How does an ERP system handle inventory management?

An ERP system plays a crucial role in inventory management by tracking inventory levels and movements across the supply chain. This functionality allows organizations to have real-time visibility of their stock, which is essential for making informed decisions about purchasing, production, and sales strategies.

By monitoring inventory levels, an ERP system helps businesses maintain optimal stock quantities, preventing both overstock situations and stockouts that can disrupt operations. Additionally, tracking movements across the supply chain ensures that companies can trace the flow of goods from suppliers to customers, improving accountability and efficiency. This comprehensive view supports better forecasting, demand planning, and supply chain optimization, aligning inventory management with overall business objectives.

In contrast, focusing solely on sales tracking would not provide a complete picture of inventory status, limiting the ability to manage stock effectively. Limiting access to inventory data would hinder collaboration and decision-making, as stakeholders need access to relevant information. Automating employee scheduling, while beneficial for workforce management, does not directly relate to inventory management, making it unrelated to the primary functions of an ERP system in this context.