Manufacturing Inventory Software: Managing Raw Materials and Production

Aleksander Nowak · 2026-02-04 · Manufacturing Basics

Compare manufacturing inventory software for tracking raw materials, production, and finished goods. See what works for batch manufacturers.

Manufacturing Inventory Software: Managing Raw Materials and Production

Retail inventory is simple: products come in, products go out. Manufacturing inventory is different. Raw materials arrive, get transformed through production, and become finished goods. Along the way, you need to track what's consumed, what's produced, and what's left.

Generic inventory software doesn't handle this well. It's built for warehouses and stores, not production floors. Manufacturing inventory software understands that flour and sugar become cookies, that pigments and oils become paint, that ingredients and packaging become products ready to ship.

This guide covers what manufacturing inventory software does, what features matter for different types of production, and which solutions work best for small-to-medium manufacturers.

What Makes Manufacturing Inventory Different

Manufacturing inventory isn't just counting items on shelves. It involves multiple inventory types moving through a transformation process:

Raw materials — The inputs you purchase: ingredients, components, packaging materials. These get consumed during production.

Work-in-progress (WIP) — Partially completed products currently in production. Important for longer production cycles.

Finished goods — Completed products ready for sale and shipment.

Semi-finished goods — Intermediate products that become inputs for other products. Common in multi-stage production.

The key difference from retail: consumption. When you make a batch of lotion, you don't just move bottles from one location to another. You consume base oils, active ingredients, fragrance, and packaging to create something new. Your inventory system needs to understand this transformation.

A proper manufacturing inventory management system tracks what goes in (raw materials), what happens during production (consumption, yield, waste), and what comes out (finished goods). It connects your bill of materials or recipes to actual inventory movements.

Key Features of Manufacturing Inventory Software

When evaluating manufacturing inventory software, look for these capabilities:

Raw Material Management

Track all your input materials with quantities, costs, suppliers, and units of measure. Set reorder points so you don't run out mid-production. For batch manufacturers, this also means tracking lot numbers and expiration dates.

BOM and Recipe Integration

Your inventory system should understand what goes into each product. A bill of materials (BOM) or recipe defines the components and quantities. When you produce something, the system should know which materials to consume and in what amounts.

Production-Inventory Connection

When production happens, inventory should update automatically. Create a production order for 100 units, complete it, and the system should consume raw materials (per your BOM) and add finished goods. No manual adjustments, no spreadsheet reconciliation. This is the core of manufacturing inventory tracking.

Lot and Batch Tracking

For food, cosmetics, pharmaceuticals, and similar industries, traceability matters. Which lot of ingredients went into which batch of products? If there's a quality issue, can you trace affected products? Inventory software for manufacturing industry should handle this natively.

Low Stock Alerts

Get notified before you run out. Set minimum levels for raw materials and finished goods. Better manufacturing stock control software calculates this dynamically based on upcoming production needs.

Multi-Location Support

If you have separate areas for raw materials, production, and finished goods—or multiple facilities—your software should track inventory by location and handle transfers.

Raw Material Inventory Management

Raw material inventory management is where manufacturing software earns its keep. This is fundamentally different from finished goods tracking.

What Raw Material Management Involves

Receiving and recording — When materials arrive from suppliers, record quantity, cost, lot number, and expiration date. Link to purchase orders for easy reconciliation.

Storage tracking — Know where materials are stored, especially if you have multiple storage areas or need climate control for certain items.

Recipe/BOM linkage — Every raw material connects to the products that use it. When you view a material, see which recipes need it. When you view a recipe, see what materials it requires.

Consumption during production — When you complete production, raw materials are deducted automatically based on the recipe. No manual stock adjustments.

Expiration and FIFO — For perishable materials, track expiration dates and use oldest stock first (FIFO—first in, first out) to minimize waste.

Raw Material Software for Batch Manufacturers

Batch manufacturers—food producers, cosmetics makers, paint manufacturers, chemical companies—have specific raw material needs. You're working with ingredients measured in grams, liters, and milliliters. Recipes define precise quantities. Batch sizes vary.

Krafte is built specifically for this type of production. Raw materials track with full details: quantity on hand, cost, supplier, unit of measure, lot numbers, and expiration dates. Every material connects to the recipes that use it. When you complete a production batch, Krafte automatically calculates and deducts the materials consumed based on your recipe and batch size.

For a cosmetics manufacturer tracking 50 different ingredients across multiple product lines, this automation eliminates hours of manual inventory updates and the errors that come with them.

Production Inventory Software: Connecting Materials to Output

Production inventory management software bridges the gap between what you have and what you make. It's not just about tracking—it's about the transformation process.

How Production-Inventory Integration Works

Step 1: Create production order. Specify what product to make, how many units, and when.

Step 2: Check material availability. Does the system have enough raw materials? If not, what's missing? Good software shows this before you start.

Step 3: Reserve materials. Optionally lock materials for this production order so they're not used elsewhere.

Step 4: Produce. Complete the actual production on the floor.

Step 5: Record completion. Mark the production order as done. The system automatically consumes raw materials (based on BOM × quantity) and adds finished goods to inventory.

Step 6: Handle variances. Did you use more or less material than expected? Record actual consumption if it differs from the recipe.

This cycle keeps inventory accurate without manual stock counts after every production run.

Production Inventory in Krafte

In Krafte, production orders are central to inventory management. Create an order for 50 units of face cream. The system calculates material requirements from your recipe—500g of base, 50ml of active ingredient, 50 jars, 50 labels. When you complete the production order, those materials are consumed and 50 units of face cream are added to finished goods inventory.

You can track actual quantities used versus recipe quantities, recording waste or efficiency gains. Everything connects: production history shows which material lots were used, enabling full traceability if you ever need to investigate a quality issue.

Types of Manufacturing Inventory Systems

Different manufacturers need different levels of software capability:

Full ERP Systems

Examples: SAP, Oracle NetSuite, Microsoft Dynamics

Best for: Large manufacturers (100+ employees), multiple facilities, complex financial requirements, regulatory compliance needs.

Inventory capabilities: Comprehensive but complex. Handles everything from raw materials to multi-warehouse management to advanced costing. Implementation takes months and costs $50K-$500K+.

Drawback for small manufacturers: Overkill. You'll pay for modules you never use, spend months implementing, and need dedicated staff to manage the system.

Mid-Market Manufacturing Software

Examples: Katana, Fishbowl, DEAR Inventory, Acumatica

Best for: Growing manufacturers (20-100 employees), discrete manufacturing, companies outgrowing basic tools.

Inventory capabilities: Solid BOM management, production orders, multi-location inventory. More accessible than enterprise ERP but still requires meaningful implementation effort.

Drawback for small batch manufacturers: Often designed for discrete manufacturing (assembling components) rather than process/batch manufacturing (mixing ingredients). May be more complex than needed.

Focused Manufacturing Solutions

Examples: Krafte, Craftybase, Katana (simpler tiers)

Best for: Small manufacturers (1-50 employees), batch/process production, companies that need inventory + production without full ERP.

Inventory capabilities: Raw materials, recipes/BOMs, production orders with automatic consumption, batch tracking, basic reporting. Designed for specific manufacturing types.

Why this works for batch manufacturers: Krafte, for instance, is built specifically for batch production—food, cosmetics, paints, chemicals. It handles recipes with ingredient quantities, tracks lot numbers and expiration dates, and automatically updates inventory when you produce. You're running in days, not months, at €7-47/month instead of thousands.

Spreadsheets

Best for: Very early stage, simple production, testing whether manufacturing software is needed.

Inventory capabilities: Whatever you build. Flexible but manual.

When to move beyond: When you're spending more than 30 minutes daily on inventory tracking, when errors are causing problems, or when you need traceability you can't manage manually.

Best Manufacturing Inventory Software [2026]

Here's how the main options compare for small-to-medium manufacturers:

Krafte — Best for Batch Manufacturers

Focus: Batch/process manufacturing (food, cosmetics, paints, chemicals)

Key features: - Raw material tracking with lot numbers and expiration dates - Recipe management with automatic cost calculation - Production orders with automatic material consumption - Batch traceability (which ingredients → which products) - Customer orders and shipments - Supplier management with incoming shipments

Pricing: €7-47/month depending on volume Implementation: Self-service, start in days Best for: 1-50 person operations making batch products

Krafte stands out for batch manufacturers because it's built specifically for how they work. Recipes define ingredients in grams and milliliters. Production batches consume materials automatically. Lot tracking enables traceability for quality control or recalls. If you're making cosmetics, food products, paints, or similar batch goods, this is purpose-built for your workflow.

Katana — Best for Discrete Manufacturing

Focus: Make-to-order and make-to-stock discrete manufacturing

Key features: - Visual production planning - Multi-level BOM - Shop floor control - Shopify and WooCommerce integration - QuickBooks and Xero integration

Pricing: $179-799/month Implementation: Guided onboarding, 2-4 weeks Best for: 10-200 person operations assembling products, D2C brands

Fishbowl — Best for QuickBooks Users

Focus: Inventory management with strong QuickBooks integration

Key features: - Deep QuickBooks sync - Manufacturing module available - Barcode scanning - Multi-location inventory - Purchase order management

Pricing: ~$329/month Implementation: Requires setup, 2-4 weeks Best for: Companies committed to QuickBooks wanting better inventory

DEAR Inventory — Best for Multi-Channel

Focus: Inventory across manufacturing, wholesale, and e-commerce

Key features: - Manufacturing with BOM - B2B portal - Multiple sales channel integration - Landed cost tracking - Batch and serial tracking

Pricing: $249-999/month Implementation: 2-4 weeks Best for: Manufacturers selling through multiple channels

Odoo — Best Open Source Option

Focus: Modular ERP with manufacturing capabilities

Key features: - Full MRP functionality - Flexible and customizable - Large module ecosystem - Self-hosted or cloud options

Pricing: $50-300/month (or free self-hosted with limitations) Implementation: 1-3 months with configuration Best for: Technical teams wanting flexibility and customization

How to Choose Manufacturing Inventory Software

Use this framework to narrow your options:

1. What type of production?

Batch/process manufacturing (mixing ingredients, chemical processes, food production): Look at Krafte, Craftybase, or simpler Katana tiers.

Discrete manufacturing (assembling components, building products): Look at Katana, Fishbowl, DEAR.

Complex/regulated manufacturing (aerospace, medical devices, multi-stage): Look at NetSuite, SAP, Acumatica.

2. What's your team size?

1-20 people: Focused solutions like Krafte. Full ERP is overkill.

20-100 people: Mid-market options like Katana or DEAR. Maybe simpler ERP tiers.

100+ people: Consider full ERP if you have the budget and implementation resources.

3. What do you actually need?

Must-have for most manufacturers: - Raw material tracking - BOM/recipe management - Production orders - Automatic inventory consumption - Basic reporting

Nice-to-have depending on your situation: - Multi-warehouse - Advanced scheduling - Shop floor terminals - EDI integration - Advanced costing

Don't pay for features you won't use. A batch cosmetics manufacturer doesn't need shop floor terminals designed for assembly lines.

4. What's your budget?

Under $100/month: Krafte, Craftybase, spreadsheets $100-500/month: Katana, DEAR, simpler Fishbowl $500-2000/month: Full Fishbowl, Acumatica, NetSuite starter $2000+/month: NetSuite, SAP Business One, enterprise options

5. How fast do you need to start?

This week: Krafte, Craftybase, spreadsheets This month: Katana, DEAR, Fishbowl This quarter: Odoo, Acumatica 6+ months: SAP, Oracle, large NetSuite implementations

Frequently Asked Questions

What is manufacturing inventory management?

Manufacturing inventory management tracks raw materials, work-in-progress, and finished goods through the production process. Unlike retail inventory (items in/out), manufacturing inventory involves transformation—materials are consumed to create new products. Proper management requires understanding bills of materials, production orders, and how inventory changes during manufacturing.

What software do manufacturers use for inventory?

It depends on size and type. Large manufacturers often use ERP systems like SAP or NetSuite. Mid-sized companies use solutions like Katana, Fishbowl, or DEAR. Small batch manufacturers (food, cosmetics, chemicals) increasingly use focused tools like Krafte that handle recipes and production without ERP complexity.

How do I track raw materials in production?

Use software that connects recipes/BOMs to inventory. When you create a production order, the system calculates required materials. When you complete production, materials are automatically deducted. This beats manual tracking because it's faster, more accurate, and creates traceability records.

Do I need ERP for manufacturing inventory?

Not necessarily. ERP makes sense for large, complex operations with multi-location, multi-entity, or regulatory requirements. For small-to-medium batch manufacturers, focused manufacturing software handles inventory and production at a fraction of ERP cost and complexity. Start with what you need; move to ERP if you outgrow it.

What's the difference between inventory software and manufacturing inventory software?

Standard inventory software tracks items by SKU—receiving, storage, shipping. Manufacturing inventory software additionally understands BOMs/recipes, production orders, and material consumption. It tracks the transformation from raw materials to finished goods, not just movement of items between locations.

Tags: Inventory Management, Warehouse Management, Manufacturing