Many manufacturers now spend excess

Many manufacturers now spend excessive time and resources managing orders to
their suppliers. Labor-intensive processes of tracking disparate forecast and
consumption cause an inventory levels rise and ultimately raise costs for buyers and
suppliers (Mello Adrain, 2001). The ERP implementation helps in lowering inventory
levels by efficient order management and is one of the best tangible benefits that can
used to measure the ROI. For instance when a sales order is recorded into the system,
it triggers an automatic availability check where in the sales person gets clarity on the
availability of inventory before confirming to the required delivery date of the
customer (ATP – Available-to-Promise date). In case if there is inventory shortage the
system generates a purchase request which in turn integrates with the procurement
department for purchase order processing. This is visible in the diagram given above.
From our study respondents belonging to three SMEs agreed that there was a
reduction in the inventory levels between 10-20% and respondents from the other
three SMEs agreed that there was a reduct ion up to 30% in the inventory levels.