What To Look For In the Best Materials Management Software
Materials management is the process of organizing and controlling the flow of materials through a production system. It encompasses the planning, sourcing, procurement, inventory management, and distribution of materials.
To do this effectively, you need the right software. So what should you look out for in the best materials management software? Continue reading to find out.
Why use materials management software?
Companies use materials management software to plan, control, and monitor all materials needed to produce any product or service. It allows you to manage the production process with end-to-end inventory tracking.
Maximize cost savings
For a typical logistics operation, inventory costs can range from 20 to 30% of the total budget.
So for every $1 million in products you store, your company incurs approximately $200,000 to $300,000 in costs to store them in a warehouse and move them in and out of your inventory.
The benefits of using materials management software are vast. The most important benefit is increased profitability by decreasing costs thanks to improved inventory insight. These cost savings can come in several different forms.
For example, you might cut down your inventory stock-outs or excess inventory to reduce order costs and save warehouse space. Some software packages even offer the option of just-in-time manufacturing (JITM), decreasing inventory to zero by delaying delivery until needed.
Reduce inventory stock-outs or excess inventory
Another cost-saving benefit of using materials management software is the reduction of unplanned inventory, such as stock-outs and excess inventory. This is also known as economic order quantity (EOQ).
Using smaller batches leads to greater production efficiency and lower costs per unit. Since you will have an accurate picture of the material needs, you can avoid ordering too many or few parts.
34 percent of businesses experience delayed shipping because they sell products that are not actually in stock. By minimizing stock-outs and overstocks, retailers could lower their overall inventory costs by a minimum of 10 percent.
Achieve real-time data visibility across your supply chain
Material management software gives you a real-time, 360-degree view of your inventory and assets. This allows you to monitor production and shipments in real-time to meet customer demands.
By integrating material management software into your supply chain operations, you can track sales or returns on investment, compare performance across divisions, and capture the holistic need of your company.
Enable better supply planning
Preemptively identifying potential risks is a crucial advantage that any business can attain from employing materials management software.
What makes this software so helpful in this regard? Like other software tools, it allows you to plan for future demand. If you know the current situation of your inventory, you can use intelligent and adaptable algorithms to predict how best to optimize operations.
What to look for in the best materials management software
Today, there are a lot of materials management software solutions out there to choose from. However, each offering varies in terms of capabilities and price.
When searching for the best materials management software, it can be helpful to consider the areas of your organization to which you have the greatest possibility for improvement.
What criteria should you consider?
While the introduction of AI-driven material management software presents several benefits, incorporating the correct functionalities for your business can be a tricky task. The following list of potential advantages should be taken into account:
- Improved inventory insight and management
- AI-powered data insights and demand forecasting
- Barcode and scanning functionality
- Easy integration and configuration with existing systems
- Unlimited SKUs
- The ability to integrate pre-existing data and records
Improved inventory insight and management
One of the critical benefits of materials management software is improved inventory insight and management. The software should ideally give you a clear view of your inventory levels and where updates are required. It should also allow you to identify stock-outs and excess inventory overstocks.
AI-powered data insights and demand forecasting
To stay ahead of the competition, it’s important to have access to real-time data forecasts. Materials management software with AI-powered data insights can help you forecast demand and make better decisions about production and inventory.
Barcode and scanning functionality
Any material management software should ideally allow you to work efficiently and quickly. This is why it can help to look for barcode scanning and/or barcode printing capabilities.
The ability to input information via barcodes means that you can use a single method to update all your records, which speeds up the entire process. Plus, automation removes the possible human error associated with barcode tracking.
It has been concluded following in-depth research of retail supply chains that a human will make at least one data entry error every 250 keystrokes – while computers have a rate of one error every 36 trillion characters scanned.
Easy integration and configuration with existing systems
Your organization likely already has a system for keeping records, designing workflows, and managing projects. The right materials management software will integrate seamlessly with these systems to make it easy to add new data or update old information.
Good materials management software will provide you with unlimited numbers of SKUs, and is most effective when utilized for an unlimited number of items. This ensures that your business can manage the entire life cycle of a product supplied by your organization.
The ability to integrate pre-existing data and records
Proper materials management software will also allow you to import existing data into its system while still keeping track of any changes you make. This decreases error likelihood while maintaining a steady workflow.
The materials management software market is growing quickly due to the wide range of businesses that can be optimized with its integration. Companies that implement the software effectively see significant gains in efficiency and productivity, resulting in more satisfied customers and increased sales.
Factors to consider when choosing a materials management software solution
When choosing a materials management software solution, it’s important to consider the most important features of your business that will benefit. The software should usually provide improved inventory forecasting and AI-powered data insights to supplement inventory management.
Additionally, it should be easy to integrate with existing systems and have unlimited SKUs. You may also want to consider the following:
Features, capabilities, and customization
One of the first things you should consider when choosing a materials management software solution is its features, capabilities, and customization options.
The software interface should allow you to customize how information is displayed, communicated, and integrated into your system so that it can work with your existing operations.
Another important consideration is the cost of the materials management software. You should familiarize yourself with included modules, how much each one costs, employee training, and the total price.
Certain software is offered through a subscription-based model, while you can purchase others outright. You might also be able to start with a free trial, which is a great way to figure out if a given solution is the right for you.
Integrations with other systems or applications
Materials management software should easily integrate with pre-existing systems you have in place or other business applications that you utilize.
You might, for example, have other inventory management software that you want to use alongside the materials management software. Some of it might integrate with other applications, while others might use APIs instead.
Finally, it’s important to consider the customer support options available. When choosing a materials management software solution, determine what types of support it offers for your company and supply chain managers.
Verusen enables digital transformation across the supply chain
Verusen is a dynamic and user-friendly materials management software solution that provides AI-powered insights to help users make better business decisions. It’s designed for organizations of any size, in any industry, and offers unlimited SKUs and integration with other systems.
Our software can help businesses balance operational and supplier risk to fulfill client orders on time and at the stated price by assisting them in better managing these risks.
Without the need for time-consuming data cleanses, our sophisticated AI and machine learning technologies combine indirect inventory data automatically. Consequently, your staff may focus more on more important activities like assessing vendor performance and improving working capital.
To learn more about how Verusen can help you streamline your business, request a demo of our platform.
[…] simply not equipped with the features needed to make your supply chain resilient. Investing in the right material management software can help you uncover opportunities that otherwise couldn’t be done by using traditional […]