Most Important ERP Features for Inventory Management

Find out what key features to look out for in an ERP when choosing a system to manage your inventory.

Suppose you own a clothing store that sells various products, such as shirts, pants, jackets, and accessories. You have multiple suppliers, warehouses, and sales channels. In this scenario, what do you need your ERP system to do to help you streamline your operations and achieve maximum efficiency - and how?

Before we answer the question, it's important to know what ERP inventory management is. ERP is a systematic control for businesses to manage their inventory operations. You can benefit from the ERP's integration feature with different business functions, such as planning, logistics, operations, and finance, providing real-time data on inventory levels, locations, and movements.

Businesses typically want to gain a competitive edge by optimizing their inventory management to reduce costs, increase their efficiency, and improve customer satisfaction. To achieve their business goals, businesses avoid stock-outs or overstocking, optimize warehouse space and layout, and ensure faster and more reliable delivery of products to customers by using ERP software.

Let’s discuss the key features that are crucial in getting the perfect ERP to manage your inventory.

Double-entry inventory

Odoo Double entry inventory

Double-entry bookkeeping is a method of accounting that records inventory transactions twice. In the grand scheme of ERP, the ideal system should be able to track every stock move from purchase to warehouse bin to sales order and have the comings and goings of your stock recorded. 

The benefit of auto-transfers in an ERP system is to let you plan transactions and assist with bookkeeping automation. Accordingly, it makes your financial control more accurate and easier with less manual work and errors.

For instance, every time a stock move occurs, an ERP like Odoo automatically handles it with the same management system. It means that the software automatically deducts stock input that you have configured in Odoo from your vendor’s location and adds stock output to your warehouse. This way, workers would save time by not having to manually change the stock levels each time goods leave your warehouse. 

Quality control, advanced traceability, and tracking

Lots/serial number

Quality control in advanced traceability and tracking are ERP features for inventory that allow businesses to monitor the quality, expiry, warranty, and location of each product using lot and serial numbers. You will find this feature especially handy if your business sells perishable goods like food. 

Having good tracking and traceability allows businesses to optimize their inventory levels and avoid overstocking or understocking. Along with quality control, they can reduce the risk of inventory spoilage, damage, or theft by tracking the shelf life and condition of each product.

It is simpler to meet the regulatory and quality standards of their industry and customers by maintaining detailed records of their inventory transactions. Companies can also demonstrate their social and environmental responsibility by ensuring the safety and sustainability of their products.

You might want to consider some of the specific key features to monitor the quality of your goods throughout the different stages of your inventory and manufacturing processes, such as

  • Quality checks
  • Expiration date monitoring and notification
  • Warranty management
  • Inventory valuation
  • Lot and serial numbers

If you need to learn the technical aspect of how ERP features for inventory read about product tracking and removal strategies in our article.

Odoo • Image and Text

Ready to enjoy an elevated inventory management from an ERP solution?

Barcode scanning

Odoo barcode scanner

Barcode integration with inventory management systems can help businesses optimize their inventory management and achieve their operational and financial goals by saving time and resources. There are not many open-source ERPs that provide barcode scanning integration to track goods and count inventory. This is where Odoo ERP capacities for inventory management excel - so let’s use it as an example. 

Odoo’s barcode feature enables you to update stock quantities, record damaged or expired items, and perform other inventory adjustments, which maintains accurate inventory records. Another benefit of barcode integration is that it helps perform regular cycle counts and audits using the barcode scanning method. For example, warehouse workers can use the ERP system to help them quickly count and reconcile physical stock with the system records, which reduces manual errors during stock audits.

Barcode is also a great method to track the movements and statuses of inventory items within and outside the warehouse. The barcode feature in Odoo allows you to track inventory by batch or serial numbers. By scanning barcodes, you can easily trace the movement and history of specific batches or serial numbers, ensuring better product traceability and quality control.

Odoo is also recommended because it is more efficient to have an ERP with a barcode system that can work with common gadgets, like a mobile device with a built-in camera. This way, you can further reduce expenditure by using pre-existing devices.

Automated replenishment

Odoo automated replenishment

In theory, automated replenishment is a feature that helps businesses reorder items from suppliers or move items from reserve storage to primary locations in time to meet customer demand without accumulating excess inventory. The benefit of possessing the automated replenishment feature is increased profitability by reducing expenses and minimizing overstocking and stockouts while holding down shipping and carrying costs.

In an ERP environment, the ERP features for inventory management typically generate a replenishment order for products based on predefined criteria such as current inventory levels, sales forecasts, reorder points, and lead times to determine the optimal quantity and timing of inventory replenishment. The specific triggers and timing depend on your business’s inventory management policies and systems that you have installed in place.

As an example, Odoo offers two key methods to manage the reordering of products: reordering rules and the Make to Order (MTO) route. Reordering rules allow you to set the minimum and maximum stock levels for each product, and Odoo will automatically create purchase or transfer orders to replenish the stock when it falls below the minimum. The MTO route allows you to create purchase or manufacturing orders on demand, based on confirmed sales orders from customers.

Multiple warehouse management

Odoo Multi-warehouse

Going out-of-stock when a popular item is in high demand wastes profit opportunities - especially if you find out later that one of your warehouses still has the item. This is the importance of multi-warehouse management. Multi warehouse management ERP feature for inventory works to manage inventory across multiple physical locations or warehouses so that businesses can track and control inventory levels and movements, and check stock availability to reach optimal stock levels and fulfill orders on time.

With multiple warehouses, businesses can strategically position inventory closer to customers, reducing shipping time and costs. This enables faster order fulfillment and improves customer satisfaction. Multi-warehouse management also allows for intelligent order routing, ensuring that orders are fulfilled from the warehouse with the available stock and shortest delivery time.

ERP systems like Odoo provide a centralized platform to manage inventory across multiple warehouses. It allows businesses to define their warehouse structure and configure various parameters like storage locations, picking rules, and delivery methods. This flexibility enables businesses to adapt the system to their specific warehouse management needs.

Advanced routing for goods delivery

RoutingStreamlined operations leads to faster turnaround times and reduced costs through reduced labor and inventory holding costs. Like a snowball effect, advanced routing works to maximize warehouse capacity. Effective routing improves efficiency by optimizing the movement of inventory, reducing travel time, and increasing productivity. By having goods going in and out effectively, you’ll end up having optimal space utilization not only in your cargo but also in your warehouse.

An ERP like Odoo provides a Route Planning feature that allows you to define and manage delivery routes. You can set up routes based on various criteria such as geographical location, customer preferences, or delivery zones. This helps in optimizing the sequence of deliveries and reducing travel time.

With geolocation services, such as Google Maps, Odoo’s ERP capacities for inventory management can help you provide accurate mapping and routing capabilities. This allows visualization and route planning based on real-time traffic conditions, distance, and other factors, so you can select the most efficient routes for deliveries. Couple it with real-time tracking, you can monitor the progress of your delivery vehicles, estimate the arrival time, and check for any deviations that could occur using the selected delivery route.

Bonus tip: If you procure your goods from a supplier, Odoo ERP for inventory management offer several delivery methods to maximize your logistic space usage other than routing. Dropshipping, a delivery method where an order arrives and the product is shipped directly from your supplier to the customer, is useful to reduce inventory holding costs and allow you to have more warehouse space. Meanwhile, cross-docking transfers incoming goods from supplies directly to outbound vehicles for immediate delivery. The mechanism reduces handling costs and minimizes inventory holding time. 

Direct integration with other apps 


When core modules are interconnected with inventory management, data flows seamlessly between different functions. It goes by default that direct integration reduces manual intervention and allows more room for task automation.

A simple integration scenario would sound like this. In Odoo, your sales orders can automatically update inventory levels. The Purchase module can generate purchase orders based on inventory needs. When stock is replenished, inventory levels are automatically updated in the Inventory module, and the order is allocated based on available stock.

If your business is also operating a manufacturing chain, a fully integrated Odoo ERP enables your manufacturing manager to request material replenishment, update the finished production, and distribute to the right locations directly. The product status is then automatically updated in the Inventory module.

Then, the Accounting module can track inventory costs. Using CRM, sales representatives can quickly check inventory availability using the Product Availability feature, provide accurate delivery dates, and track order status through Delivery Date and Order Tracking features in the same module, respectively. 

As a bonus, inventory users can generate reports that provide insights into inventory performance, such as stock turnover rates, demand patterns, and profitability.  Through Odoo ERP for inventory, you’ll be able to make data-driven decisions, optimize inventory levels, and identify areas for improvement.

Learn how Odoo helped Mitsubishi Chemicals integrate different business functions to report how purchases affect their budgets and assess vendor performance. 

Choose Odoo for inventory management

If you are looking for comprehensive and reliable ERP capacities for inventory management, Odoo is the best choice for you. 

Streamline your operations and achieve maximum efficiency with Odoo. You can benefit from double-entry datakeeping, which ensures the accuracy and consistency of your inventory records. You can also enjoy advanced traceability and tracking and calculate the optimal quantity and timing of your orders. Additionally, you can streamline your operations with barcode scanning, to enjoy fast and error-free data entry and verification. 

Say goodbye to manual routing! Planning and executing the best routes for your deliveries can be done easily using Odoo. Enjoy integrating your inventory management with other business apps, such as sales, accounting, manufacturing, and e-commerce to enhance your efficiency and productivity. 

Portcities is a global Odoo partner that has extensive experience in implementing Odoo to help businesses across the globe save costs in their inventory management. Contact our team to learn how we can help you get the best solution for your inventory management needs.

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