The geographic isolation of Australia commercially, especially compared to the United States or the European Union, is a challenge that all Australian manufacturers must contend with. The solution is setting up multiple facilities around the world to more easily reach customers, but this brings with it a new problem: multi-location inventory management.

The good news is that cloud ERP systems make managing inventory for offshore warehouses much easier, enabling transparency and real-time insights across all locations.

Scaling up to global distribution

Whether your manufacturing operation is in the middle of a growth phase or you have facilities spread right around the world, staying profitable in a hyper-connected market typically demands you are capable of shipping your product anywhere on the planet.

But the ability to oversee the entire supply chain and accurately track inventory is made more complex when you start adding more destinations to your repertoire. Scaling up and ensuring your operations remain fluid isn’t as simple as flipping a switch. And if you don’t have the right solutions in place it can lead to expensive oversights – especially when you consider that last-mile logistics can cost a whopping 53% of the total cost of shipping.

Top challenges of multi-location inventory management

There are many reasons why you might hold multiple facilities around the globe – perhaps it’s for faster distribution to customers, or maybe certain locations provide more cost-effective storage capacity, or perhaps you need transit warehouses at strategic sites in order to temporarily store goods. Whatever the case, managing multiple facilities has a number of drawbacks:

• Lack of communication: Especially in different geographies where your teams are mostly non-English speakers, it’s common for facilities to have their own unique equipment, processes and communication styles. But if there is no consistency across the organisation, it can create errors such as customers receiving duplicate orders.
• Poor inventory control: For manufacturers that produce a large number of products, management of those goods becomes complicated – and even more so when they are spread across multiple locations.
• Supply-chain bottlenecks: Even the smallest delay in one location can have knock-on effects across the entire supply chain. Bottlenecks such as these can hamper even the most experienced manufacturer, and the cost of delays can be detrimental.

Thankfully, technology has created new ways to eliminate – or at least reduce the impact of – these challenges, especially through a cloud ERP solution.

Tips for managing inventory across multiple locations

So how can your operation thwart these challenges while leveraging the potential profits of worldwide distribution? It starts and ends with software. Having a solid inventory management solution can help you manage multiple locations, monitor large-scale inventory and oversee production from start to finish – all at the same time.

It’s also important to choose your warehouse locations carefully. If language differences, compliance issues or legal requirements will potentially cause bottlenecks, it may be wiser to look further afield. You should also prepare for upcoming demand. Demand planning – especially when using ERP software – can help you predict the ebbs and flows of orders, ensuring you optimise your stock levels across all locations and minimise carrying costs.

4 benefits of cloud ERP systems for multi-location inventory management

By integrating a multi-location inventory management solution into your everyday operations, you’ll access a wealth of benefits, including:

1. Reduced operational costs: Setting up a warehouse in a geographically advantageous location means you can streamline the manufacture and distribution of goods. Furthermore, having a warehouse in a city where you receive a large portion of orders could reduce delivery overheads by 25%, according to McKinsey. With an ERP solution overseeing everything, juggling multiple locations is made much easier.
2. Faster deliveries: Ultimately, having your products spread across multiple locations around the world means your customers can receive their goods quicker. Using multi-location inventory management ensures fulfilment is as fast and accurate as possible.
3. Happier customers: With faster deliveries and lower shipping costs – both of which are major benefits of having multiple warehouse locations – your customers will be happier. An ERP solution can also collect valuable data on orders and deliveries to help you streamline fulfilment even further.
4. Flexible inventory allocation: It makes sense that if one country frequently orders Product A, then you should hold most of that stock at that particular destination. Having multiple warehouses lets you be flexible with where you allocate your stock, and cloud ERP software can help you store all the key data and visualise where your stock is at any moment.

We work with organisations across a wide range of industries, many of which juggle multiple facilities around the world. Finding the appropriate cloud ERP solution that suits your business model is paramount to optimising your inventory management needs. It’s certainly not one size fits all.