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What Is Material Management in ERP? How to Streamline Procurement

Perhaps the quickest lesson learned by owners of manufacturing businesses is how fast material management can get out of hand. With orders coming in and products shipping out daily, it’s been a manufacturer’s lifelong work to find some sort of balance between inventory and materials.

Fortunately, material management modules in ERP systems remove the guesswork. In this article, we’ll explain how ERP and material management modules integrate to reduce inventory, automate procurement, and help your team make smarter decisions.


What Is ERP in Material Management?

ERP stands for enterprise resource planning (ERP), a type of holistic software that connects all departments in a business.

Within an ERP system are any number of modules that are integrated to streamline business processes. In the era of Industry 4.0, manufacturers often utilize a Material and Inventory Management module.

Material management modules integrate with your ERP system to keep track of inventory, analyze suppliers, track the supply chain, and help find the best prices on materials.


What Does a Material Management Module in ERP Do?

Material and inventory management modules have a variety of helpful features that reduce human error and speed up the sales cycle. They centralize all the basic material management tasks, like procurement and inventory management, and offer advanced data collection and analysis.

Here are the most useful features of material management modules in ERP.


Enhanced Procurement Management

Procurement management is the process of sourcing, purchasing, and ordering materials for your manufacturing team. A material management module can streamline these tasks. They store historical data from suppliers to help your team forge the best relationships, automate purchase orders to ensure reliable inventory reduction, and track deliveries in real time.


Lean Inventory Management

In addition to materials management, these modules also help manage inventory. With the help of IIoT devices, materials, and inventory management modules monitor and control inventory levels, automatically order new materials when stock gets low, and optimize warehouse organization.


Financial and Cost Management

Materials management modules track material cost trends across time, including the material you’ve purchased historically as well as the prices of materials on the market. These costs include purchase costs, storage costs, handling costs, and more.

This data helps with cost forecasting, budgeting, and financial planning as your business grows.


Advanced Demand Forecasting

A vital role of ERP systems across modules is their ability to accurately forecast demand. Your materials module integrates with other modules in your ERP system to capture sales and production data and forecast future material needs. This helps your procurement department make wiser ordering decisions.


Integration with Other Modules

As mentioned above, ERP systems are holistic and are designed to help keep various departments informed and communicating with the same data. Material Management modules can integrate with other modules, like sales and operations planning, financial planning, production control, and warehouse management.


Advanced Quality Control

Material management in ERP software includes tools that ensure the materials received meet your business’s quality standards and are suitable for production and sale.


Reporting and Analysis

ERP systems offer robust reporting and analysis tools that provide insights into material usage, cost trends, supplier performance, and other key metrics.


Learn How Material Management in ERP Can Revolutionize Your Business

Material management in ERP systems is about managing the lifecycle of materials and inventory, from procurement to consumption, in a cost-effective and efficient way. Learn how it can help your specific situation by contacting our experts at Godlan today.


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