Hurray for Inventory Management!
Good news! That big new customer you’ve been working with for over 6 months has finally placed his first order! You’ve managed to beat out the competition and promote your high quality products and service. Congratulations on the big win!
Now you have to prepare the assembly, manufacturing or delivery of that first order if you want to consolidate that important relationship and convince your new customer that he made the right choice. The clock’s ticking. You consult your accounting system that suddenly shows that you don’t have the inventory you need. NO WAY! Just this morning you saw in your warehouse recently delivered pallets of the product in question.
Once again, your management system has failed to let you know what’s really happening. You’ll have to force a more or less bogus transaction knowing that you’ll probably have to correct it later…
Low-end enterprise management systems are often limited when it comes to inventory management (for example, finding out that inventory is available only when your supplier’s invoice is entered). That slows down your processes, often forcing you to enter information more than once and do a lot of management outside the system (lucky you’ve got Excel!). Not to mention the need to take regular counts to get a clear, accurate picture of your inventory.
Enterprise resource planning (ERP) systems give you more comprehensive management of your inventories right in the system (so long Excel):
- You can set minimum stock levels so you’re not surprised by missing inventory (the system then prompts you to place a resupply order).
- Your warehouse people will be able to use the purchase orders you placed with your suppliers to make receiving easier (no need to re-enter the data).
- You’ll have tighter control when the time comes to pay your supplier by comparing the amount of its invoices with the purchase order already in the system, and with the quantities received (goodbye expensive mistakes).
- A good system will also let you reserve inventories you haven’t yet received for a specific order from a customer so you can be sure your most important customers are given priority (hello better customer service).
Being able to use the same system, where each employee indicates what part of the process he’s responsible for handling (purchasing, reception, payables, shipping, billing, etc.), gives you an accurate picture in real time, and you avoid requests, usually urgent, of the type “Can you look after this now? I can’t do it…”
Your current system may not be properly supporting you with your day-to-day inventory management activities. An integrated management system will quickly make you more effective, give you an accurate picture – in real time – of your stock, and make you shout: Hurray for inventory management!