We often get asked, “Does the cloud really matter for ERP?” After all, an on-premises Enterprise Resource Planning (ERP) system can usually do most of the same things as one hosted in the cloud. There’s room for debate on this issue, but in general, legacy ERP and cloud ERP have comparable features. However, in reality, it is usually far easier, faster and cheaper to implement business functionality using a cloud-based ERP.
This is definitely true for inventory management. Cloud-based ERP is well-suited to the inventory management use case because the workload tends to involve connecting multiple sites. At the same time, inventory management often requires integration with multiple systems, such as logistics solutions. The cloud makes this all a lot simpler than is possible with legacy systems.
With these factors in mind, here are five benefits of using cloud-hosted ERP for inventory management:
- Real-time visibility—The essence of inventory management is knowing, with a high degree of confidence, how much of a product you have in stock. It’s also imperative to know how much you have coming in, how long it takes to reorder and so forth. Cloud ERP is good at realizing these requirements. It makes it easier to see inventory statuses at multiple warehouses. Automation is a key to success here, with cloud-based ERP providing relatively simple ways to eliminate manual inputs and maximize efficiency throughout the inventory lifecycle.
- Mobility—Your people are on the move (or at home), away from the office and warehouse. They still need to be able to manage inventory at a distance. Cloud ERP makes this possible with mobile apps and constant cloud connectivity. With such technologies, salespeople can enter orders from the field in real time. Everyone on the team will get a quick heads up that inventory for the selected products will drop. Previously, people might not have known about the order until the salesperson returned to the office and entered it into the ERP system manually. By that time, someone else could have depleted the item and triggered a stockout. Now, with mobility and real time inventory updating, procurement people can be automatically alerted to place reorders.
- Integration with other systems—Inventory management is not a standalone activity. Cloud-based ERP enables relatively easy integration with other relevant systems. These include logistics and freight management, procurement management, accounting and finance, sales order management and so forth. With such connections in place, people across the business can be aware of inventory issues and respond quickly. For example, if procurement wants to place an order, but the vendor says no due to a credit limit, the accounting department can quickly get involved and resolve the issue before it affects customer experience.
- Scalability—A well-run busines should be growing, so inventory management systems should be able to scale as the operation gets bigger. Cloud ERP scales more readily and economically than its on-premises counterparts. For example, if your company adds new locations, each with its own warehouse, a cloud ERP provides a fast, simple way to implement inventory management in the new sites.
- Flexibility—Most businesses change their processes and procedures on a regular basis. For this reason, inventory management systems should be flexible enough to adapt to new rules and workflows. Again, cloud-based ERP, built using cloud-native software, is generally easier to adapt to new ways of doing things than on-premises variants. This is partly due to the use of standards-based APIs to connect system components. They’re easier to reconfigure, so the resulting system is more flexible.
We have worked with many companies on the implementation of cloud-based ERP for inventory management. If you want to learn how this technology can benefit your business, contact us for a product demo and free consultation.