3 Ways ERP Can Eliminate Inventory Discrepancies

In the world of inventory, discrepancies can be defined simply. You believe the quantity available in a bin is one number and you learn that it is not. Whether you have more than you thought or less it is still a discrepancy. If the total quantity is correct but that quantity is in a different location, you have another discrepancies. How do we eliminate these discrepancies? We probably cannot eliminate them completely, but we can certainly reduce the numbers and any cost resulting from the discrepancy by implementing ERP inventory management.

1. ERP Eliminates Negative Inventory Values

Most ERP inventory management modules have a switch permitting negatives or prohibiting them. Audit your system today and if a transaction leads your on hand quantity to the minus realm, there is a discrepancy to be identified and fixed. Fix it and move on. It will cost a few minutes while that transaction is on hold, but simply allowing a negative value for inventory creates a lax environment. People will say they will investigate and fix the problem later. You know that is only wishful thinking.

2. ERP Analytical Tools Monitor and Audit Transactions

All inventory discrepancies are the result of a transaction error. Whether the part was moved without a transaction or the transaction itself had an error such as the wrong part number or the wrong quantity. Your ERP inventory module allows your employees to spot problems quickly and undertake repairs before the discrepancy causes a problem. Utilize ERP reporting as well as employee and manager dashboards to allow your staff to monitor these discrepancies in real-time.

Your ERP inventory module will show which parts were needed yesterday for jobs or sales orders. Are there transactions that match the requirements? When an order ships with no decrease in inventory, there is a discrepancy. When a job operation is complete without a part needed at that operation, there is a discrepancy.

Cycle counting is a form of audit too. If there should be 250 parts and you find 260, there is a discrepancy. Now, identify the errant transaction and put practices into place using Pareto frequencies to resolve the worst problems.

3. ERP Works with Bar-Coded Transactions

You cannot accidentally enter the wrong part number or order number when the value is scanned. Even when the best and most accurate individual at your company inadvertently transposes a part number, you have a discrepancy. A medium volume business can easily serve thousand of transactions a day. Bar coding will help eliminate errors and making your ERP inventory module a better decision making tool.

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Tom Miller

About the author…

Tom completed implementations of Epicor, SAP, QAD, and Micro MRP. He works as a logistics and supply chain manager and he always looks for processes to improve. He lives near San Francisco Bay in California and can be found on the water in his kayak or on the road riding his motorcycle. Contact Tom at customerteam@erpfocus.com.

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Tom Miller