Manufacturing Inventory Management Crash Course

A simple look at modern inventory management solutions

The phrase “inventory management” gets thrown around a lot. It’s a complicated idea, but also critical for your business success.

The details of inventory management are so complex that you can genuinely get a Master’s degree in it. But if you’re looking for an introductory course, you’re in the right place.

Inventory management has changed a lot in the last few decades, and a modern manufacturing inventory management solution can make the difference between a business treading water and a business thriving.

The Basics of Inventory Management for Manufacturing Companies

Broadly, the goal of inventory management is to avoid stockouts and overages. Having significantly more stock than you can move means wasted money. Having significantly less means missed sales opportunities.

Back in the day, the best a business could hope for was to avoid these two extremes. In a modern manufacturing operation, keeping yourself in the middle between overages and outages is the first milestone.

So, what made the difference?

Time.

With a “traditional” inventory management system built out of spreadsheets and notes on paper, the best you could do was a weekly (or, more likely, monthly) inventory audit. Someone would have to manually count everything that came in, everything that went out, stock on hand, work-in-progress (WIP) builds, etc.

Then, after manually inputting all of that into your spreadsheet, you’ve got to “reconcile” the data and realize that you can’t possibly fulfill that order you received earlier in the week.

In short, it wasn’t ideal.

But with a modern, integrated inventory management system, changes in stock levels propagate in real time.

That means that, with the right system, you can get down-to-the-millisecond updates on what you have, where it is, and where it’s headed.

With that kind of information, you can do way better than looking into the past and seeing how you messed up. In fact, you can use that data to look well into the future and avoid overstocking or understocking before it happens.

Manufacturing Inventory Management Software Integration: Why ERP?

When you start looking into modern inventory management solutions, it’s easy to notice that virtually all of the innovations they introduce would be useful in every part of your business.

Your accountants would certainly be excited about real-time inventory values. And your sales department could close more business knowing they have current, accurate stock levels.

Of course, if you want to make the most of these benefits, you need to integrate those systems.

That could mean getting an accounting solution, an inventory management solution, and whatever other software you need and cobbling it all together yourself. But that approach doesn’t tend to scale well.

The forward-looking way would be to find a system that

• uses the modern design philosophies that allow for high time-precision and reliable projections
• is designed to be an interdepartmental solution that includes inventory management, accounting, and sales modules as part of a larger whole.

If you want to get the best features of modern business software in a unified, company-wide solution, then you’re looking for enterprise resource planning (ERP) software. Click here to get in touch with us and see if AcctVantage ERP is right for your business.