Overcoming inventory management challenges: How can your ERP help?

From raw materials and parts, to equipment and finished products, managing your inventory can often feel like walking a tightrope.

You need visibility of everything, right down to the smallest components (including any sizing and colour variations). Goods move quickly, production schedules are tight, and customer demands can change at a moment’s notice. Managing your inventory manually will lead to problems sooner or later, especially if your business is growing and your operations are becoming more complex. Stockouts can lead to delays, lost sales, and customer dissatisfaction – yet overstocking can hit your cashflow and eat into your margins, especially if it’s difficult to shift.

Supply chain uncertainty has also added to the challenge in recent years too. Covid, Brexit, the war in Ukraine and the Red Sea crisis led to huge supply chain disruption, and manufacturers had to respond at speed when some parts and materials were in extremely short supply. This is why growing numbers of manufacturers are turning to a cloud-based ERP to manage their inventory in real-time. They’re leaving behind outdated software and spreadsheets – not only because it helps them to save time but because it reduces the chance of human error too. It’s easy for an operative to type the wrong figure into a spreadsheet or system, resulting in too much or too little stock being ordered.

How can an ERP help?

The good thing about an ERP is that you have a complete view of your inventory, including what it is and where it is. ECI’s Ridder iQ streamlines the entire process, with real-time tracking and automated ordering to speed up tasks, and reduce the chance of errors. Below are just five of the ways the software could support your business.

Five ways to use an ERP for inventory management

Real-time inventory tracking

ERP systems offer real-time visibility into stock levels across your factory or sites, helping you to avoid overstocking or stockouts. With a clear view of your inventory, there won’t be any unexpected shortages – which could delay production – or costly excess stock. Real-time tracking also helps you to monitor KPIs like First Time Right (FTR), Quick Response Manufacturing (QRM), and Production Schedule Attainment.

Ridder iQ includes a calculation and bill of materials (BOM) function to help you keep a secure record of all materials and components. You’ll be able to see quantity, cost, descriptions, supplier information and more – and keep a close eye on progress by closely monitoring your pre- and post-calculation.

Automated ordering

Your ERP should allow you to set a minimum stock level, so inventory is automatically ordered when it hits a certain level, with an alert system in place to let you know. This is more efficient than ordering stock manually, and cuts out the stress and cost of last-minute orders. The system also keeps track of deliveries and notifies you if a supplier is late, so you can chase it up to prevent bottlenecks.

Ridder iQ has a work preparation feature, so you can keep track of all stock and processing. It lets you automatically generate reports like order forms and receipts, saving time and helping you maintain an audit trail.

Traceability

A modern ERP is essential for traceability. Your team needs to be able to track and find materials without spending hours searching for them. Products or components can be easily identified by serial or batch number within the system, so you can manage any queries or recalls. With a traceability module, you’re also able to correctly manage certified materials and certificates easily, and halt any deliveries of incorrect products.

Demand forecasting

With sales, production and supplier data held in an ERP, forecasting demand is easier and more accurate. You can take historical data and current market trends to make informed predictions avoiding overstocking.

Collaboration

Teams across your business may need access to real-time inventory data. For example, finance departments always need to understand how much has been spent and invoiced, while sales teams can manage customer expectations when they know exactly what’s in stock. An ERP centralises data, so all authorised users are able to see stock levels, purchase orders or sales at a glance. With one up-to-date set of data, all teams have a single version of the truth from which to make decisions, and there’s less risk of key information being lost in email chains.

ECI’s Ridder iQ will simplify and automate inventory management enabling you to tap into different markets or take on new orders. With more accurate demand forecasting and visibility into inventory, you’ll never run the risk of shortages and can free up cash.