ERPs keep stock records; some also offer planning features: minimum and maximum stock levels and a reorder point field on the product card, critical stock reports, or MRP for manufacturers. This page compares such ERP features with VidiStock’s approach. It makes no claims about a specific version of a specific ERP; you can assess what your ERP does with the questions below.
Two approaches
| Topic | Planning with levels set on the card | VidiStock |
|---|---|---|
| Where the levels come from | Minimum, maximum and reorder point are entered on the product card by hand | Recalculated in every forecast run from the demand forecast, forecast error and lead time |
| When demand changes | Levels stay the same until someone updates them | Change automatically in the next run; a seasonal increase shows up in advance |
| Uncertainty | Usually not considered, or added as a fixed margin | Safety stock from forecast error and lead time variability, for a service level |
| Slow-moving products | Same rule as other products | A separate method family (Croston, SBA, TSB) |
| Forecast error | Not measured | Measured and reported for every product and warehouse |
| Explanation of the calculation | Who entered a level and why may be unknown | A step-by-step breakdown of every suggestion |
| Analysis | ERP reports | ABC/XYZ, capital tied up in stock, turnover, FX risk, customer concentration, supplier scorecard |
| Data entry | One place: the ERP | Read automatically from the ERP; no extra data entry |
| Cost and setup | Already in the ERP | Separate subscription or licence, connector installation |
Questions to ask about your ERP
- Are minimum and reorder point levels calculated automatically from past sales, or entered by hand?
- Does the calculation account for demand variability and lead time variability?
- Can a target service level (for example 95%) be entered?
- For seasonal products, do levels rise before the season?
- Is there a separate method for slow-moving products?
- Is forecast error measured and reported?
- Is there planning per warehouse and transfer suggestions between warehouses?
- Can you see how a suggestion was calculated?
If most answers are “yes”, your ERP is most likely enough.
Which fits whom?
ERP features may be enough: few products, regular demand, someone reviews the levels regularly, running out or overstocking costs little.
VidiStock makes a difference: hundreds or thousands of products, seasonal or intermittent demand, several warehouses, card levels go stale and nobody can update them all, the reasoning behind order decisions needs to be shown.
The two can also be used together: the reorder point and safety stock VidiStock calculates can serve as a reference for updating the levels in the ERP.
Related: ERP integrations, Reorder point.