ERP Inventory Management: What are the benefits?

inventory management

Written By | ERPFocus

ERP Inventory Mangement: 4 Benefits for Distributors

Distributors are classic middlemen. Historically they have taken large shipments from manufacturers and held inventory until they could be resold to retailers in smaller quantities. That role continues and today’s distributors also deliver just in time to their customers, manage the customer’s inventories, plan the manufacturer’s delivery schedule, and many other service roles all on a razor-thin margin. ERP systems help manage inventory up and down the supply chain and enable profitability and provide the competitive edge needed to survive. Without ERP inventory management, they might be just another distributor.

Sales Performance

A sale happens when the distributor has exactly what a customer wants in their inventory at just the right time. A shortage of even one line can mean an entire sale is lost. At the same time, an overage can become spoiled or surplus and quickly have no value. ERP inventory management can track data on past sales and inventory levels which can be combined with sales forecasts from customers to help optimize the right inventory level.

Real-Time Data

ERP inventory modules can help enable the controls that lead to an accurate knowledge of inventory for every SKU. When a customer asks for availability, the ERP provides in real-time exactly what is on hand and when the next incoming delivery is expected and nets that quantity against existing customer orders. Delivering on promises leads to satisfied customers.

Compliance Reporting

Beyond the basics, distributors of food, drugs, and chemicals are examples of businesses that need to satisfy regulatory requirements and ERP inventory management can offer these tools as well. Lot numbers combined with SKUs link every incoming receipt to the outgoing delivery that received that lot. Storage conditions and formulations are tracked and recorded for any necessary reporting and to ensure the quality of the product remains at high levels.

External Inventory

In addition to their own inventory, distributors store and manage inventory owned by suppliers on a consignment basis and other inventory owned by customers. ERP inventory management can help control what is owned by whom and any reporting required by the different owners. At the same time, ERP helps assemble specific orders combining consigned inventory with the distributor’s inventory with the right markup on each kind of inventory.

Like any business, distributors need to stay ahead of their competition. ERP business intelligence and analytics along with advanced reporting provides the edge needed for modern distributors. The old-timer could keep the whole business in his head. Today business moves too fast and ERP inventory management is necessary for success.

If you are considering upgrading to an ERP system that helps monitor and track your inventory, speak to allonline365 to get some advice. Contact us on or  +27 (21) 205 3650.

Excel for inventory management is risky

inventory management

Almost every small business starting out relies on Microsoft Excel to manage separate business functions. It’s an excellent business tool that is free that everyone already knows how to use, so why not use it for inventory management?

When it comes to inventory management, spreadsheets can be used for everything from manually updating when shipments arrive and are shipped out, to determining what items are in stock, when to replenish, and how much to order. Excel has plenty of valuable features capable of handling a start-up business’ inventory, as long as you put the time and energy into developing an effective governance strategy and template.

While it’s not uncommon to start with Excel for inventory management, it is important to remember that these templates are designed for a small number of products and limited variants. Excel works best when used appropriately and can negatively impact a business if relied on too much in situations where other tools would work better.

Using Excel as a low-cost inventory management solution

Inventory management templates are effective when setting up your inventory. If you have ever done a desperate Google search looking for a free inventory spreadsheet template, you know that there are a ton of options from which to choose. A basic template should include key columns like product numbers, product names, item descriptions, item price, cost or value, item stock, quantity to reorder, quantity sold, time to reorder, etc. Ultimately, you create your template based on your inventory management needs.

Unfortunately, the more columns you have, the more difficult it is to keep up with everything. And this brings us to some of the major risks (and stress) that come with keeping track of your supply and demand with Excel.

Here are five risks of using Excel for inventory management:

1. Making Mistakes

It is easy to make mistakes in Excel, but hard to find errors on sheets of numbers and data. To avoid them, you will need to have strict management, proper organization, and regular auditing practices in place for your inventory management spreadsheets. This can be a time-consuming and mind-numbing process, but it’s really only the way to stay on top of human error.

2. Out-of-Date Information

Excel is not a real-time inventory management solution, so you will never be able to see the real inventory value at that moment. When using Excel for inventory management, it’s important to make sure that it is updated as often as possible to avoid issues like overselling a product that you cannot then backorder.

3. Inaccurate Reporting 

One small mistake in a formula or miscalculation can have a huge impact on the rest of your numbers across multiple worksheets. You can use a few simple Excel formulas to calculate information automatically for total sales and total profit, but when it comes time to make recommendations based on that data, you need to be constantly checking and rechecking your calculations for accuracy.

4. Data Consolidation

One of the biggest issues people have with Excel is not being able to analyze historical data. It might not be a big deal in your first year of business, but as you grow and expand, the data you collect from multiple sources is gold. With it, you can track your sales based on the period for better inventory optimization in the future, etc. It’s certainly possible to manually consolidate your data, but it’s time-consuming and laborious – and there are easier ways.

5. Data Loss

Even though Microsoft has made huge improvements to Excel in the cloud, users are still infamous for saving spreadsheets to their desktop and forgetting to save it to the cloud or OneDrive. While this can be avoided with a strict set of rules and backups in place, it still causes a lot of complication and uncertainty to those involved in planning management.

Reap the benefits of a dedicated inventory management solution

The bottom line is that Excel does not work with medium to large inventory volumes.  Hundreds of columns are too complex, time-consuming, and difficult to keep up-to-date manually. If you have a growing inventory of products or want to handle multiple location tracking in real-time, a dedicated ERP system with inventory management capabilities will be necessary to save time and money in the long run.

We know that it’s hard to make informed decisions and grow your business without the right technology in place. Jet Global specializes in providing reporting, analytics, and budgeting solutions for Dynamics 365 Business Central ERP customers. With Dynamics 3365 Business Central, you get a dedicated inventory management system that grows with you, managing your sales, inventory management, accounting, and operational processes in one platform. With Jet Global, you get fast flexible dashboards and financial reports in Excel online. No more manual data consolidation. No more out-of-date information. No more risk.

Using Excel will allow you to cut costs at first, but eventually will result in too many inefficiencies and chaos. A better ERP and reporting solution will eliminate all of the risks included above and give you the tools you need to grow and be successful. For more information on Jet Global and the benefits of their solutions and how they integrate with Dynamics 365 Business Central, contact us on or +27 (21) 205 3650. 

Resource Credit | Jet Global 

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