Balancing Inventory and Supply Chain Management with ERP for Manufacturing

Inventory and supply chain are intertwined. Disruption in any of the two disturbs health of the organization. Manufacturers need an ERP to balance both. How can an ERP do that? Details in the blog.?

Consider a situation where a manufacturing organization is producing cars. One fair day the organization got a big order.

While in production, the organization realises that specific parts which are very crucial for the manufacturing is not available in the warehouse. The whole production comes at a halt.

On a second instance, an organization committed to deliver one thousand cookie packets to its client. It produced the cookie packets in time, but the shipping got delayed. This resulted in frustration of client and eventually a cancelled deal.

In first incidence, opportunity was lost due to poor inventory management and in second incidence it was lost due to poor supply chain management. In both the cases manufacturer borne huge loss.

How can organizations be sure that no opportunity is lost due to poor inventory management or supply chain management?

How can organization strike a balance between inventory and supply chain management?

The answer is with a manufacturing ERP. Stay on the page to know how.

Problems Inventory and Supply Chain Management Face:

Both inventory and supply chain depend upon a lot of factors. The global political disturbance, weather instability, changing consumer behaviour, etc., have deteriorated already rotten situations like:?

Wrecked global supply chain -

Global supply chain has already been wrecked. Manufacturers were concentrating on just-in-time production.

This means, they did not hold much raw material inventory. Pandemic and war of Ukraine has put more oil in the fire. Frequent shutdowns disbalanced the eco system and shackled each stage of supply chain.?

Less availability of material -

Disruption to supply chain is hitting all stages of supply chain, but the worst hit stage is raw material storage. The shortage of raw material has cascading effect resulting a disrupted supply chain for the whole industry.

With an ERP for manufacturing, organizations can plan production as per the lead time. They can also manage how much to produce for which customer.

Labour shortage -

With growing disturbances in the market, manufacturers are facing soaring problem of labour shortage. Although manufacturers are undergoing factory automation, but men for the machines are also rare.

This again is creating a huge drop in smooth supply chain management. With a manufacturing ERP, lot of processes can be automated and much of the labour issues can be sorted.?

How Manufactures can Benefit from an ERP for Inventory and Supply Chain Management

Enterprise Resource Planning (ERP) has capabilities to automate various processes. From production to finance to human resource, it can automate processes.

There are various ERP solutions, nature -wise! Some are generic and some are industry-specific like ERP for food and beverages, for chemical, for healthcare etc.

Manufacturers should pick up tailor-made manufacturing ERP, just like other industries. Manufacturing ERP can give a holistic view of the whole manufacturing line and supply chain.

It can automate all necessary processes, which otherwise, if done manually, are very tiresome. Besides, having a constant flow of information across departments keeps no room for confusion, gives a close view of supply chain and makes it easily manageable. It helps to strike the right balance between demand and supply.

Supply Chain Management through ERP:

The market conditions today have proven the importance of effective Supply Chain Management and ability to see throughout the supply chain. Manufacturers must know the status of each stage of supply chain.

With better insights, manufacturers can specifically know where its materials lie. This insight is especially useful for planning, execution, and commitment. With exact visibility into supply chain, manufacturers can gain trust in the market. As then, they

• Will never fail their promise,
• Can save huge costs, as there is no last-minute rush, and
• Can optimize resource management.?

With a manufacturing ERP system, manufacturers can forecast and be prepared for seasonal or routine surge. This forecast can be based on historical data or can be based on changing trends.

For example:?There can be a surge in demands of cake during Christmas and new year. This is a seasonal demand. Based on historical data, manufacturer can forecast demand and align its supply chain accordingly.

A process manufacturing ERP, like BatchMaster ERP, can help manufacturer to align the supply chain to meet this demand.

The ERP can show data, which will help manufacturers to take decision before the season.

?Secondly, increased use of robots in various sectors sparked surge in manufacturing of semiconductors.

The changing trend of working across the world put an extra strain on supply chain of semiconductor manufacturers.

A manufacturing ERP can help manufacturers to forecast and align the supply chain accordingly.

Moreover, manufacturing ERP can help to maintain detailed record of suppliers. Having a list of suppliers will enable the manufacturers to diversify its supply chain and make it more robust.

Besides, manufacturers can connect internally with various departments and make a comprehensive report and analysis for making informed decision and smart choices.?

Inventory management through manufacturing ERP system:

When manufacturers have a manufacturing ERP at place, they have good control over inventory.

Manufacturers can get real-time visibility into inventory. Having adequate raw material inventory facilitates continuous production and adequate finished good inventory assures that each opportunity is grabbed.

Both scenarios strengthen supply chain resulting in faster demand fulfilment.

Manufacturing ERP have precise reporting capabilities. It enables manufacturers to analyse supply chain performance, identify bottlenecks, and make data-driven decisions.

These insights help businesses optimize inventory levels, improve production efficiency, and enhance overall supply chain performance, striking a perfect balance between the two ends.

Final thought:

?With so many factors playing altogether, manufacturers are baffled to manage both inventory and supply chain.

The challenge is solved with an efficient manufacturing ERP which gives real-time visibility and control. If inventory is managed properly, half the battle is won by manufacturer since inventory is the basic of any supply chain.

When manufacturer hit the right balance between inventory and supply chain management, it saves huge cost, reduce wastage, and enhance efficiency.

For process manufacturing, balancing inventory and supply chain management is more important because it involves materials having limited shelf life and expiry life.

Hence, process manufactures need a comprehensive process ERP, like BatchMaster.

BatchMaster specializes in process manufacturing and has been a great tool for the industry for last 3 decades. If you are a process manufacturer trying to strike the balance between inventory and supply chain management, try BatchMaster.?