Research On Inventory Management Of YLH Company Under The Environment Of ERP

As the mainstream of enterprise information technology development, ERP system hasbecome an important tool for domestic and foreign enterprises to improve the managementlevel, and enhance the competitiveness of enterprises. Currently, ERP have been successfulimplementation in more and more enterprises and has brought enormous economic benefitsfor the enterprise. Inventory management which is one of the core functionality in ERP wouldbe vitally concerned by more enterprises. Inventory management as an important part ofenterprise management directly reflects the level of enterprise management. Success or failurein inventory control will direct impact on the survival of the enterprise. Good inventorycontrol can achieve the corporate cash fast turnaround, reduce inventory holding costs andimprove corporate profitability. On the contrary, too much inventory affect cash flow, increaseinventory holding costs and reduce earnings.This article first introduces some theories of ERP and inventory management, includingthe definition and basic principle of the ERP; general concept of inventory management, andelaborate basic methods of inventory control and ‘Economic Order Quantity’ model. Withpractice to research on actual inventory management of YLH company after on-line ERPsystem. For the current problems of inventory management, specifically, the current stock istoo large, low inventory turns, safety stock setting is unreasonable, pointed out that the YLHcompany do not fully utilize data of ERP system, method of inventory control is not enoughscientific and lack theoretical guidance, management level is still stuck in the past experienceaccumulated management, resulting in the current excessive inventory backlog, inventorymanagement level has not improved.Through the analysis of the causes of YLH company inventory status. With the use ofutility data in the ERP system, we combined with advanced ABC classification managementmethod and the science of safety stock management strategy, proposed recommendations forimprovement and measures and built up scientific inventory management framework in orderto achieve the scientific inventory management and reach the target to reduce inventory.Meanwhile, for those same types of manufacturing companies provide application examplesof how to use the ERP data to build their own inventory management strategy.