Companies that carry inventory often focus their cost-cutting endeavors on inventory, and those companies often use inventory as a measure of determining the company’s success and growth. So it is not surprising that when a company decides to purchase distribution management or ERP (enterprise resource planning) software, it is usually for the purpose of finding ways to reduce inventory.
This article, details four ways to leverage the power of ERP software for better inventory control and management.
Inventory represents a company’s cash investment and companies should absolutely keep a close watch over it as a way to gauge how well their business process is running. Having inventory close and on-hand allows companies to deliver goods, parts and/or materials quickly and to the satisfaction of customers.
There are two parts to inventory management: 1) knowing what you have and 2) managing acquisition (replenishment). The four strategies for inventory control:
- Maintain accurate inventory records; expect higher operating costs
- Proactive planning to avoid shortages and overstock situations
- Focus on improvement to get incrementally better over time
- Reduce lead times and lot sizes by reducing the “fixed” ordering costs
Inventory management software such as ERPNext does much more than paper file cards or Excel spreadsheets. You can use it to accurately track items in multiple locations, track lots and serial numbers, inventory valuation, quality control holds and much more. You can also use material usage statistics and replenishment lead times to determine each item’s order point and replenishment. The results are fewer back orders and lost business, reduced disruption and lower costs of expediting.
If you are interested in evaluating ERPNext for your business, contact the industry experts at consulting@clouderp.biz
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