Inventory management makes or breaks a manufacturing operation. Without a firm grip on the flow of raw materials, components, and finished goods, you’ll battle bottlenecks, stockouts, and wasted resources. That is why manufacturing inventory management sits at the center of a healthy production line.
It all starts with managing your raw material inventory. Lose track of those parts, and the effects cascade through the rest of your organization. Get inventory right, and you keep costs in check while running smoother production.
The job gets easier with the right manufacturing inventory management software. Below, we cover what the software does, why it matters, the features to look for, and how to choose. We also compare seven of the best solutions on the market.
Key takeaways
- Manufacturing inventory management software tracks raw materials, work in progress, and finished goods in one system so stock counts stay accurate.
- A manufacturing inventory system cuts carrying costs, prevents stockouts, and protects on-time delivery, as Fishbowl customer Grill Works Inc. has shown.
- Bill of materials tracking, real-time visibility, reorder automation, barcode traceability, and accounting sync are the features worth comparing.
- Seven leading solutions in this guide include Fishbowl, QuickBooks Enterprise, Odoo, and MRPeasy.
What is manufacturing inventory management software?
Manufacturing inventory management software is a system that tracks raw materials, work in progress, and finished goods for manufacturers. It keeps production on schedule and stock counts accurate.
Raw materials fall into two groups:
- Direct materials: The essential inputs that become part of the finished product, such as wood for furniture or flour for bread.
- Indirect materials: Supporting supplies like machine lubricant or cleaning products that the process needs but the product never contains.
The software follows a material from receipt to shipment. A typical flow looks like this:
- Receive raw materials: Log incoming parts against a purchase order (PO) and update stock the moment they arrive.
- Allocate to a build: Tie materials to a bill of materials (BOM) and a manufacture order (MO).
- Record consumption: Deduct materials as they move into work in progress (WIP).
- Move finished goods to stock: Add completed products to inventory when the order closes.
That end-to-end view is the foundation of raw material inventory management: holding the right materials, in the right quantity, at the right time. Too much material wastes capital and storage space. Too little risks delays and missed deadlines.
Why does manufacturing inventory management matter?
A manufacturing inventory system gives manufacturers several concrete benefits, and the stakes are real. Siemens estimates that unplanned downtime costs the world’s 500 largest companies about $1.4 trillion a year, equal to 11% of their revenues. Tighter control over materials is one lever that keeps production running.
1. Cost savings
Storing unsold finished goods, overstocking raw materials, and stalling production all carry a cost. The right system trims these expenses by optimizing stock levels through reorder alerts and forecasting. Fishbowl reports that customer Extract Production, an oil-and-gas services manufacturer, saved $11 million in inventory costs and cut stockouts 22%.
2. A better customer experience
When stock data is accurate, you know exactly what you can promise. That prevents customers from buying out-of-stock products or waiting on delayed orders. Grill Works Inc., a Marshall, Minnesota manufacturer, reached a 99% on-time delivery rate with Fishbowl.
3. More efficient operations
Optimizing stock levels balances meeting demand against overstock. That means fewer production delays from missing materials, less cash tied up in excess inventory, and lower risk of obsolescence or spoilage.
4. Accurate forecasting based on historical data
Inventory tracking gives you the data to plan production volumes around real trends and demand. In McKinsey‘s 2024 Global Supply Chain Leader Survey, two-thirds of companies were investing in advanced planning and scheduling systems. Only 10% had deployed them, so better forecasting remains a real edge.
5. Scaling without added overhead
Cloud-based manufacturing inventory software lets your system grow without steep costs. You can add volume without the extra hardware or labor that manual methods demand.
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What features should you look for in manufacturing inventory management software?
The right platform should cover the full path from purchase order to finished goods. Prioritize these features as you compare options:
- Production order tracking: Manage multi-level bills of materials, manufacture orders (MOs), and work orders (WOs) in one place.
- Real-time visibility: See committed, available, and on-order quantities across every location the moment a transaction posts.
- Reorder automation: Set reorder points and low-stock alerts so purchasing keeps pace with production.
- Barcode and lot traceability: Scan materials at each stage and track lot and serial numbers for quality control and recalls.
- Accounting sync: Push production costs to your accounting platform for clean cost of goods sold (COGS) and landed-cost tracking.
- Forecasting: Use historical demand to plan purchasing and production before shortages appear.
What are the common challenges of manufacturing inventory management?
Knowing why you need a system is one thing. Knowing how to run it is another. A solid plan has to account for the problems that trip up even seasoned manufacturers:
- Accurate demand forecasting: Unexpected spikes or dips in demand leave you scrambling with too much or too little stock.
- Supplier reliability: A production process is only as strong as its weakest link, so supplier delays throw the whole operation off track.
- Storage and handling: Raw materials come in every shape and size, so finding space and maintaining conditions can be a puzzle.
- Waste and obsolescence: Limiting losses from expired or damaged materials takes careful tracking and smart inventory turnover.
- Data accuracy: Manual entry and outdated systems create costly errors and inaccurate counts that lead to poor decisions.
- Traceability: Quality control, recalls, and compliance all require the ability to track materials across their full lifecycle.
How do you choose the right solution?
Comparing tools is easier when you weigh them against the same criteria. Score each option on these five points:
- Production depth: Confirm the tool handles multi-level BOMs, work orders, and job production, not just stock counts.
- Accounting sync: Check that it connects to QuickBooks or Xero for clean COGS and landed-cost allocation.
- Deployment: Decide whether cloud or on-premises fits your data-control and access needs.
- Total cost: Look past the sticker price to implementation, support, and add-on fees.
- Traceability: Make sure lot and serial tracking meet your quality and compliance requirements.
What are the 7 best inventory management software solutions for raw materials?
Manufacturing inventory software helps manufacturers streamline processes and gain real-time visibility. Unlike old-school methods that rely on manual counting and spreadsheets, cloud-based tools remove the tedium and the human-error risk. Here are seven of the best options on the market today.
1. Fishbowl
Fishbowl runs in the cloud or on-premises and serves manufacturers, wholesale distributors, and other businesses with complex inventory needs.
Features
- Converts manufacture orders (MOs) to purchase orders (POs)
- Tracks work in progress (WIP), finished goods, and multi-level bills of materials (BOMs)
- Simplifies reordering with reorder points and low-stock alerts
- Scans barcodes with a handheld scanner or mobile device
- Builds custom dashboards and reports in plain language through Fishbowl AI Insights
- Direct QuickBooks integration, among dozens of others
Cons
- Required implementation package not included with Fishbowl Inventory
Setup takes real time, but you are not doing it alone. Fishbowl includes in-house implementation specialists, dedicated trainers, and AI-guided data migration before you go live.
2. QuickBooks Enterprise
Best known for accounting, QuickBooks Enterprise adds inventory management capabilities on top.
Features
- Automatic PO creation
- Raw material item record creation
- Available-to-promise feature to project realistic delivery dates
Cons
- Limited scalability for growing businesses
- Does not support organizations that handle job production
3. Odoo
Odoo is an open-source enterprise resource planning (ERP) system with a modular design and a wide range of integrations.
Features
- Automatic PO proposal or creation
- Automated vendor follow-ups
- Supports barcodes, QR codes, and scanning for products without barcodes
Cons
- Complex implementation with a steeper learning curve than other solutions
4. Cin7 Core
Cin7 Core helps small businesses manage inventory across multiple sales channels from one cloud platform.
Features
- Multichannel order and inventory sync across sales channels
- Built-in business-to-business (B2B) and point-of-sale (POS) capabilities
- Automated reordering and stock transfers between locations
Cons
- Reporting tools that many users find limited
- Mixed feedback on customer support
5. inFlow Inventory
inFlow Inventory pairs user-friendly inventory management with sales and purchasing tools.
Features
- Intuitive barcode integration
- Advanced reporting
- Optional BOM and work order add-ons
Cons
- Limited integrations
- Not cost-effective above 30,000 orders per month
6. MRPeasy
MRPeasy gives small manufacturers cloud-based material requirements planning (MRP), plus production planning and scheduling.
Features
- Detailed production planning
- Real-time reporting
- BOM creation and importing
Cons
- Limited integrations
- Not ideal for larger businesses
7. Unleashed
Unleashed focuses on manufacturing inventory, with batch tracking and support for multiple warehouses.
Features
- Supply chain costing and management
- BOM creation
- Disassembly feature that returns unsold components to raw inventory
Cons
- No demand forecasting
- May be too complex for small businesses
Streamline your raw material inventory with Fishbowl
Tracking and managing raw materials in real time keeps records accurate, cuts waste, and optimizes production. Fishbowl brings it together as the all-in-one inventory management solution. It controls stock, warehouse operations, manufacturing workflows, and raw materials inventory in one system.
Ready to gain end-to-end visibility over operations? Schedule a demo of Fishbowl, the intuitive, scalable platform for both large and small businesses.
Frequently asked questions about manufacturing inventory management
Is dedicated inventory software different from a full ERP?
Yes, a full ERP tries to run every function in your business, from HR to finance, which brings a long, expensive implementation. Dedicated inventory software focuses on materials, production, and stock, then syncs with the accounting system you already use. For most small and midsize manufacturers, that focused approach delivers the control they need without the cost of an ERP project.
How does the software track raw materials to finished goods?
The software ties every item to a bill of materials and a manufacture order. When you start a build, it deducts the raw materials consumed, tracks work in progress, then adds finished goods once the order closes. Barcode scans and lot or serial numbers record each movement, so you always know what you have and what production still needs.
How much does manufacturing inventory software cost?
Pricing usually depends on the number of users, the features you enable, and whether you run in the cloud or on-premises. Some vendors charge extra for add-ons like locations, orders, or integrations, so the sticker price rarely tells the whole story. Compare total cost of ownership, including implementation and support, and confirm which capabilities are included before you commit.
Should you choose on-premise or cloud manufacturing inventory software?
Cloud software is accessible from anywhere, updates automatically, and avoids upfront hardware costs, which suits teams that want to scale quickly. On-premises software keeps data on your own servers, which appeals to businesses with strict data-control requirements. Some platforms, including Fishbowl, offer both, so you can pick the deployment that fits your operation today and change course later.
Can QuickBooks handle manufacturing inventory on its own?
QuickBooks is strong accounting software, but its inventory tools were not built for multi-stage production. It struggles with multi-level BOMs, work orders, and job production, which manufacturers rely on daily. Pairing it with dedicated inventory software adds production-grade control and keeps your books in one place, since the two systems sync automatically.
Related posts
Explore these related inventory and manufacturing resources:
- Best Raw Material Inventory Management Techniques
- Material Requirements Planning (MRP): A Beginner’s Guide
- Raw Materials Inventory Management Guide: Best Practices
- 7 top manufacturing ERP software solutions
- Process manufacturing: Basics, benefits, and more
- 10 tips to streamline your bill of materials management
- How to Overcome Inventory Inefficiency
- What are the Crucial Components of Material Management in Construction?
- From chaos to control: Implementing an inventory control management system