How Can an ERP Solution Manage Your Inventory Effectively?

Managing inventory is not a piece of cake. Business owners are well aware of the bottlenecks they face daily to efficiently utilize their resources, and this is where the use of ERP systems can bring a much-needed change. For instance, take a super-market with a long list of products. With the use of ERP systems, organizing these stock items can be a lot more convenient. To explain better, let’s see why the use of ERP is so critical for inventory management.

Handling the Surplus

By taking advantage of an ERP system, surplus inventory would be immediately notified to you. This means that you can observe and analyze the factors behind overstocking like re-thinking its pricing strategy or realizing the plummeting demand of an item. Depending upon the actual reason, you can then take important decisions like returning the product.

Since ERP offers quick updates, it saves a lot in the way of costs. On the other hand, when such figures are reported after a delay, then the surplus might have to be sent in the trash, thereby increasing losses. By maintaining an optimal level of inventory, businesses can slash their holding costs.

Tracking Turnover

When a company purchases inventory and sells it to the customers, the frequency of these sales are referred to as inventory turnover. Thorough inventory analysis is important in determining whether the company has sufficient buffer stock or needs to reorder more inventories. 

ERP systems come up with a plethora of features related to inventory that facilitate users to classify their inventory accordingly. Therefore, these systems help users keep a track of inventory turnover both in overall figures and under individual inventory categories. Some of the questions which can be answered with ERP include:

  • Do you need to purchase an item for a smaller quantity?
  • Is it possible to increase the shelf-life of your items by the use of improved environmental conditions?
  • Should you opt for Just-in-Time processing or keep a buffer stock at all times?


By employing an ERP system, you would be able to save a great deal of money and time with better optimization and organization. Organizing the data assists in getting a greater level of customer retention and satisfaction. The aspect of organizing data refers to things like increasing the number of your best-selling products, removing slack and getting rid of obsolete inventory.

Likewise, organizing inventory can also refer to gathering and storing parts together which are required to fulfill specific orders. As a result, productivity and efficiency get a huge boost and employees can direct their attention to more important issues, thereby maximizing resource utilization.

Final Thoughts

Gone are the days when individual management systems were created to supplement the processes of each business department. This is 2018, where every sensible business manager is using an ERP system.  Whether you need tips for using enterprise resource management software or customized ERP solutions to address your business needs, feel free to contact ERP Books today.

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