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Reduce Wasted Capital! Managing Slow-Moving Inventory with Duet360, The Integration advantage for CRM to ERP


One of the most significant challenges businesses face is dealing with slow-moving or inactive inventory that ties up valuable capital, occupies warehouse space, and drives up costs. Without effective inventory control, businesses often finance excess inventory with loans or credit lines, paying high carrying costs and losing opportunities to stock faster-moving, profitable items.



Integrating Customer Relationship Management (CRM) systems with Enterprise Resource Planning (ERP) software offers a powerful solution to this problem. By combining the insights from customer demand data with operational and inventory information, businesses can more efficiently identify slow-moving products and take proactive measures to optimize their inventory.


Here's how CRM-ERP integration works and how it helps businesses reduce wasted capital tied to slow-moving inventory:


1. Identifying Slow-Moving or Inactive Inventory in Real Time

When CRM and ERP systems are siloed, connecting sales trends with inventory data can take excessive time. With integration, sales and customer behavior data (captured in the CRM) is joined with the ERP's inventory levels and movement data. This combined insight allows businesses to quickly spot which products aren't selling as expected.


For example, a CRM-ERP system might reveal that certain inventory products have been sitting idle for months despite heavy customer promotion. This insight empowers businesses to take immediate action, such as launching targeted marketing campaigns, offering discounts, or even discontinuing the product to free up resources.


Key Benefit: Real-time identification of slow-moving inventory allows businesses to address the issue before it becomes a financial burden.


2. Minimizing Loans or Credit Lines to Finance Excess Inventory

When businesses overstock slow-moving products, they often have to rely on loans or credit lines to finance the purchase of that inventory, incurring interest expenses and tying up working capital that could be better utilized elsewhere. By using CRM-ERP integration, CFOs, and finance teams gain better visibility into which products are moving slowly and can reduce over-ordering or over-production.


CRM insights teach businesses about customer preferences. Companies can adjust their procurement strategies to avoid purchasing too much of a slow-moving item. This ensures that working capital is preserved and reduces the need for external financing to cover excess inventory costs.


Key Benefit: Duet360 from Endowance Solutions helps businesses reduce the need for loans or credit lines to finance unsold inventory, protecting their financial health. It also helps drive real-time coordination among critical team members.


3. Reducing Unit Purchase and Manufacturing Costs

Slow-moving inventory often results from inaccurate demand forecasting. When businesses overestimate demand for a product, they may end up over-purchasing raw materials or manufacturing too much inventory, resulting in inflated per-unit costs. With CRM-ERP integration, demand forecasting becomes more accurate. The CRM provides detailed insights into customer demand, sales trends, and seasonality, while the ERP tracks inventory, production, and procurement.


This integration allows businesses to avoid over-purchasing materials or producing excess stock, helping to reduce the per-unit cost of products. By aligning production and procurement with customer demand, businesses minimize waste and ensure they're not incurring unnecessary costs for slow-moving inventory.


Key Benefit: More accurate demand forecasting reduces unnecessary unit purchases and manufacturing costs by aligning production with customer demand.


4. Optimizing Freight and Logistics Costs

Freight and logistics costs can quickly increase when businesses transport, store, and manage slow-moving inventory. By integrating CRM with ERP systems, companies gain a clearer picture of which products are selling and which are not, allowing them to optimize logistics strategies.


For example, slow-moving products may require fewer or smaller restocking shipments, reducing freight costs. Additionally, by recognizing patterns in sales data, businesses can consolidate shipments or optimize routes, ensuring they're not wasting money on frequent, small shipments of products that are not moving quickly.


Key Benefit: Optimized freight and logistics strategies lower transportation costs associated with moving slow-moving inventory.


5. Lowering Carrying Costs (Warehouse Rent, Labor, Insurance)

Carrying costs are one of the most significant expenses related to slow-moving inventory. These costs include warehouse rent, labor, insurance, and utilities required to store inventory that isn't selling. When products sit in a warehouse for extended periods, these costs pile up, cutting profitability. CRM-ERP integration helps businesses reduce carrying costs by providing insights into which products are lingering in storage and which need to be discounted and sold.


With this data, businesses can stop ordering slow-moving products, offer promotions to clear out excess stock, or make informed decisions to free up warehouse space, and reduce the costs associated with holding unsold inventory.


Key Benefit: Reduce carrying costs by minimizing slow-moving inventory and taking up valuable warehouse space.


6. Prevent Opportunity Costs for Faster-Moving Products

Opportunity cost is a business's potential loss when capital is tied up in slow-moving inventory instead of being used to stock faster-moving, profitable products. CRM-ERP integration allows companies to manage their inventory effectively, ensuring their capital is allocated toward products that generate sales and profits.


For example, if a business identifies that certain products are not selling well, it can reduce the money spent on reordering them. Instead, they can focus on stocking faster-moving items with higher demand, improving overall inventory turnover and profitability.


Key Benefit: By freeing up capital from slow-moving inventory, businesses can invest in more profitable products, reducing the opportunity cost of missed sales.


Conclusion

Are you tired of the same guesswork for maintaining inventory levels properly?


An integrated CRM and ERP solution is a powerful tool for identifying and managing slow-moving inventory by providing real-time visibility into customer demand and inventory levels. Most importantly, it allows businesses to make data-driven decisions that free up valuable capital and warehouse space for faster-moving, higher-margin products.


Endowance Solutions has the business knowledge and expertise to explain the possibilities. If you use Salesforce CRM software, we'd like to learn more about your current business process to help you save money and grow your business.



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