Why Is the Inventory in My ERP System Always Wrong?

This white paper, from KnarrTek’s Peter and Eric Green, is intended for CFOs, materials managers and other senior managers at manufacturing plants, as well as in industrial distribution warehouses that perform secondary operations such as repacking, kitting, assembly and relabeling of products. A critical role of enterprise resource planning (ERP) systems for such managers is to track the quantity and value of inventory.

This is required for accurate reporting on an organization’s balance sheet but is also critical because it often forms the collateral for bank loans, and any changes in inventory value need to tie out with the profit and loss statement. An accurate inventory count is essential when it forms the basis of ordering in response to pending customer orders, as well as deciding what to make and when. The authors examine case studies for which inaccurate inventory impacted operations, describe common problems and consider a possible solution. (8 pages)

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