Inventory management is one of the biggest pain points for engineering manufacturing companies. Whether it is raw material shortages, excess stock, or inaccurate inventory data, poor inventory control directly affects production planning, delivery timelines, and profitability.
Many engineering manufacturers still rely on Excel sheets or manual registers to manage inventory. This approach works only at a very small scale. As operations grow, the lack of a structured system creates chaos. This is where ERP software for engineering manufacturing becomes essential.
Common Inventory Challenges Faced by Engineering Manufacturers
Engineering companies typically face the following inventory-related issues:
- Frequent raw material shortages during production
- Excess inventory blocking working capital
- No clear visibility of WIP (Work-in-Progress)
- Inaccurate stock data between stores and production
- Difficulty in tracking material issued for job work
- Manual reconciliation and high dependency on individuals
These challenges result in production delays, increased costs, and customer dissatisfaction.
Why Inventory Management is Complex in Engineering Manufacturing
Unlike trading businesses, engineering manufacturing inventory includes:
- Raw materials (plates, rods, components, consumables)
- Semi-finished goods (WIP across operations)
- Finished goods ready for dispatch
- Material sent for job work or subcontracting
Managing all this without a system leads to errors and losses.
How ERP Solves Inventory Challenges in Engineering Manufacturing
1. Real-Time Inventory Visibility
ERP provides real-time stock visibility across:
- Raw material
- WIP
- Finished goods
This helps engineering companies know exactly what material is available, in process, or pending.
2. BOM-Based Material Consumption Tracking
ERP links inventory with Bill of Materials (BOM), ensuring:
- Accurate material issue as per job
- Standard vs actual consumption tracking
- Reduction in material wastage
This is critical for engineering manufacturers working on job-based or make-to-order production.
3. WIP Tracking Across Production Stages
With ERP, WIP is tracked at each production stage:
- Operation-wise material movement
- Status of semi-finished goods
- Pending processes
This gives management complete visibility into shop-floor progress.
4. Job Work & Outsourcing Inventory Control
ERP helps manage material sent outside for job work by:
- Generating job work challans
- Tracking issued vs received material
- Maintaining proper reconciliation
This prevents material loss and ensures compliance.
5. Minimum Stock & Reorder Level Alerts
ERP automatically monitors stock levels and:
- Triggers alerts when material reaches minimum level
- Helps plan purchases proactively
- Avoids emergency procurement
This ensures uninterrupted production.
6. Inventory Integration with Production & Purchase
ERP connects inventory with:
- Production planning
- Purchase planning
- Sales orders
If material is insufficient, ERP automatically suggests purchase requirements, improving coordination between departments.
7. Accurate Inventory Valuation & Reporting
ERP provides accurate reports such as:
- Stock summary
- Inventory aging
- Job-wise material consumption
- Inventory valuation
These reports help engineering manufacturers make better financial and operational decisions.
Why Generic ERP Fails in Engineering Inventory Management
Generic ERP systems usually:
- Treat inventory as simple stock
- Do not support WIP tracking
- Lack BOM-based consumption
- Cannot manage job work material properly
As a result, inventory data remains unreliable even after ERP implementation.
How SolutionOne ERP Simplifies Inventory for Engineering Companies
SolutionOne ERP is built specifically for engineering and manufacturing businesses. It understands real-world inventory challenges on the shop floor.
Key Inventory Benefits of SolutionOne ERP:
- Real-time raw material, WIP & FG tracking
- BOM-integrated material issue
- Job work material control
- Inventory alerts and planning
- Seamless integration with production & purchase
- Easy adoption by stores and production teams
SolutionOne ERP ensures inventory remains accurate, controlled, and audit-ready.
Who Should Implement ERP for Inventory Control?
ERP-based inventory management is ideal for:
- Engineering MSMEs
- Job-work-based manufacturers
- Make-to-order engineering companies
- Businesses facing frequent stock mismatches
Early ERP adoption helps avoid long-term operational losses.
Conclusion: Inventory Control is the Foundation of Engineering Manufacturing
In engineering manufacturing, inventory is not just stock—it is money, production continuity, and customer commitment. Managing it manually leads to inefficiencies and losses.
By implementing a manufacturing-focused ERP like SolutionOne ERP, engineering companies gain full control over inventory, improve production flow, and enhance profitability.
