Production and Inventory Tracking in Manufacturing Companies

The clearest sign that a manufacturing company needs to digitalise production and inventory tracking is when production stops due to missing raw materials, or excess stock piles up. Balancing these two extremes becomes increasingly difficult with manual tracking methods.

This article looks at when manufacturing companies reach this decision, which options they weigh, and what to consider when choosing the right system.

When do manufacturing companies notice this need?

Small manufacturing companies often track inventory through spreadsheets or the warehouse manager's experience. As order count and product variety grow, this method starts to fall short: a raw material runs out and no one notices, a product gets overproduced and sits in the warehouse, order deadlines don't match the production plan.

At this point, managers usually face a choice: a focused tool that improves inventory tracking, or a broader system that also covers production planning?

Inventory tracking or ERP?

This choice depends on company size and process complexity.

• If the issue is simply "how much of which raw material do we have, when does it run out," a focused inventory tracking module may be enough.
• If the issue is coordination between production planning, purchasing, orders, and stock, ERP software offers a more comprehensive answer.
• If data is scattered across different systems, connecting existing systems first through API integration may be worth evaluating.

Taking on a full ERP project for a small manufacturing workshop can create unnecessary complexity; for growing, multi-layered manufacturing companies, a focused inventory module may fall short.

Which processes should be digitalised first?

For manufacturing companies, the following order usually works well:

1. Inventory visibility: how much of each raw material and product is in stock, and where.
2. Order-production matching: how incoming orders translate into the production plan.
3. Supplier and purchasing tracking: when each raw material needs to be ordered.
4. Reporting: tracking indicators like inventory turnover and delay rates.

Skipping this order and jumping straight into a comprehensive system can make it harder for the team to adopt.

Which questions should be asked during the decision process?

Before choosing a system, the production team should discuss: in how many different places is stock data currently kept? How synced is production planning with stock data? Is the main cause of order delays stock or planning? The answers clarify which solution is more suitable.

Implementation steps during the transition

When digitalising stock and production tracking, the following order reduces disruption:

1. Physical stock count: before moving to the system, physical stock is compared against records and discrepancies are resolved.
2. Pilot with one product group: rather than loading the entire product range at once, start with the group causing the most issues.
3. Joint training for warehouse and production teams: since the person entering stock movements and the person doing production planning look at the same data, both should be trained together.
4. Adding supplier information: as lead times and minimum order quantities are entered, the purchasing side becomes more automated too.
5. Monthly review: changes in inventory turnover and delay rates are monitored over a few months.

What are the common mistakes?

One common mistake manufacturers make in this transition is switching to the new system without a stock count first; the system then starts with incorrect data and trust is lost early. Another mistake is training only the warehouse team while leaving production planning out of the process; the two teams use the same data for different purposes, and consistency only holds when they work together. Also, tracking only current stock quantity without ever entering supplier lead times leaves order timing as a blind spot.

Solutions offered by Lucerna

For companies that want to see production and stock data together, our ERP software solution brings stock, purchasing, and production planning under one structure. For teams that want decisions based on historical data, our data analytics solutions support areas like inventory turnover and demand forecasting. You can find our sector-specific approach on our manufacturing page.

Frequently Asked Questions

Is ERP necessary for a small manufacturing workshop? Usually not; if the process is simple, a focused inventory tracking tool may be enough — ERP makes more sense for complex, multi-layered production.

Can this integrate with our existing accounting system? In most cases, yes; existing systems can be connected via API integration.

How is stock data kept in sync with production planning? A system that processes stock movements in real time should drive production planning off the same data.

To evaluate your production processes, get in touch with us.