How to Add-On Inventory Management Capabilities to Your ERP
- 5 Benefits of Add-On Inventory Management Solutions
The market for add-on inventory management and supply chain planning software is quite large. With technology advancements in the cloud and with the emergence of Software-as-a-Service (SaaS) inventory management, it is easier and almost risk free to integrate add-on software to compliment your existing ERP system, regardless of how old your current system might be.
Add-on systems do not need to be procedurally overwhelming or suffocating to your current business processes. ERP systems were developed for transaction processing, data collection and data reporting. Inventory Planning and Optimization solutions do not process transactions. Rather, they use the data from existing ERP or POS systems to establish the optimal mix between inventory investment and service levels for each inventory item at each location.
Below are the 10 procedural steps of an effective inventory optimization solution:
The diagram above illustrates the downstream value of connecting your ERP data to a cloud based inventory optimization solution. Effective inventory managers will be able to manage demand analysis, forecasts, safety stock and inventory alerts all from one platform. Unfortunately, most ERP systems have limitations that cannot be fixed regardless of how much money is thrown at the system. Even replacing or upgrading systems won’t necessarily fix the problem. Cloud based inventory add-ons for ERP’s are a value added and affordable solution to address all the gaps in your current inventory management processes.
Benefits of Cloud Add-On Software for ERP Systems
The most common way to manage data transfers from your ERP to an add-on inventory solution is using Excel file uploads. Raw data is exported out of the ERP and imported into an inventory optimization solution, which then optimizes all inventory related parameters or recommend orders that should be placed.
API integrations from ERP’s is also a common and easy way to ensure data is married between the two systems. For companies seeking maximum productivity improvements, integration provides the end-to-end automation that frees planner and purchasers time to pursue more strategic activities.
5 Benefits of Add-On Inventory Management Solutions
1. Affordability – Add-on inventory management software will almost always be less expensive than replacing your entire ERP system. With cloud computing, you can pay for only what you use and ultimately reduce operational costs and capital expenditures on hardware, software licenses and implementation services.
2. Rapid Implementation – Implementing a cloud add-on software can be done in a fraction of the time it would take to replace a whole system, thus allowing you access to benefit of the software much sooner.
3. Efficiency Improvements – Cloud inventory management gives the benefit of shared hardware and automated processes. You and your employees can access your data on the go and from anywhere by securely logging into your account via a web browser.
4. Scalable and Flexible Systems – You can scale up or down your usage to meet the ever changing demands of your business to ensure you get the most value from the application.
5. Easy User Adoption – No need to train your entire staff on a whole new ERP system, rather focus the training on the select few of system leaders that are working with inventory planning and purchasing.
Learn more on extending your ERP to the cloud! Get a deeper analysis in your free copy of the white paper “The Guide to Extending your ERP System”