Enterprise Resource Planning involves careful analysis of one’s inventory. You want to find the right mix of ample inventory for in-demand products, but not to overload storage space with products that do not sell well which takes away from the organization’s cash flow. ERP is a key element of the business model and essential in all product-based businesses. Manufacturing businesses especially have to focus on a streamlined purchasing department.
To examine the inventory levels, you’ll want to take a look at the company’s database and get reports on current inventory levels. Let’s assume you are a wholesaler of finished goods. While manufacturing companies will look at raw material levels, wholesalers of goods will examine finished goods inventory levels. Replenishing these levels needs to be accurate. Most companies keep track of their inventory with computer systems that record all incoming and outgoing merchandise. Drawing reports involves running queries in databases like Microsoft Access or SQL. Determining the right inventory levels include many factors such as: sales history, market trends, OEM fitments, forecasted demand, etc, etc. Special attention may be required by some suppliers because of backorders or discontinued items. New products are released as well in which case a new product rollout inventory will be necessary for all distribution centers to determine the products success.
Typically, products are ordered on a recurring basis so as to continually get shipments from the supplier. Although these shipments are recurring, product inventory should be ordered in quantities for four to six weeks of sales forecasts. This is done because circumstances may prevent the product from being shipped. Unforeseen manufacturing difficulties and carrier weight necessities can lead to increased product demand. Making sure the orders are placed with the supplier is vital for the overall company success because orders are filled in the order in which they are received.
Excel spreadsheets are a great tool for the ERP purchaser or replenishing analyst. They help forecast sales and determine reorder points for all products sold. Coordination between departments may be necessary in order to provide for vendor specials or sales or distribution of spending throughout many vendors. Discrepancies in inventory numbers may need to be physically verified and counted by hand and be inputted into the database as the actual figure. Many different ordering software programs are available to the ERP professional. SSA Distribution replenishment is a great software program which has many helpful tools to the analyst such as graphs and other forecasting tools.