Many organizations rush through ERP implementations and find that their operational pain points remain. This can be disheartening to experience, as you’ve just invested time, money, and energy, and you expected a high ROI. 

Today, we’re outlining the inventory management challenges that poorly-planned software projects fail to address. If you’re still struggling with these challenges after go-live, take it as a sign that you might need project recovery.

In this post, you’ll learn about the challenges that ERP should ideally resolve and how to use project recovery to address these challenges if your initial implementation didn’t do the trick.

7 Common Inventory Management Challenges

Inventory management can be difficult to optimize, even with one of the top 10 ERP systems. Let’s look at some of the challenges that often remain after an ERP implementation: 

1. Effectively Managing the Warehouse

Optimizing warehouse efficiency can be a daunting task. This process involves multiple steps and coordination among different team members.

In addition to receiving and putting away inventory, there’s also picking, packing, and shipping to do. Without the proper controls, it can be challenging to arrange these workflows in a way that’s consistent and effective. 

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2. Mitigating Risks From Supply Chain Disruptions

When supply chains aren’t built to be resilient, it only takes a minor disruption to cause major chaos. Global issues like the COVID-19 pandemic can be outright detrimental. 

While many businesses tend to prioritize efficiency and cost savings over resiliency, the tides have shifted. Now, companies must consider how they can mitigate risks if a supply chain disruption occurs.

This might mean making changes such as:

  • Diversifying suppliers, emphasizing near-shore and local companies 
  • Establishing proven risk management procedures
  • Improving transparency across the supply chain

3. Ensuring Data Accuracy

Companies need to know exactly what inventory they have in stock, how much they have, and when the next shipment is coming.

An annual all-hands-on-deck inventory count isn’t enough anymore. Team members need accurate updates in real-time, so they can make quick, sound decisions. 

4. Weathering Demand and Market Volatility

If there’s anything constant about customer demand, it’s that it’s constantly changing. Warehouses need to be ready to meet these changing needs.

If companies keep too much product on hand, their inventory could become obsolete before its even sold. Conversely, not keeping enough product could render a business unable to fulfill customer orders.

To compensate for these ever-shifting conditions, many companies establish ordering strategies for core items so the right levels are always in stock. Some companies also create inventory plans so everyone knows what to do as demands change. 

5. Maintaining Visibility and Transparency

There are many issues that can hinder visibility and transparency in a supply chain. These include:

  • Siloed work systems
  • Inefficient inventory
  • Legacy software
  • Historical data
  • Outdated inventory and warehouse management practices 

ERP software can address all these challenges, but employees must know how to leverage it. Otherwise, they could still be unable to answer critical inventory questions, such as:

  • How many orders are being processed
  • The number of purchase orders being worked
  • The amount of safety stock on hand

6. Dealing With Inventory Loss

When goods are overstocked and under-sold, it can lead to inventory loss. This can occur in the form of spoilage or damage, or the items could simply become deadstock.

This is a liability to a brand’s reputation, safety, and sanitation. At the same time, understocking can damage a company’s image as well as future revenue.

7. Effectively Managing Warehouse Space

It can be challenging for companies to optimize their warehouse layouts, especially if they have a big facility. Companies must make sure they’re making use of available space in a way that facilitates new stock deliveries and allows for easy movement between rows. 

Not only is an insufficient design difficult to maneuver, but it can also hinder worker safety.

Inventory management software can identify areas of inefficiency and provide suggestions on ways to improve – but only if the warehouse team is equipped to use the software.

How ERP Project Recovery Works

If you’re still experiencing these problems after your ERP implementation, there could be both technology-based and people-based problems at work. 

ERP implementation consultants, like Panorama, can help you identify the root of your issues so you can quickly resolve them. This can put your project back on track and enable you to reap the benefits you expected.

Some of the most common issues we see are:

  • Implementing the wrong ERP software
  • Under-emphasizing organizational change management
  • Not following ERP implementation best practices

Each of these issues can exacerbate inventory management challenges, so it’s important to address them as soon as possible.  

Sometimes, issues can be traced back to both the ERP vendor and the customer, so ERP expert witness services may be necessary.

Solve Your Inventory Management Challenges Today

Inventory management is a constantly-shifting entity that’s highly dependent on customer preferences and buying behaviors. 

If the ERP system you implemented left you with the same inventory management challenges you started with, a project recovery team can identify the root causes and show you how to resolve them so you can avoid ERP failure.

These root causes can be hard to see when you’re so close to the project, so contact our team below for a free ERP consultation.

About the author

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As Director of Panorama’s Expert Witness Practice, Bill oversees all expert witness engagements. In addition, he concurrently provides oversight on a number of ERP selection and implementation projects for manufacturing, distribution, healthcare, and public sector clients.

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