- 19 October 2016
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Inventory management may not come to mind as a primary business growth driver, but given the right conditions and approach, it can wield quite a large influence over the success and opportunities of a business. Alternatively, without proper care, inventory mismanagement can take down a struggling business for good. Manual processes and unreliable tracking can lead to inefficient inventory management, unnecessary spending, poor customer delivery, and negative business performance.
Is My Business Big Enough to Benefit from ERP Inventory Management?
Many small businesses look to cut costs and keep a tight rein on their inventory management by delaying the switch to a new software system and instead, continuing to rely on manual processes. By deprioritizing a sophisticated inventory management system, many small businesses can miss the boat and in turn, prolong the use of inefficient processes long past their expiration date. This can lead to future failure when the company is struggling to keep up with demand. If a small business intends to grow, then early incorporation of systems that can support future expansion is a critical part of positioning for success.
What Will My Business Gain by Adopting an ERP Inventory Management System?
When inventory is at the heart of a company, its health and proper functioning affects every aspect of the business, from its reputation to its financial saliency. An ERP inventory management system not only automates processes, but in doing so it also eliminates errors that plague manual alternatives. These errors cost businesses their clients, market perception, and money, stunting growth efforts.
Inventory errors inherently tend to have a strong growth-inhibiting effect on a business. An inventory error affects a customer, which in turn impacts the reputation and income of the business, which ultimately requires the company to cut back on inventory. Remove these cutback-inducing errors, and a company is able to keep inventory levels up, provide to more customers, and achieve higher customer satisfaction.
What are the Financial Benefits of an ERP Inventory Management System?
Error Elimination – By eliminating errors, capital that would otherwise be spent on patching issues can be redirected towards efforts that support business growth.
Real-Time Reporting – With a system that provides real-time reporting, companies can also review their inventory system and supply chain and make on-the-fly adjustments to spend money and effort where they need it — only when they need it.
Carrying Cost Reduction – An ERP system can help a business lower carrying costs by providing a more accurate picture of inventory pricing throughout the year.
Better Bids – An ERP system can help companies review bids and keep a keen eye on pricing from varying vendors to make more financially savvy decisions.
Scalability – An ERP system can handle larger inventory and transactional volumes and communicate it reliably to the necessary departments. That translates to allowing a company to scale without having to sacrifice time, energy, and money to build a more robust inventory management system.
Customer communication – With an automated central system, customers can gain faster access to product updates and order information, helping a business grow effortlessly without the need to add additional customer management resources along the way.
Inventory management can either be the strong foundation or the weak link in a growing business. A proper ERP inventory management system can support future growth, reduce errors, and eliminate unnecessary spending, leaving a business and its employees free to focus on the bigger picture and get back to building a solid growth strategy.