the planning engine create better forecasts.
When a particular product has an unanticipated surge in demand, companies can easily identify substitute products in an attempt to reduce lost sales. Aligning substitute and primary products lets customers looking for affordable alternatives or shorter lead times find workable options, further boosting revenue.
Managing Returns and Order Cancelations
ERPs manage returns with greater ease than older methods. ERPs reconcile sales credit memos and accounting letting companies issue refunds or shipping fresh products.
In the dynamic, often challenging landscape of the trading industry, leveraging advanced tools like ERP systems can make a substantial difference in your profitability. As competition intensifies and the market continues to evolve, the question isn’t whether you can afford to implement an ERP system, but whether you can afford not to.
About ACEteK – SAP Business One ERP System Partner
We’re an SAP Partner, with a long standing track record of successful SAP Business One ERP System Software projects, delivered on time and on budget. The ACEteK team has established its reputation, and differentiated itself from its competitors, by offering all its clients expert knowledge and advice, combined with a friendly, personal and attentive service.
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