2 features to consider when selecting distribution ERP for inventory management
Distribution is a fast-moving business. The margins are often low and a product that isn’t available when an order comes in can lead to an order that never transitions to a completed sale. Because of this, there is often a myriad of pressures exerted on distribution inventory processes and the ERP system that you choose to manage them.
Distribution ERP provides the tools you need to keep inventory accurate and constantly in motion. Inventory data that is 100% accurate, or very nearly at that level, is a must. That kind of accuracy comes from transactions that are easy to record as they occur and difficult to record incorrectly. This data accuracy is also a result of constant data auditing and cleansing, but it also relies on a system which has the features to support your inventory management.
1. Support for wireless scanners
Barcoded transaction technology has been proven over time and is relatively inexpensive. In the past, a warehouse worker would move a product to a put-away stock location and then fill out a paper record for this transaction. Later, another individual would key that transaction into the ERP system. During that time delay, the actual level of inventory is only a best guess.
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Today, ERP users can scan the product SKU, the purchase order number, and the stock location ID. With a modern wireless scanner, the transaction is recorded within seconds of the physical movement and accuracy is nearly certain; a barcode reader never transposes numbers.
2. Automated cycle counting
Your distribution ERP system should also select a statistically valid sample of inventory products to check every day. You will work with your ERP to set the sample size at a level that is small enough to ensure system load is not excessive and large enough to be meaningful. With this in place, a worker can locate and count the sample in as little as fifteen minutes a day.
Location of the sample is quick because the inventory is already known to be somewhat accurate. The count is recorded using a wireless device so the inventory count is immediately updated. The most important value is the reason for the difference between expected inventory and recorded inventory. Over time you will find that 80% of variances are caused by 20% of possible reasons. Correcting a few processes will quickly resolve a large number of variances.
Accurate distribution inventory management allows your sales department to quickly decide if they should take a customer order and gives them the ability to make a commitment with confidence that the order can be delivered. Accurate inventory counts also allow confident reporting of inventory values and cost of sales on financial statements.
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