How can ERP System Improve Inventory Accuracy?

How Can an ERP System Improve Inventory Accuracy?

“Make your product easier to buy than your competition, or you will find your customers buying from them, not you.” – Mark Cuban

In today’s dynamic world, managing every aspect of your business is imperative to productivity. Unquestionably, inventory is one of the largest expenses incurred by businesses as it drives production, sales, and customer service. Inventory is a major current asset in the business and should be maintained efficiently to avoid excess stock increases and unnecessary inventory carrying costs and to ensure working capital requirements. Inventory management is the foundation of any company within the wholesale and manufacturing industries. Inventory reliability is the key element to ensure the smooth functioning of operations.

Managing inventory with a comprehensive Enterprise Resource Planning solution is a prerequisite to proper inventory management. From planning, organizing, coordinating, directing, and allocating resources to facilitating paperless transactions, scanning barcodes, etc., an ERP manages many business functions with ease. An ERP system offers a streamlined solution to your total business needs by providing inventory information quickly, efficiently, and accurately. With Inventory Management, you gain the insight needed to make better, timelier business decisions.

What is inventory accuracy?

Inventory accuracy ensures that the right balance of stock is maintained in your warehouses. To ensure inventory accuracy, a cycle count is needed. A cycle count is an inventory auditing procedure that ensures counting a small subset of inventory in a specific location on a particular day.

It is true that to balance inventory levels, it is crucial to have a deep understanding of the customer demand for your products. But, cycle counting helps to curb this scenario. Any error witnessed during these counts is addressed to the inventory accounting records.

Inaccurate inventory can lead to:

  • Low service levels
  • Increased operating cost
  • Poor customer service
  • Product obsolescence or spoilage
  • Extra storage cost
  • Higher inventory levels

How can an ERP system improve inventory accuracy?

Maintain an efficient and well-defined warehouse

Before procuring raw materials or other goods in your warehouse, make sure you plan and strategize appropriately. While excess goods can lead to blocked capital and storage costs, stock-out can lead to unsatisfied customers. It’s a dicey game. But if you have a reliable ERP solution, it can change the entire scenario.

ERP or Enterprise Resource Planning is a comprehensive software solution that encompasses a wide grouping of business processes in ‘modules’ – production, finance, sales, inventory, accounts, customization, supply chain planning, and more. It is wise to invest in an ERP system that can help you accomplish comprehensive tasks regarding warehouse management with just a few mouse clicks.

Make sure you maintain well-organized bins or shelves to locate inventory items, whenever required. Every space in the warehouse needs to be maintained and optimized with utmost accuracy and mindfulness. An inventory management system automates the processes of checking purchase orders, receipts, issues, and transfers of the inventory. It lets the warehouse manager accomplish the given tasks in a streamlined way.

View a bigger picture of your organization

If processes and procedures are in place, inventory can be maintained effectively and precisely. When an inventory issue crops up, warehouse managers should have the knack of reacting positively to streamline every function. An ERP system is pre-built with automated solutions that are focused on streamlining warehouse activities – warehouse transfer, inbound and outbound transfer, barcode scanning and generation, label printing, and much more. This helps you plan for materials that need to be procured, determine which payments to make, which vendors to contact, where to stock the items, and more. One complete software lets you manage sales, purchasing, quality checks, lot tracking, cycle counts, inventory operations, finances, accounting, etc. It helps you to eliminate errors and work delays and encourages planning, reporting, and forecasting, and it allows employees to work with efficiency.

Increased customer satisfaction

When you get accurate information about inbound and outbound shipments, item locations, and product pricing, it eliminates product shortages and this means that your customers will receive their orders on time. An ERP system is one of the key software solutions in the manufacturing industry to streamline overall business processes. It manages customer calls, queries, and the entire customer lifecycle. ERP fosters customer satisfaction by offering:

  • Streamlined shipping operations
  • Good supplier relationships
  • An improved user experience
  • An equilibrium between supply and demand
  • Less rework and data redundancy
  • The removal of manual processes

Keep a check on the quality of items in your warehouse

ERP systems are tightly integrated with Quality Management functions. It ensures that items which are stored in the warehouse are ready to be used in production and aren’t damaged. This lays focus on lot traceability, managing test processes, and the use of quarantine orders to set aside items in quarantine. An ERP solution ensures that timely decisions are made by the higher-ups to control compliance and predictability. Businesses can plan for single-level or multi-level sampling and easily track batch and serial numbers to support quality control operations.

ERP lets you plan an inventory roadmap with MRP, MPS, and cycle counting

ERP supports Material Requirements Planning and a Master Production Schedule. MRP ensures that the warehouse is stocked with the right amount of inventory for production to avoid customer dissatisfaction. MRP facilitates planning for multi-level processes – it allows you to track inventory, specify timelines, manage data sources, and adapt to changing demand. On the other hand, MPS manages lead times, plans for finished goods, ensures allocation of resources, and more.

To ensure that the right amount of stock is available in the warehouse whenever you need it, ERP is the one-stop solution to invest in. It reduces unnecessary expenses and unwanted stock. OptiProERP with SAP Business One is a complete Enterprise Resource Planning solution that nurtures a productive work environment. Driven by a team of well-versed professionals, SAP-certified consultants, and developers, it is a powerful manufacturing ERP software solution that caters to a wide range of industries. To know more, email us at