Industry Blog

Streamlining Inventory Management in Steel Fabrication with ERP Solutions

Inventory accuracy is essential in any business, and that’s especially true for the steel fabrication sector, where complex supply chains, traceability, and fluctuations in demand can complicate the process. Every mistake is costly, and if your business is relying on outdated methods or erroneous processes, those mistakes will stack up like sheet metal.

Challenges in Steel Fabrication Inventory Management

The metal fabrication industry operates on infinitesimal profit margins when compared to many other major manufacturing sectors. According to a report by the Fabricators and Manufacturers Association (FMA), the margin could be as little as 4%. That 4% has to go a long way, and it leaves little room for error.

If you introduce ineffective inventory solutions and low-quality metals optimization software, that margin could disappear. And it’s not the only challenge that the metal fabrication industry faces with regard to inventory processes:

Material Traceability

All raw materials must be traced, ensuring rules and regulations are followed, and the highest standards are met. It’s a lot of data, and it’s difficult to maintain and organize without adequate metal fabrication software.

Demand Fluctuations

As in every other industry, demand can change from one day to the next. During slow periods, raw materials must be stored and accounted for to ensure future demand is met.

Supply Chain Disruption

Metal fabrication companies rely on a steady flow of raw materials for the fabrication process. Global events, such as those in 2020/21, as well as natural disasters and supply issues, can interrupt that flow and disrupt the business. The supply chain is also complex, and one missing link could break the chain and create problems for the manufacturer.

Benefits of ERP Solutions in Inventory Management

Enterprise resource planning (ERP) software can remedy many of the inventory issues that steel fabrication companies face. State-of-the-art steel optimization software like the one provided by RealSTEEL offers benefits such as:

  • Improved Accuracy and Visibility: Whether it’s coil processing, plate processing, metal framing, sheeting and leveling, or multi-line processing, ERP gives manufacturing companies more insights into stock status, reducing overspending, preventing lost stock, and allowing for fast and timely reorders.
  • Enhanced Forecasting and Planning: Companies use ERP software to spot trends, predict shortages, and plan ahead.
  • Streamlined Operations and Processes: With less unnecessary stock and automated stock counts, the business can streamline operations and divert resources to where they are needed most.
  • Better Compliance and Reporting: There are rules to meet and regulations to follow in every industry. ERP simplifies this process by giving the companies an easy overview of current stock status.

Key Features of ERP Solutions for Steel Fabrication

Steel fabrication is a precision industry that requires precision software. Properly structured and implemented ERP offers all of the following benefits:

  • Real-Time Inventory Tracking: Stock is tracked in real-time, keeping the business on top of their inventory and triggering notifications when more raw materials are required.
  • Automated Procurement Processes: Once those notifications are sent, the order process begins. Stock is purchased, shipped, and then added to the inventory management software, restarting the cycle and keeping the business ticking over.
  • Integrated Quality Control: Quality is key in an industry such as this, but quality control is time-consuming. ERP uses detailed analytics to report on potential issues with the stock, before triggering processes that replace stock unfit for use.
  • Analytics and Reporting Tools: Which materials are being used the most? Which ones are selling the most? What times are they being used or sold? All of these questions are key, and detailed ERP analytics provides the answers.

Steps to Implement ERP Solutions in Steel Fabrication

ERP can take time to properly implement, but it’s time well spent and will result in fewer losses and wasted resources down the line. Follow these steps to implement ERP solutions in your steel fabrication business:

Needs Assessment and Goal Setting

Assess your current inventory management software and consider your needs. Perhaps you’re struggling with missing stock, carrying too much stock, or failing to find a balance between over- and under-stocked items. Focus on your primary goal and look for inventory management software that can meet that goal.

Choosing the Right ERP System

No two ERP systems are alike. RealSTEEL, for instance, adopts a comprehensive approach to inventory management and general operations, assisting with multiple areas of the business, including stock checking, detailed financial reports, detailed purchasing information, and more. It’s also scalable, so you can choose a level that suits your current needs and then grow as required.

Planning and Customization

All good ERP systems can be tweaked and adapted to suit the specific needs of a steel fabrication business. Consider those needs, plan accordingly, and customize the software prior to integration.

Training and Changing Management

Inventory management streamlines and simplifies the process of ordering, storing, and using stock. It’s also easy to use, but you still need to train your staff on the basics and ensure they are equipped to deal with any challenges that may arise. Effective ERP systems should save you a lot of time and effort, so you may also need to redirect some of those resources.

Monitoring and Continuous Improvement

Implementation is just the start. Once the system is fully integrated into your current setup, it should be closely monitored and regularly updated, ensuring it receives the latest fixes and improvements and continues to meet the ever-changing needs of your growing business.


At RealSTEEL, we design all-in-one solutions for major manufacturing industries, including:

  • Plate processing software
  • Flat rolled software
  • Cut-to-length software
  • Sheeting and levelling software
  • Multi-line processing software
  • Coil processing software
  • Metals nesting software
  • Metal framing software
  • Coil slitting software
  • Pipe and tube software

Our scalable steel service center software can adapt to suit your specific business needs and provide an array of benefits and solutions, including easily organized finances, purchasing management, production management, and the aforementioned inventory management. Contact us today for more information.

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