What is Inventory Management?
The process of tracking, managing, and optimizing inventory levels across locations to meet demand while minimizing costs.
Definition
Inventory Management in ERP covers tracking stock levels across all locations (warehouses, stores, in-transit), managing reorder points and safety stock, lot and serial number tracking, inventory valuation (FIFO, LIFO, weighted average), cycle counting, and multi-location transfers. Advanced inventory management includes demand forecasting, ABC classification, and inventory optimization to balance service levels against carrying costs.
How Inventory Management Works in ERP
ERP inventory modules provide real-time visibility into stock levels across all locations. When items are received, manufactured, sold, or transferred, inventory quantities update automatically. The system calculates when to reorder based on demand patterns, lead times, and safety stock settings, generating purchase requisitions or production orders as needed.
ERP Vendors with Strong Inventory Management
Frequently Asked Questions
How does ERP help with inventory management?
ERP provides real-time inventory visibility across all locations, automates reorder points, enables lot/serial tracking, supports multiple valuation methods, and integrates inventory with sales, purchasing, and manufacturing for demand-driven planning.