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SAP Inventory Management: Ultimate Guide of Pricing, Benefits & Features

Published: May 11, 2022  |   | 
SAP Business One during Inventory Management

SAP Inventory Management can help businesses of any size and scale to streamline the product fulfillment process. Forward-looking business persons prefer this system to maintain the supply chain and achieve objectives related to better customer services. What makes the SAP inventory system special is its capability to work on-premise or in the cloud in line with the unique requirements of users.

According to research, 96% of Best-in-Class growing organizations (the top 20% of performers) have used an Enterprise Resource Planning (ERP) solution. With these solutions, companies across the spectrum can overcome obstacles by implementing a single business system that supports visibility, efficiency, and decision-making. ERP technology is a core business technology that makes your life easier.

In this article, we will discuss the key features of the SAP inventory management system and their benefits for SMBs and large businesses. Let’s begin with the introduction of the SAP inventory system.

What is SAP Inventory Management?

The standard practice of controlling inventory flow is known as inventory management. It consists of various processes. These processes include

  Data Monitoring

It involves collecting information on inventory levels for various items and changes in these levels during various periods.

  Data Interpretation

It is known as generating action items or actionable insights based on the collected data for making real-time decisions.

  Execution based on Action Items

It includes assigning actionable insights to the team and executing the strategy to maintain the inventory levels.

Here it is fair to mention that all these three processes are discrete and businesses need to perform one process at a time to get the best outcome. For example, you need to gather all the data first and then start its interpretation. Finally, you can execute your strategy based on data interpretation.

Usually, businesses have different teams for managing these processes effectively. SAP Business One inventory management software can lend a helping hand in managing all three processes separately yet simultaneously in your team. You can easily implement the overall management strategy with SAP B1 management through proper coordination and collaboration.

Let’s go through some of the most common challenges of inventory management.

Common Inventory Management Challenges

Every day, wholesale distributors face numerous issues or challenges in managing inventory. These challenges eat up a lot of time and effort of employees frequently. As a result, entrepreneurs have to witness poor workflow management and reduced profits. Here is a list of the most common inventory management challenges.


  Tracking Difficulties

Enterprises find it difficult to track the movement of raw materials and finished goods. The manual process of tracking inventory is time-taking and cumbersome, and companies have to allocate some employees for this task every day.

  Supply Chain Complexities

Supply chain management is another big challenge for modern organizations. As multiple departments including procurement, production, and finance are directly related to the supply chain, it remains complicated to manage for companies.

  Improper Management of Orders

Manual order management is a time-consuming process and as companies grow in scale or size, it becomes more difficult to manage orders for the order or sales department. Such manual order management is subject to human errors.

  Error-prone Inventory Process and Loss

Inventory management includes many aspects and if your staff fails to consider any of these aspects, it is possible that the entire process becomes improper and your company may have to face losses in both overstock and shortage conditions.

  Overstocking and Inefficiency in Processes

Lack of accuracy in the manual inventory management process can lead to conditions like overstocking or shortage of products. Both these conditions are risky for any company and make the process inefficient.

  Frequent shortages of products

Improper management of goods or inventory leads to shortages of products. Organizations may not get a clear idea about the movement of various products and therefore, they may have to deal with the frequent shortage of fast-moving products.

Do you know?

Over 48,000 Customers are Running SAP Business One Worldwide

Companies in over 150 countries rely on SAP Business One in 27 languages to help their companies grow fast, drive profit, and run simple

SAP Business One helps Overcome Challenges in Inventory Management

SAP Business One inventory management can improve the management of the stock or goods by promoting best practices. Warehouse and production teams can get real-time data on an easy-to-use dashboard for managing processes effectively. Sales and customer service departments can also get real-time information about the availability of items and improve customer experiences while increasing sales.

Here is how SAP B1 can assist companies to overcome challenges related to inventory management-

  • Displays exact stock status and location
  • Monitors product movement and identifies fast-moving goods through sales tracking
  • Optimizes overstock and shortage conditions with real-time information
  • Improves delivery and fulfillment processes while saving time and effort
  • Enables companies to maintain optimal inventory levels
  • Brings transparency and increases visibility into stock
  • Integrates with finance, sales, logistics, and other departments
  • Monitors expiry dates and enables companies to discard damaged items

Simply put, SAP Business One offers many benefits to modern businesses and facilitates companies to mitigate inventory management challenges.

SAP inventory management system can assist businesses to overcome the challenges effectively. Apart from this, the SAP-powered system offers the following benefits to your business.

Transform your Business & Achieve Extraordinary 360° Value with SAP ERP Solution

Benefits SAP Inventory Management System

Inventory management capabilities of SAP Business One assist businesses to streamline their inventory-related procedures effectively. SAP inventory management module offers many benefits to companies while enabling them to convert the inventory management process into a highly efficient and strategic part of their core operations.

Here are the top benefits of the SAP B1 inventory management system that contribute to optimizing inventory management.


  Optimized Process

Pinpoint accuracy and real-time change in status are some of the key characteristics of the SAP inventory management module. It can take the entire process to a new level with more accuracy and a better experience. Distribution companies, wholesale distributors, and even large-scale retailers can optimize both inventory and supply chain management processes using this module.

  Improved Stock Management

One of the major issues companies face is inefficiency in monitoring stock movement. Thanks to the SAP inventory system, you can easily track what comes in and what goes out on a regular basis. The system also provides you with proper documentation and you can easily manage fluctuations in stock levels and pricing. The dashboard shows stock levels in real-time and you can get the benefit of improved stock management.

  Real-time Inventory Data

This is one of the biggest benefits of the SAP inventory system. You can readily track every item in your inventory. When any item came, where it was stored, and when it left the inventory- all this data can be collected and analyzed with SAP Business One software. Whether your staff is in an office, warehouse, or even at a remote place, it is possible to get access to real-time inventory data.

  Better Planning

Any company, irrespective of the industry type, needs proper planning for raw materials and other requirements. It is essential for organizations that their raw materials remain at optimum level so that they can avoid the unwanted stock-out situation. However, most businesses or companies cannot afford to do manual exercise every day for measuring the raw material. There, the SAP Business One inventory management tool can lend a helping hand.

It assists organizations with both planning and purchasing raw materials while setting up reorder points based on the data related to material usage. This can certainly help companies avoid excessive stock and expensive purchases of materials.

  Accurate Reports

SAP B1 inventory management system has built-in reporting tools like SAP Crystal Reports that provide users with accurate and comprehensive reports for production and warehousing departments. Accuracy in reports can assist business persons to estimate the purchase and inventory for the future and reduce losses in revenue.

  Enhanced Fulfillment

Proper inventory management is useful in speeding up fulfillment and improving the delivery process. It saves a lot of time for businesses and assists you to offer better services to your customers. As a result, you can give your customers an excellent experience through a hassle-free purchase process and timely delivery. You can also save additional costs related to stockout and other unwanted situations.

  Advantage of Cloud

Cloud-based deployment of SAP inventory management system can give you the facility of updating documents and managing important processes in both online and offline manners effectively. Deployment in the cloud also enables your employees to access the necessary data anytime and from anywhere using their smart devices for making instant decisions.

You May Also Like: How SAP Business One can Help in Manufacturing Industries?

Key Features of SAP Inventory Management

SAP inventory management system has many useful features. Here we mention some of the major ones that can assist businesses to manage inventory and even supply chain efficiently.

Features of SAP inventory management

  Warehouse Management

It is designed to monitor data and provide information about different inventory levels in real-time. Businesses can manage inventory and make decisions based on action items with the help of this feature. Warehouse management can work with different cost models and measurement units.

  Goods Receipt

It is necessary to receive and validate goods acquired from vendors or suppliers to manage inventory in the warehouse. The goods receipts feature is useful in storing all the receipts ranging from inbound delivery to purchase orders. You can easily go through any receipt for validation or accounting purpose.

  Bin Location Management

It can manage inventory processes efficiently based on allocation rules and warehouses spanned across different locations. You can optimize stock movement from separate warehouses and reduce picking time by using this feature. It also enables you to automate incoming allocations to specific bin locations.

  Production Planning

Companies can manage the supply chain and manufacturing capacity efficiently with this feature. It assists organizations to manage core processes ranging from sales to production. The production team can create multilevel bills and issue orders for production by using this feature while managing the process.

  Issue Control

It can record the stock data, and track the transfer of goods and consignments. At times, companies may need to discard damaged or unusable materials. This results in a stock decrease. Companies can control the purchase of such materials and manage stock through this feature with ease.


Real-time analysis or tracking of goods movement and evaluation of the overall supply chain performance while monitoring stocks are possible through the reporting feature. You can also monitor KPIs of employees with the reports generated in different formats for various departments in the company.

These features make SAP B1 inventory management software a preferred choice for companies globally.

What Makes SAP Business One a Winner for Inventory Management?

We can mention three big reasons to believe that SAP Business One can be the right option for inventory management.

  More Accuracy

Your staff can easily know what is in stock, and therefore, you can order only necessary items to meet the demand.

  Increased Productivity

While minimizing manual processes for inventory management, SAP B1 can save a lot of time and increase productivity.

  Fulfillment of Multilocation Requirement

Real-time visibility into stock levels and monitoring of stock movement can assist you to fulfill the multilocation requirement.

These key advantages and other business benefits make SAP Business One inventory management a clear winner in the segment. Let’s go through some of its key features that can bring these benefits.

SAP Business One Inventory Management Best Practice

SAP Business One software can enhance the inventory management capability of any enterprise by following the best practices. Here are the ways through which companies can manage inventory in a better way.


  Data Management

Inventory data can be fetched and analyzed properly using the SAP inventory management system. Companies can get real-time updates on every product stored in the warehouse. It is also possible to find the location of a specific product and when it is moved to another location etc. with inventory data management. What’s more, any of your employees can get this information on their mobiles.

  Costing and Material Planning

SAP B1 has built-in multiple currencies and dimensional units. It makes it possible for vendors and retailers to keep prices in different currencies as per units for every product. Also, if you own a manufacturing unit, you can get real-time information about the levels of various raw materials to ensure continuous production. You can maintain optimum levels of materials using the data and make material planning more accurate.

  Stock Management

SAP Business ByDesign system can record the goods receipts and goods issued in the form of documents. It also gives these documents a unique number for ensuring an easy and effective tracking of goods. The SAP inventory management module can record financial documents and logistics-related documents as well to manage stock movements effectively.

  Production & Warehouse Reporting

Documentation, accounts, and auditing requirements of both production and warehouse departments can be easily fulfilled by reporting capabilities of SAP B1. For example, SAP Crystal Reports can generate an inclusive set of reports in line with the requirements of your business in real-time. Companies can also get historic data as and when necessary with this reporting feature.

  Inventory Optimization

Pin-point accuracy, real-time visibility, and automated tracking can assist companies to manage inventories in the best possible way. SAP Business One is a boon for wholesale distributors and retailers because they can track the movement of products to optimize inventory levels. They can also find less popular products and expired goods also to liquidate or discard on time. In a way, inventory optimization can save time and storage space.

How Silver Touch will help you maintain an inventory with SAP

At Silver Touch, we know what it takes to ensure effective inventory management using SAP Business One. As a renowned and accredited SAP Business One Partner, we have an in-house team of over a hundred SAP B1 consultants to assist you in implementing the SAP inventory management system. We can offer a competitive edge over peers with seamless and feature-rich SAP Business One solutions for your company.

Conclusion - SAP for Inventory Management System

The SAP inventory system can streamline procedures and practices related to inventory management for improving the supply chain and customer services. All you need to choose the right SAP inventory management solution provider to overcome various challenges of inventory management and leverage the benefits of advanced features.

Silver Touch Technologies is a trusted SAP partner with over a decade of experience in implementing SAP-powered solutions. Get in touch with us to know more about the benefits of the SAP inventory system for your company or our array of IT services.

Improve & Manage Inventory and Track the Movement of Materials by SAP Inventory System

FAQs about sap business one inventory management System

What is SAP inventory management system?

SAP Inventory Management System offers a complete solution for managing inventory and streamlining product storage. It is suitable for businesses of any size and scale for improving fulfillment and supply chain management processes.

How can SAP be used in inventory management?

SAP assists businesses to oversee the flow of raw materials and products in the warehouse. SAP inventory management software can enable business persons to focus on the movement of inventories and measure their levels.

What are the benefits of sap in inventory management?

SAP inventory management system is beneficial for improving the accuracy of inventory orders, getting rid of out-of-stock situations, and enhancing warehouse productivity. It also assists businesses to save time and money in measuring inventory levels.

What is the use of SAP B1 inventory management?

SAP B1 inventory management can streamline procurement processes, track receipts, and measure inventory levels in real-time. As a result, you can avoid shortages and overstock situations effectively.

How SAP is important for inventory management?

SAP-powered inventory management can boost customer satisfaction by ensuring timely delivery and a better fulfillment process. Your customers can get a hassle-free experience and you can achieve various service goals with ease.