Many large companies have ERP systems that govern much of what they do. They facilitate purchasing and procurement, finance, planning, and other functions. One of the functions that many of them do is material and inventory control. But is this the best practice? Is there a better way to manage this?

ERP systems tend to be very transactional – after all, at heart most of them are accounting systems. And on the finance side they do those functions very well – keep track of the transaction register, do finance reporting, cut purchase orders, pay suppliers and so forth. When it comes to inventory, it is much more of the same philosophy: do a material receipt, make sure the supplier gets paid, increment the inventory balance, and order more when needed. What could be better?

What gets lost in the ERP-centric model is that there is much more business process logic that can be taken advantage of when material is received into a facility. Think about this: when material comes into a facility from a supplier, this represents, in many cases, the first opportunity to take control of that material flow. How can we take advantage of that?

When any of the material enters a facility for the first time, there are many paths it can take. Does it need an inspection? Is the package damaged in any way? Is there a need for First Article Inspection? If so, then the material can be sent to a quality process secondary to the original receipt process, then dispositioned accordingly.

But what if the material is fine, which is the case most of the time (at least we hope so)? Does the material need to be cross-docked? Is the material needed at the line immediately because of a shortage? Does the material need to be delivered to a forward-pick area? Again, these are some of the secondary functions that can be done post-receipt.

The benefits do not end at material receipt. If your warehouse/inventory system is connected to your shop floor execution and operation system, you can gain additional benefits. Faster, transparent line replenishment, just-in-time picking and synchronized material movements are just some of the advantages in having a connected warehouse and execution system.

If you’re a current DELMIA Apriso user and do not have Warehouse roles, I encourage you to reach out to your DELMIA Sales Representative to start a dialogue. It’s never too late to make improvements on your shop floor!

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