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Utilizing ERP Software to Solve Inventory Management Challenges 

Accurate inventory management is critical in the manufacturing and distribution industries.

Inventory management entails making sure that sufficient raw materials are kept in stock to prevent disruptions and delays in manufacturing processes.

Further, proper inventory management requires that finished products are always kept available to fill customer orders on time.

Companies in the manufacturing and distribution industries know that inventory management is not as easy as one might think.

Inventory Management Challenges Manufacturing and Distribution Companies Face  

Inventory Overstock

Ordering raw materials according to a specific schedule is not a solution for properly managing inventory. Similarly, proper inventory management does not mean that manufacturing and distribution companies should maintain huge warehouses that are always filled to the brim.

Overstock of inventory is costly to manufacturing and distribution companies. Among other costs, there is:

  • The cost of insurance against damage or destruction of inventory
  • The cost of leasing or owning unnecessary warehousing space
  • The costs of securing and protecting warehouses and inventory

Difficulty Sharing Information

It is important for manufacturing and distribution companies to be able to share information between various company departments, as well as with outside vendors and customers. 

The ability to share information helps to make sure raw materials are always properly stocked, and also allows customers to know when they can expect their orders to be filled.

How ERP Systems Help Inventory Management

One powerful way manufacturing and distribution companies can properly manage their inventory is by implementing and using an Enterprise Resource Planning, or ERP, software solution.

ERP software allows manufacturing and distribution companies to centralize the data produced by the different departments in a company. By centralizing that data, company departments are able to, among other benefits, share accurate data in real time.

The ability to share accurate data in real time provides for better coordination between the company departments, increased efficiency and productivity, and strategic business decisions to be made more intelligently and rapidly.

Advantages of Using ERP Inventory Management

Manufacturing and distribution companies that implement ERP software realize many advantages when they implement an ERP software solution. Some of these advantages include:

Accurate Inventory Tracking 

ERP software keeps track of inventory in real time. With ERP software, there is no delay waiting for reports to be prepared in order to know current and expected inventory levels.

Further, because ERP software stores all company data in a central database, the ERP software creates a “single source of truth.” What this means is that everyone in the company is using the same, updated data.

With an ERP software solution, no longer will there be the problem of different departments working with data that is conflicting and out of date.


Once ERP software is implemented and being used, the need for time-consuming, error-prone inventory hand counts is eliminated.

With its features that allow precise inventory tracking to happen in real time, ERP software helps automate the processes of ordering raw materials and shipping out finished products.

The data created by different company departments is shared automatically so that spreadsheets and reports do not need to be manually prepared. The different company departments are able to manipulate and process company data according to the specific needs of the department.

The automation made possible by ERP software, by reducing duplicated labor and the time spent on correcting errors, ultimately saves manufacturing and distribution companies time and money


Manufacturing and distribution companies that use ERP software are able to forecast supply and demand more accurately than companies that do not use ERP software.

As previously mentioned, ERP software solutions centralize the data produced by the various departments of a company. That centralization allows company data to be processed collectively, rather than in isolation. Accordingly, accurate forecasts can be made for:

  • How long it will take for raw materials to be received from a particular vendor
  • How long it will take for finished products to be delivered to a particular customer

Manufacturing and distribution companies using ERP software can more accurately anticipate when demand for finished products will be above or below average. Accordingly, company management can confidently make inventory level adjustments while still making sure customer orders are timely being delivered.

End-to-End Inventory Analysis

Importantly, ERP software allows manufacturing and distribution companies to perform end-to-end inventory analysis. What this means is that ERP software allows company management to know, from looking at a single interface, information such as:

  • Average cost of inventory
  • Changes in the cost of inventory
  • Average time inventory remains in stock
  • Time it takes to procure raw materials
  • Time it takes for finished products to be delivered to customers

All of this information can be shared throughout the company, due to how ERP software centralizes company data and allows for in-depth data processing.

With this information, manufacturing and distribution companies are able to cut costs while continuing to ensure customer satisfaction.

Having trouble managing inventory for your manufacturing and distributing company? 

At Projects Analytics, we can help! We specialize in implementing ERP solutions tailored to your business, using Acumatica backed ERP software


Learn how our ERP software can benefit your company, contact us today!