Author: Matt Rickerby Jul 08, 2021 6 Min READ

A Complete Guide to ERP Inventory Management

6 Min READ
A Complete Guide to ERP Inventory Management


Managing inventory is just one piece of the ecommerce puzzle businesses must master in order to be successful. Inventory management, order management, and supply chain management are naturally interrelated, which means they inevitably overlap with one another throughout your daily operations. For that reason, the most efficient and effective way to oversee each of these aspects at the same time is with an all-inclusive management system.

See why Extensiv’s platform outclasses ERPs

Read on to learn more about what constitutes ERP inventory management, the common problems associated with ERP systems, and the benefits of using an alternative solution.


What is ERP?

ERP is an acronym for enterprise resource planning — that is, the integrated management of business processes, typically coordinated with the help of advanced software and technology.

What is ERP inventory management?

ERP inventory management is a unified approach to business planning and operations, wherein companies can control their finances, logistics, and inventory within a single system.

3 scaling problems that ecommerce companies face

stress woman while working on inventory report

Scaling up is a primary goal for ecommerce companies across every industry, as it’s known to lead to greater profitability and higher valuation overall. With that said, scaling your business isn’t without its fair share of challenges and roadblocks, three of which we’ve listed below.

Managing inventory across channels

Expanding to multiple channels is the key to growing your business, but that doesn’t mean it’s always a smooth journey to get there. Multichannel inventory can feel overwhelming at best, and convoluted at worst, especially if you don’t have the systems in place to support you as you scale. While having inventory spread across multiple channels makes sense for ecommerce growth, it can become a real issue when you’re not adequately prepared to do so.

Coordinating your supply chain to meet demand

Establishing a well-oiled supply chain is the ideal way to optimize your inventory levels and guarantee customer satisfaction with every order. And yet, coordinating your supply chain to accurately meet demand is a delicate balance that often causes problems for burgeoning ecommerce businesses. Unfortunately, a non-reliable supply chain opens up a number of unwanted opportunities for stockouts, inventory shortages, and shipment delays.

Data is siloed across applications & channels

As your company scales, you could face a situation where your data is siloed across various applications and selling channels. What this means is, a collection of valuable insights is held by just one department, and is not easily (or fully) accessible by other groups. Your administrative and financial teams need comprehensive information to do their jobs, yet silos tend to share inconsistent or repetitive data that can really hinder everyone’s workflow. 

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2 downsides of ERP systems

ERP inventory systems are pretty popular within the ecommerce landscape, with NetSuite leading the charge among similar software competitors. But the truth is, there are two substantial downsides to using ERP inventory management, which you’re wise to consider before you officially adopt a new platform (and perhaps invest more money than necessary).


Because ERP systems try to provide a ‘one-size-fits-all’ solution for ecommerce businesses, they actually wind up being more complex than other inventory management strategies. In addition, since ERP software is traditionally quite large, it can be slow and cumbersome to operate — and even more so when using a cloud-based program somewhere with a finicky internet connection (like your warehouse, for example). 

Plus, if the ERP system requires an entire hour to reveal inventory updates, it’s bound to cause complications for retailers who depend on accurate reporting to make real-time decisions. 


While it’s possible for ERP inventory management to save some companies money, more often than not, small businesses — who require only a few software solutions — will pay huge costs for this type of program. Too many small stores onboard an ERP system without thinking through their specific business needs, and aren’t aware that ERP implementations repeatedly take longer than anticipated (or fail altogether), which can quickly result in a budgeting disaster. 

And on top of that, if your company has to hire an ERP consultant to run the system for you, you’re looking at exponential costs beyond the initial fees to sign up or become a customer.

Who should use an ERP inventory management system?

Warehouse workers working

In light of their inherent complexity and additional costs, ERP systems aren’t necessarily the right choice for every business. However, for anyone who runs an enterprise-level company, like a corporation with hundreds (or thousands) of team members, ERP software might be it.

For instance, if you have 2,000 employees working in multiple locations, it could be useful to consolidate your human resources, production schedules, and so on into a single ERP platform alongside your other business processes. The main industries currently relying on ERP systems include healthcare, education, hospitality, agriculture, and construction.

5 benefits of using an inventory management system

Warehouse Inventory Manager Works with a Spreadsheet

When your company wants to scale well and exceed customer expectations, using a skilled inventory management system is a proven way to make it happen. With the proper software, your product-based brand can leverage ample benefits to reach your goals in the short-term, and help you maintain that success for years to come. 

Integrations with other ecommerce platforms

If you use a variety of management tools to run your ecommerce business, it’s vital that all of your inventory data is connected to your backend platforms. A good inventory management system will integrate with the likes of accounting software, asset tracking, POS programs, and online marketplaces to create the most holistic solution possible.


These integrations with your existing tech stack or applications can help improve your bottom line, automate repeated tasks, and guarantee you fulfill orders on time regardless of seasonality or changes in customer demand.

Omni-channel inventory management

Omni-channel inventory management is a multichannel approach to sales, which focuses on a seamless and positive customer experience, no matter if someone is shopping from their mobile device or in-person at a retail store. Achieving the perfect omni-channel flow can feel like a daunting task — unless you partner with a proficient inventory management system. 

Today’s management solutions make shifting into an omni-channel mode much less intimidating, thanks to advanced automations for inventory counts, stock synchronization, purchase orders, inventory tracking, and more.

Superior inventory forecasting & analytics

Inventory forecasting is one of the cornerstones of superior inventory management, seeing as accurate forecasting can reduce excess inventory, eliminate overstocking or understocking, and even prevent dead stock from taking up valuable space on your shelves. Inventory management software can easily track sales data and market trends to deliver precise forecasting reports, thus enabling your business to be prepared across the board.

What’s more, the up-to-date analytics offer actionable and measurable inventory insights, meaning you can make any number of product improvements or adjustments as needed.

Easy to scale

The scalability of an inventory management system plays a big part in its overall functionality; if a program isn’t easy to scale, or if it’s unable to grow right along with you, it won’t serve you very well in the long run. Luckily, modern inventory management software has been designed to adapt and expand in conjunction with your company, and can be upgraded later on if you outgrow your original features or applications.

The best inventory management platforms will also offer a range of customizations. Since no two businesses operate the exact same way, these customizations are essential in helping ecommerce retailers scale at an appropriate pace. 

Minimize capital tied up in inventory

Inventory management software serves as a hub for all kinds of information on your suppliers. And because management systems allow you to track critical info on pricing, production, and ship dates from these suppliers, the entire reordering process becomes fully polished — and your ongoing replenishment is much more streamlined. 

Simply put, quality inventory management minimizes the capital you have tied up in your physical inventory, by providing you with the data you need to automate reorder points and safety stock levels (saving you ample time, money, and resources).

Extensiv Order Manager: a targeted ERP alternative for optimizing inventory management


For years, Extensiv has supported ecommerce businesses in creating exceptional customer experiences via innovative management solutions. Extensiv Order Manager’s premium features, software capabilities, and inventory management modules make it an excellent ERP alternative for optimizing and improving every stage of your supply chain.

Inventory tracking

Inventory tracking is a central component of any great management system. Fortunately, Extensiv has the capacity to track inventory, order quantities, and lead times from every supplier you work with, giving you optimal visibility into your goods and materials at all times. This enhanced traceability translates to reduced inefficiencies among your team, and helps you identify important sales patterns to encourage further growth for your brand.

Warehouse management

Although often overlooked, warehouse management is sometimes the determining factor in whether your company flops or flourishes. Without focused efforts to improve warehousing, online stores can run into a handful of fulfillment constraints, like higher costs and lower productivity. But with the help of Extensiv Order Manager, retailers can take advantage of barcode and RFID technology to boost inventory accuracy and improve workflows at every warehouse location.

Supply chain management

If you’re a veteran ecommerce business owner, you may have encountered the pitfalls of stockouts and/or understocking at one time or another. The good news is, when you join forces with Extensiv Order Manager, you won’t have to worry about navigating these same issues with your supply chain. Extensiv Order Manager’s inventory management software generates rapid, real-time inventory calculations for the most exact forecasting, reporting, and inventory control possible.

Order management

Ecommerce companies can have anywhere from one to thousands of suppliers, which can make overseeing stock a real challenge (*unless* they have the backing of an accomplished management system). Extensiv comes with a whole slew of automations that make order management a breeze; with Extensiv Order Manager, you can readily view inventory across multiple marketplaces, and closely track shipments to give customers ultimate confidence in their order.


Generally speaking, ERP systems are better suited to large enterprises as opposed to small businesses, since they come with higher costs and greater complexity. When you only need one or two modules to operate your business, ERP integration has the potential to be more expensive, more complicated, and more time-consuming than it might be worth.

Thankfully, there are other options for inventory management — like Extensiv Order Manager — that are cheaper and easier to implement, but equally as effective at taking control of your multichannel listings. With Extensiv Order Manager, your company can manage multiple warehouses and marketplaces with ease, helping you to scale up and enjoy your success well into the future.

While you may already know a bit about the ins and outs of ERP inventory, there’s a chance you still have some lingering questions. We’ve gone ahead and answered a few FAQs related to ERP, in hopes of giving you some additional clarity around these systems.

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Enterprise resource planning (ERP) FAQs

How does ERP help in inventory management?

Enterprise inventory management can help businesses make important inventory decisions, by providing them with useful product data and insights. ERP programs support companies in taking control of their logistics, operations, finances, and inventory items from a singular system.

What is the difference between ERP and WMS?

Although the terms ERP and WMS (warehouse management system) are sometimes used interchangeably, there are notable differences between the two. A WMS is primarily used to manage product movement and storage within your warehouses, whereas ERP systems automate business processes like accounting, purchasing, order processing, and CRM. In the end, both ERP and WMS are part of the bigger picture of supply chain management, by helping ecommerce businesses function more efficiently and economically.

Written By:
Matt Rickerby

Matthew Rickerby is the Director of Digital Marketing at Extensiv, the leading solution for multichannel, multi-warehouse D2C brands. For the past ten years, he’s covered ecommerce topics ranging from conversion rate optimization to supply chain management.


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