Advantages of a Strong Material Management Module in an ERP Software?
To define Materials Management, in a nutshell, it is that function of a business which is primarily concerned with planning, organizing and controlling the flow of materials from their initial purchase to the service point. It includes Materials Planning, Purchasing, Inventory Planning, Storage, Inventory Control, Transportation and Materials Handling.
Irrespective of the nature of an organization, it requires proper and efficient materials management so that the enterprise can evade scenarios such as shortage of materials or overstocking leading to blocking of working capital. Also, components and sub-assemblies that have specific uses demand more care during procurement, storage handling, and distribution. An ERP for Material Management is the quintessential solution for an enterprise to handle all such complexities with ease.
Here are the advantages of using an ERP for Material Management
Bin Management: Bin Management is a crucial function of an ERP for Material Management. The inventory can be easily stored in preferred bins within the rack system of the warehouse so that during the order fulfillment process the items can be easily traced and picked. Whether the goods are being received, issued, or transferred, modern ERP solutions with powerful Material Management capabilities like ebizframe, can enable automated as well as manual allocation of goods to and from the bin locations. Based on the minimum inventory levels that the company sets, the bin replenishment can also be automated, due to which stock-outs can be kept at bay.
Also, a comprehensive ERP Solution like ebizframe provides multi-layered classification and grouping/sub-grouping to multiple levels, which lends flexibility to the grouping information and traceability of an item.
Inventory Valuation: Many small to mid-size businesses often take Inventory Valuation lightly. Accurate valuation of Inventory is crucial for initiating prudent strategic decisions. It can be easily done by an ERP Software with a strong Inventory Management functionality. Inventory Valuation includes costs that are incurred to get the item ready for sale, like material expenses, direct labor, freight, handling, import duties, etc. The valuation methods could be FIFO, LIFO and Weighted Average.
Multi-Location Inventory: As a business expands into multiple warehouses, stores and/or offices, accurate monitoring of inventory levels in each of its location becomes a prerequisite and gives them the strategic advantage over its competitors. A powerful Material Management module in an ERP can let users track inventory in multiple locations. It can let users find out locations having a specific part or product or product categories, analyze Inventory Valuation and figure out seasonal and location-based trends in demand.
Lot/Serial No. Traceability: An ERP for Materials Management can help users in effectively managing the allotment of lots or Serial Numbers for item parts as well as Finished Goods, from receipt to shipment. From the time an item is received from the vendor until the time it is shipped to the customer, an ERP for Materials Management maintains the complete record, and users can instantly access information pertaining to a specific lot/Serial Number. Users can view the entire history of the transactions as well. This greatly helps in traceability in general and in cases of Sales Returns/Field Issues and identify the problem to its source.