What is an ERP Inventory Management System? [Full Software Review]

Just getting orders right isn't enough to stand out. According to UPS Capital's survey, the main challenges brought by increased e-commerce volumes include faster order fulfillment, managing demand surges during busy periods, and improving real-time shipment tracking and transparency.

Whether you rely on a third-party service or handle deliveries yourself, your brand needs to ensure customers get their orders on time. Using and improving an ERP inventory management system can help your business manage inventory levels better. It also allows it to make warehouses more efficient, and improve the last stage of delivery.

Jump To The Section That Interests You Most:

• What Does ERP Inventory Management Involve?
• Benefits of Using an ERP Inventory Management System for Ecommerce Companies
• Key Features to Consider in ERP Inventory Management Software
• Enhancing Last Mile Delivery Efficiency Using Your ERP System
• FAQ on ERP Inventory Management

What Does ERP Inventory Management Involve?

Enterprise resource planning (ERP) involves integrating and centralizing various business processes and tools to streamline operations. The aim is to create a cohesive approach where each workflow supports others. For instance, integrating forecasting and ordering processes helps maintain optimal inventory levels efficiently.

ERP inventory management systems are software that facilitate this integration by combining essential workflows and tools. These systems serve as a centralized platform for businesses to manage their inventory, simplifying access to necessary tools and saving managers time.

Key functions of ERP inventory management systems include:

• Tracking products
• Using barcodes and tags
• Managing the supply chain
• Planning logistics
• Generating reports
• Forecasting inventory

Benefits of Using an ERP Inventory Management System for Ecommerce Companies

There are many advantages to employing an ERP inventory management system for e-commerce. These include merging essential functions, bringing data together in one place, and facilitating smooth business growth.

Integrating Supply Chain and Logistics Functions with ERP Inventory Management Systems

ERP inventory management systems bring together two important functions: supply chain management and logistics planning. These terms are often used interchangeably, but they are distinct practices that rely on each other for effectiveness. Supply chain management involves overseeing the entire lifecycle of inventory, from creating products with raw materials to delivering orders to customers. Logistics coordinates the movement of raw materials, finished products, and information within the supply chain. While these processes are different, keeping them separate doesn't make sense, highlighting the importance of ERP's centralization and data-sharing capabilities for retailers.

This integration is crucial for ensuring efficient order fulfillment. It significantly influences how customers perceive your brand. To fulfill orders effectively, organizations must coordinate deliveries seamlessly. Yet, without comprehensive information about the entire supply chain, accurately coordinating the logistics of last-mile delivery becomes impossible.

For instance, imagine a customer orders a custom piece of jewelry from an online jeweler. To provide an accurate delivery timeline, planners need detailed information about the entire supply chain. This includes knowing what materials the manufacturer needs to order and estimating how long it will take to create the jewelry.

Enhance Data Access and Improve Analytics

Having access to more data and improving analytics is crucial for businesses. Even minor data inaccuracies can lead to costly consequences for ecommerce companies and retailers, such as inaccurate inventory projections, missed reorder points, and disruptions in order fulfillment timelines.

Many systems are designed to automatically gather data, saving time by eliminating manual tracking and reducing the likelihood of human errors in data entry. ERP integrates multiple tools, enabling it to collect data across various aspects of your business. The more data you have, the better your business analytics become, allowing for more accurate forecasting of your business needs.

Easy Scaling

As your business expands, so does your customer base, leading to increased sales and larger inventories. However, managing a larger inventory becomes more challenging as it grows, complicating workflows. ERP inventory management solutions simplify scaling by automating tasks that become more intricate as your business expands.

For instance, the platform can monitor inventory levels and automatically reorder stock when supplies are running low.

Key Features to Consider in ERP Inventory Management Software

There isn't a one-size-fits-all inventory system for retailers. Yet, there are important factors to look for when choosing an ERP inventory management tool. Firstly, it's crucial to find a tool that fits within your budget. Additionally, opt for a solution with a user-friendly interface that operates in the cloud for easy accessibility. Check the support options provided by the software vendor to ensure help is available if issues arise. A good ERP tool will automate essential functions like inventory management, warehousing, and order processing.

Managing Inventory Across Multiple Channels

Multi-channel inventory management involves retailers tracking inventory sales across different outlets and warehouses. This includes wholesale, ecommerce, and traditional retail channels. Software with multi-inventory management features benefits retailers in several ways:

• Saves time by providing managers with centralized data on purchase orders and inventory levels across all sales channels and warehouse locations.
• Improves inventory forecasting by utilizing real-time data to determine inventory requirements, establish reorder points, and prevent issues such as low stock or stockouts.
• Enhances customer experience by allowing customers to shop seamlessly across preferred platforms, whether online or in physical stores.

Managing Warehousing and Tracking Stock

Multi-channel inventory expands sales opportunities, but retailers can't meet demand or maximize profits if they struggle to locate products for orders. Efficient warehousing practices are essential for all organizations, whether a small business with one storage facility or a large corporation with multiple warehouses. An ERP system equipped with warehouse management capabilities helps retailers prevent issues like delayed order fulfillment or missing products by streamlining processes:

• Warehouse layout optimizes storage efficiency, guiding managers on organizing inventory and placing popular items in easily accessible areas to facilitate order fulfillment.
• Picking and packing streamline the process of locating products within the warehouse and preparing them for shipment.
• Receiving and putaway simplify the task of receiving new inventory shipments and correctly storing products in designated areas within the warehouse.

Managing Invoices and Purchase Orders

Efficient purchase order management starts when a customer selects an item for purchase and concludes when the invoice is settled. A comprehensive ERP system with invoicing capabilities and point of sale (POS) integration simplifies this process by generating invoices automatically and sending them to customers upon order placement. Integrating invoicing with order management allows the ERP to update automatically, notifying the warehouse team to initiate order fulfillment.

Enhancing Last Mile Delivery Efficiency Using Your ERP System

Effective inventory management starts by maintaining the right stock levels and continues until products reach customers. This involves overseeing processes from receiving raw materials to organizing warehouse inventory. Using an ERP inventory management system streamlines these tasks and offers retailers valuable data insights, enhancing operations like final delivery.

Once the inventory system is in place, it automatically tracks and stores data on all business processes. This data includes details that can optimize final delivery routes, such as which packages are in transit and their destinations. Integrating your ERP with a last mile delivery solution like eLogii simplifies route optimization for your delivery team, requiring just a few clicks to generate efficient routes.

After it is integrated, you can easily import order and delivery details from the ERP to eLogii. You can then specify route details, like service areas, delivery windows, and break rules. eLogii will automatically create delivery routes, keeping all these details in mind for all drivers and orders, saving managers time and improving efficiency.

FAQ on ERP Inventory Management