Inventory management and stock control are essential for business success, especially if you’re in the consumer-packaged goods (CPG) industry. So, investing in the right stock control and inventory management system is important to keep your business running.
Fortunately, you can find a reliable enterprise resource planning (ERP) system to help you manage your inventory. A good CPG ERP system will help you track your inventory levels and supplies so that you don’t experience overstocking or understocking.
How does an ERP system help you manage your inventory?
An ERP system helps you make well-informed business decisions by giving you real-time inventory data. It will allow you to control your logistics, finance, inventory, and other important operations throughout your supply chain.
With the right ERP solution, you can control these functions from a central system, minimizing errors and enhancing efficiency. Because this system integrates core functions and systems from different departments within your organization, it can collect data from different sources in real-time.
The CPG data insights you gain from the data collected will improve awareness of your inventory levels and successfully predict market demands and your business’s capacity to satisfy them. With proper demand forecasting, you can accurately estimate the best time to sell a certain consumer product and identify the most in-demand product. Your ERP software will also help you forecast your profits and cash flow, allowing you to determine your budget for the next month or year.
Benefits of ERP systems in Inventory Management
Whether you’re a manufacturer or supplier of CPGs, it’s a good idea to incorporate a proper ERP solution into your business. Here are some of the benefits of using ERP software for inventory management:
Better Planning for Replenishment Orders
You should always have accurate data about the quantity of your inventory so that when you get the signal to produce more, you can confidently begin your consumer goods manufacturing process without worrying about overstocking. Your ERP software makes it easy for you to categorize different parts of your inventory so that you can easily know which supplies to order and the quantity required.
Certain supplies are only needed when you have a demand for a specific product. Therefore, you must order the right quantity to avoid wasting resources or understocking.
You’ll also know which products are only ordered when their prices drop and which ones are easy to produce. This way, you can reduce your transactions by ordering enough supplies to satisfy your predicted demand for the next few months.
By optimizing your replenishment orders, you’ll minimize your transactions and enhance the accuracy of your inventory.
Managing Surplus Inventory
An ERP system alerts you when there is a surplus of inventory and what causes the surplus so that you can take the appropriate steps to avoid losses. Sometimes, you might end up with surplus inventory due to changes in the economy or an unexpected drop in demand.
Discovering a surplus immediately helps you take necessary remedial steps, such as contacting your customers and asking them to purchase more or giving a discount on the product so that the surplus can be used up before the product expires. Failing to notice the surplus in a timely manner will force you to move the surplus goods to the trash list, resulting in huge financial losses.
Tracking of Inventory Turnover
Instead of tracking your inventory turnover as a whole, you can do it in segments with the right ERP system. This system allows you to classify your inventory according to its shelf life, demand, and price so that you can easily know which products to promote to increase their demand.
Tracking your inventory turnover in segments allows you to analyze your inventory forecast and know if your assumptions are accurate. You’ll know which products are turning over quickly and which ones are gathering dust on the shelves. Then, you can find ways to enhance your relationship with your customers for a faster turnover and to increase the shelf life of your CPGs by improving your storage conditions.
Lastly, without a proper inventory management system, you might never know which products turn over daily and which ones turn over monthly. Luckily, this system is suitable for CPG businesses of all sizes.
The Bottom Line
If you need a reliable ERP system that will help you manage your inventory, talk to Navigator Business Solutions today. We have a wide range of ERP solutions tailored to CPG businesses like yours!