Manufacturing Inventory Management Software: Keeping Your Inventory Levels “Just Right”
It doesn’t matter what business you’re in—if you have products for sale, you need to monitor your inventory levels carefully.
It’s a classic Goldilocks scenario:
- If you carry too much inventory, those supposedly transitory items start looking more like fixed assets in your ledgers. Excess inventory ties up your cash resources and takes up space. Imagine operating an extra warehouse just because your inventory levels are too high!
- If you carry too little inventory, you can’t respond adequately to customer demand. The most obvious issue is that you might end up with finished products out of stock. But if you don’t have key raw materials on hand, you might see production lead times skyrocket, too. The worst part? Customers won’t wait around—they’ll buy from your competition.
- The goal is to get inventory levels just right—enough to keep production running, control costs, avoid stockouts, and, above all, keep your customers happy.
For small and mid-sized manufacturing businesses, inventory management is more complicated than it is for retail businesses. For example:
- Manufacturing inventory includes raw materials, components, sub-assemblies, and ingredients, not just finished products. Low or no stock of a key component translates into a production bottleneck or shutdown with cascading effects on other areas of the business.
- Food, beverage, chemical, and cosmetic manufacturers have to track more than inventory levels—if ingredients pass their expiration dates, they’re a total loss.
- Food and Drug Administration (FDA) requirements for supply chain, batch, or lot traceability add another layer of complexity to inventory control for food, beverage, and cosmetic manufacturers.
However, the problem isn’t a matter of knowing what you need to do; it’s a matter of knowing how to do it.
Stoneridge Software is a recognized provider of enterprise resource planning (ERP) solutions for small and mid-sized manufacturers, namely Microsoft Dynamics 365 Business Central. In this blog, we’ll see how the inventory management software included in Business Central can help your small or mid-sized manufacturing operation.
What is inventory management software? It’s an essential tool for reaching and maintaining the proverbial sweet spot for inventory levels; ideally, it’s an integrated part of your larger ERP system.
The Advantages of Using an ERP for the Manufacturing Industry
A business of your size undoubtedly has systems for accounting, sales, marketing, human resources, production, warehousing, supply chain management—and, hopefully, inventory. You simply can’t grow a manufacturing operation without some way to manage these indispensable areas of your business.
But you may be getting by on systems that are:
- Outdated—put in place when the business was much smaller
- Hard to maintain—for example, on-premises solutions with never-ending maintenance needs
- Disconnected—for example, without any shared data between accounting and your supply chain
Inventory management software works best when it’s one piece of the puzzle, one operational system in an ERP solution that integrates every area of your small or mid-sized business (SMB).
Within an ERP, inventory management software covers basic functions, like tracking how much of Product A is in your warehouse. But because your systems are interconnected, the inventory system is automatically updated when a customer rep writes a new sales order, and procurement is instantly alerted that you need more of Component B so you can manufacture more of Product A.
Microsoft Dynamics 365 is a cloud-based, software-as-a-service family of applications for ERP and customer relationship management (CRM) solutions for businesses of all sizes. Dynamics 365 Business Central is the ideal ERP software for SMB manufacturers.
Inventory Management Features in Microsoft Dynamics Business Central
Dynamics 365 Business Central’s inventory management features allow you to track and control inventory items from the moment they’re received until they’re shipped out the door.
The following list presents some of Business Central’s inventory management capabilities:
- Begin tracing raw materials in your supply chain even before they reach you with technologies like barcoding, blockchain, and the Internet of things (IoT).
- Quality control received inventory—block substandard items from being used in production.
- Track lot, batch, and serial numbers.
- Food and beverage manufacturers can apply first expiry, first out (FEFO) tracking to ensure that no ingredients are spoiled or wasted.
- Track where each inventory item is located.
- Set minimum stock levels to prevent out-of-stock situations.
- Provide your sales staff with accurate information on products in stock or lead times on orders.
- Forecast demand to stay on top of procurement.
Follow the Stoneridge manufacturing blog for more tips on inventory management with Dynamics 365 Business Central, such as how to simplify physical inventory or apply best practices in inventory turnover.
Stoneridge Software: Your Inventory Management Partner
If you want to grow your SMB manufacturing operation, team up with Stoneridge to implement a Dynamics 365 Business Central ERP. Stoneridge has a history of successful deployments for discrete, batch, and process manufacturers across multiple industry verticals.
We’re a certified Microsoft Solutions Partner for Business Applications, a Microsoft Inner Circle Partner and Business Central Partner of the Year winner. We don’t view our collaboration with you as something that ends when your ERP system goes live—we provide training and continuing support to ensure you get a high return on your investment.
Contact us today to learn more about how a Dynamics 365 Business Central ERP solution can keep your inventory management just right.