A Guide to Picking an Inventory Management Solution that Scales with Your Manufacturing Business and Prepares You for the New Post-COVID-19 Reality

The right inventory management solution will give manufacturers the confidence to go about their business, knowing they have a solid foundation that will allow them to quickly adapt regardless of market conditions, challenges, or changing business models. 

During the startup phase, manufacturers should focus on establishing their businesses, building market share, and creating a sustainable business model. Setting up shops, establishing physical or virtual locations, staffing up, developing product lines, and finding customers are all top of mind during this stage, and rightfully so. 

But once those “early-stage” challenges are behind them, manufacturers have to think about scaling up, strategically expanding their markets, increasing sales and building their customer bases while maintaining and increasing profitability. The backbone of most successful, modern businesses is their ERP solution—but not all of these solutions are created equally. Instead of wasting time, money, and resources maintaining a complex IT infrastructure, today’s manufacturers are choosing cloud-based solutions that not only meet their current needs but can also adapt quickly to the needs of an expanding organization.


For manufacturers operating in today’s fast-paced, omnichannel-driven selling environment, inventory management is one area where “scale” truly counts. For example, a growing company may make any (or all) of these moves in an attempt to grow revenues and market share: 

  • Expanding into new geographies (e.g., through acquisitions)
  • Overhauling its e-commerce approach to sell more online
  • Developing new product lines and distribution partners
  • Creating stronger alliances with distributors and/or customers
  • Developing a leaner inventory approach that reduces inventory levels while minimizing stock-outs
  • Finding new ways to drive costs out of the manufacturing process 

Achieving these and other growth goals can be more comfortable and less costly with technology, but only if that technology is flexible, scalable, adaptable, and cloud-based. By helping manufacturers minimize manual work and streamline their operations, a scalable inventory management solution can reduce costs, improve efficiencies, and simplify even the most dynamic manufacturing environments. 

This white paper explores how scalable technology helps manufacturers solve their most significant pain points and demonstrate how to pick a solution that will scale with the business. 

Easing Manufacturer Pain Points with a Scalable Inventory Management System

Achieving optimal inventory levels is a delicate balance. Buy or make too little–and you wind up with stock-outs and unhappy customers, too much–and you’re carrying additional costs, taking up valuable space, and potentially stocking obsolete inventory that you will never sell. Intent on running leaner operations that aren’t saddled down with excess inventory or plagued by wasteful processes, more manufacturers are examining their inventory turns and coming up with sound management strategies that satisfy customer demands while also reducing or eliminating: 

  1. High inventory costs
  2. Uncertainty due to fluctuations in demand
  3. Stock-outs
  4. Unnecessary order duplications
  5. High levels of working capital tied up in inventory. 
  6. High storage cost 
  7. Imbalanced shipment lead times.
  8. Lost customers
  9. Loss of materials due to carelessness or pilferage 

Together, these problems add up to substantial financial losses, all of which can be avoided or mitigated by using a scalable inventory management platform that enables high inventory visibility levels on a real-time basis.  

warehouse worker using ERP system

Inventory management includes product ordering, storage, and control. It’s about having the right products in the right quantities in the right place at the right time and at the right cost. By governing non-capitalized assets and monitoring products' movement from manufacturer to end user, inventory management requires detailed record-keeping for every stocked product.

Quality Management: A Critical Part of inventory Control

Ensuring you have the right amount of inventory on hand in the right location—and at the right time—is good enough, assuming that all of the inventory is actually usable or sellable. Deploying an easy-to-use quality management solution that empowers your employees to identify and disposition non-conforming inventory quickly is a critical part of inventory control. It also helps build stronger relationships with customers, vendors, and distributors.

Manufacturers also need to gather as much information as possible about every part of their manufacturing process. It is essential not to wait until the end of the production run to identify if materials and products are non-conforming. A modern Manufacturing Execution System (MES) is not just about tracking labour and machine time; it will also help identify potential real-time issues, track machine-related downtime, and accurately measure scrap raw materials and finished goods.

When all of this valuable information is made available to your ERP system, you can use advanced analytics to identify potential process improvements on an ongoing basis.

Good Inventory Management: From Point of Origin to End User

A critical aspect of supply chain management, inventory management, extends from the point of origin (e.g., the manufacturing plant) to the end user. Left up to chance, it can either tie up cash and hurt organizational profits or save the company’s money while also improving their profits and bottom lines.

Consider these two scenarios:

When you overstock in anticipation of future demand, your company may wind up saddled with “dead stock” in its warehouse, DC, or retail store. This dead stock consumes working capital and uses up physical space, all while sitting still. The products in question may also be on the brink of obsolescence, rendering them unreturnable and useless in the near future.

When you don’t hold enough stock, you risk running out right when customers ask for the goods. Maybe the current tariff situation has you jittery about foreign supply sources, or perhaps your firm’s new e-commerce site is creating unprecedented demand levels for specific items. Whatever the culprit, you now have a stable of unhappy customers to contend with.

In the past, companies tried to avoid these problems by performing physical counts out in the warehouse and then reconciling those counts with paper- or batch-based systems. This task took place on a scheduled basis (e.g., at the end of a set period, such as a month or a quarter), resulting in updated inventory figures.

Today’s inventory management processes incorporate advanced technology. Scalable inventory management software, for example, enables real-time updates of inventory counts regularly. When this process occurs in the cloud, the information can be readily shared with all users and stakeholders across multiple business units and locations.

What is a Scalable Software Platform? 

In the business world, “to scale” means to expand in a balanced and usually profitable way. It’s also used as a noun that translates into proportional growth, especially of production, profit, or a large market position. Specifically, in the software realm, a scalable system is one that doesn’t have to be redesigned and maintains high levels of performance when workloads increase.

Those increases could include more users on the system, the need for higher storage capacity, an increase in transaction levels or pretty much any other event that forces the solution past its original capabilities. Even though it is not seen as a requirement when selecting software, scalability allows your inventory management solution to grow, change, and morph along with your company.


Scalable software platforms provide a myriad of benefits. A manufacturer that’s just starting, moving into a new market, or taking on a new product line, for example, should select a scalable inventory management solution that provides only what the company needs at the time. That translates into lower upfront investment and less user training—both of which are attractive “wins” for companies in the startup phase.

As the manufacturing business starts to grow, however, its inventory management solution has to mature right along with it. An electrical manufacturer that starts out with 200 SKUs and ten electrical contractor customers, for example, but then expands to 2,000 SKUs and 100 customers within two years needs a solution that can scale up without any major redesigns or interruptions.

By preparing for future expansion while keeping complexities to a minimum, scalable platforms leave the door open for changing requirements while helping manufacturers adapt to their changing business environments (and all without a high upfront investment in technology). Because the software was initially designed to grow along with the company, manufacturers can continue to leverage the same software for a longer period of time. Combined, these benefits help companies protect their investments and get the most out of them.

Is Your Software Really Configured for Scalability?

At some point, every manufacturing company experiences the kind of growth that outstrips its technology. Maybe that software was developed decades ago, or it’s just maxed out and unable to scale up any further. It could have been developed on older architectures, and because of this, it can’t integrate with other systems and solutions. Or maybe a manufacturer wants all of the bells and whistles (e.g., dashboards, application programming interfaces (APIs), mobile capabilities, etc.) that modern, cloud-based software platforms have to offer. 


The reality is, in today’s competitive business environment, manufacturers can’t afford to spend time and money on manual inventory management processes, and they can’t afford to work with solutions that don’t adjust to their current and future technology needs. Today’s leading companies are leveraging cloud-based platforms to meet the enterprises’ needs and are no longer relegated to using proprietary, on-premise systems that offer low flexibility levels. 

Suppose a manufacturing company uses Excel spreadsheets to manage inventory, constantly finding itself in either overstocked or understocked positions and dealing with inventory counts that don’t align with what’s on the storeroom shelves. In that case, it’s likely already losing money and customers. Other telltale signs that an inventory management system isn’t working anymore include: 

  • Complicated, time-consuming inventory reconciliation processes
  • Overstocking to ensure that the right amount of product is on-hand when needed
  • Constantly having to manually change physical counts to reflect actual in-stock positions
  • Mismanaged inventory levels
  • High levels of human error (i.e., due to manual data entry processes) 
  • Inability to handle an increased number of (SKUs) as your manufacturing business grows
  • No metrics to leverage to confidently optimize inventory
  • Too much obsolete inventory in the warehouse or distribution centre (DC)
  • Poor demand forecasting

For a company continuing to grow, the right technology will help gain better economies of scale and improve output with less human labour. By investing wisely in technology, a manufacturing company can achieve all of these benefits and more. 

Automating processes such as salesforce reporting, order creation, product allocation, and pick-list printing can increase efficiency across the board. 

The Best Approach: Crawl, Walk, Run

During the software selection process, the vendor’s job is to help the customer “crawl, walk, run” in a way that ensures the right scale for a growing business. Using a step-by-step approach, manufacturers will build the inventory management approach on a strong foundation and set that system (and company) up for future success.

In return, manufacturers gain full visibility into their inventory and the ability to make fast, accurate decisions regarding the allocation of orders and products.

To get started, manufacturers should assess where they are right now and where they want to go.

Assessing Your Current and Future Requirements

Finding the right inventory management system requires assessing the manufacturer’s current needs and future growth plans. And while predicting the future is never an easy thing, assessing a manufacturing business’s current status, identifying any technology gaps and reviewing its plans can help set manufacturers on the right path.

Key questions to ask include:

What are we using right now, and how is it working for us? 

Take an honest snapshot (or bring in an outside consultant or software vendor to provide a third-party opinion) of the current inventory management solution and its capabilities. If it’s not working, tell us why— what’s missing? 

2. What are our current solutions’ limitations? 

What should be on the “wish list” right now if someone asked what the inventory management solution should handle? With today’s cloud-based software systems, virtually anything is possible. 

3. What will you need one to five years from now? 
Brainstorm with the sales and marketing team, talk to your warehouse manager and do some customer focus groups to figure out where the new opportunities are. Taking advantage of them will mean scaling up the inventory management approach to meet your growing manufacturing company’s needs. 

Working through this exercise, manufacturers will have a clear picture of the company’s current inventory management needs and what it will need in 2019 (and beyond). 


Getting the Right Products to the Right Place at the Right Time

Whether a company is just starting out in manufacturing or ready to gain more market share in the field, it will miss the mark if it doesn’t have an efficient, automated inventory management system to build upon. Not only will the company not be able to scale up, but it will always be held back by the number of people it needs to manage all of the manual inventory management processes.

Armed with accurate inventory data that’s recorded, tracked, and optimized with a robust software suite, manufacturers can effectively reduce costs, minimize waste, meet customers’ expectations, and more accurately predict future demand.

By incorporating automation—namely, barcode scanners that enable real-time updates—inventory management software also removes the potential for human error and gives organizations an accurate picture of their inventory status at any given moment.

Combined, these benefits help firms maximize their profits while minimizing their inventory investments. When supported by a scalable, cloud-based inventory management solution, this approach also helps manufacturers protect themselves from fluctuations in demand, reduce the risk of loss, minimize administrative workloads, and avoid ordering duplications. Most importantly, a scalable inventory management platform ensures that customers get their shipments in a timely fashion in today’s on-demand business world—a must-have for any growing manufacturing business.

Flawless Inbound is an official NetSuite Alliance Partner comprising of business professionals dedicated entirely to NetSuite, helping businesses get the most out of their NetSuite investment. With several NetSuite implementations and post-Go-live engagements in the Manufacturing industry backing us, we are the absolute NetSuite pros, committed to scaling businesses. Get in touch for a Free Consultation to see how we can implement and enhance your NetSuite instance.