Material Inventory Management Software: Track Raw Materials Through Production

Aleksander Nowak · 2026-02-20 · Inventory Management

Specialized software for tracking raw materials in manufacturing. Bills of materials, batch consumption, lot traceability — what retail tools can't do.

Material Inventory Management Software: Track Raw Materials Through Production

Retail stock tracking is simple: products come in, products go out. Manufacturing is different. Raw inputs arrive, get consumed in batches, become work-in-progress, and eventually transform into finished goods. Each stage needs tracking.

Generic apps don't understand this flow. They track quantities but can't calculate how much you need for orders, can't deduct ingredients when you complete batches, and can't trace which supplier lots ended up in which products.

Specialized systems handle these manufacturing-specific needs. This guide explains what these tools do, which features matter, and how to choose software that fits your operation.

What Does This Software Do?

This category of tools tracks raw inputs, components, and supplies that go into making products. Unlike retail systems that track finished goods only, these tools understand that items transform through batch processes.

The software maintains records of: - What raw inputs you have on hand - Where items are stored - Which supplier lots they came from - When they expire (if applicable) - How much you need for upcoming batches - What gets consumed when you manufacture

This information drives purchasing decisions, planning, and cost calculations. Without accurate tracking, you're either running out of ingredients or sitting on excess stock.

Why Manufacturing Needs Different Tools

Standard stock-tracking software fails manufacturers in several ways:

No Bill of Materials Support

Retail systems track products as discrete units. Manufacturing requires understanding that Product X needs 500g of Ingredient A, 200ml of Ingredient B, and 5 units of Component C.

Without bill of materials (BOM) support, calculating requirements means manual spreadsheets for every batch.

No Consumption Tracking

When you sell a retail product, stock decreases by one unit. When you manufacture something, multiple raw inputs decrease by various amounts according to your recipe.

Systems without this logic can't automatically deduct items when you record output.

No Work-in-Progress Visibility

Making products isn't instant. Ingredients enter a batch, processing happens, and finished goods emerge later. During this time, those inputs are neither raw stock nor finished products — they're work-in-progress (WIP).

Retail systems have no concept of WIP, making it impossible to know your true position during batches.

No Lot Traceability

If a quality issue emerges, manufacturers need to trace which supplier lots went into which batches. This is legally required in food, cosmetics, and pharmaceutical manufacturing.

Standard tools track quantities but not lot-level genealogy.

Core Features to Look For

Effective systems in this category include these capabilities:

Raw Input Tracking

Monitor everything used in manufacturing: ingredients, components, packaging, supplies. Track quantities, costs, locations, and supplier information.

Each item record includes: - Name and description - Unit of measure - Current quantity on hand - Reorder point and preferred supplier - Cost (for costing calculations) - Storage location - Shelf life (if applicable)

Bills of Materials (Recipes)

Define what goes into each product. Specify quantities precisely: - 500g flour - 300ml water - 10g yeast - 5g salt

The system uses these recipes to calculate requirements and deduct stock when batches complete.

Batch Recording with Auto-Deduction

When you record completing a batch, the system automatically: - Deducts raw inputs based on the recipe - Adds finished goods to stock - Records which lots were consumed - Calculates batch cost

No manual adjustments needed.

Lot and Batch Tracking

Assign or record lot numbers for incoming items. Track which lots get used in which batches. Maintain the chain from supplier through manufacturing to customer.

When a quality issue emerges, query: "Which products used lot #ABC123?" Get answers in seconds instead of hours.

Expiration Date Management

Track shelf life for perishable items. Get alerts before things expire. Prioritize older lots (FIFO).

Prevent waste from expired stock sitting forgotten in storage.

Reorder Management

Set minimum levels for each item. Receive alerts when quantities drop to reorder points. Some systems generate purchase orders automatically.

Never run out of critical inputs because someone forgot to check levels.

Multi-Location Support

If items are stored in multiple locations — different warehouses, areas, or storage zones — track quantities by location. Know not just total quantity but where everything is.

Cost Tracking

Record purchase costs. Calculate batch costs based on consumption. Understand true product costs including all ingredients.

Multi-Level BOMs

Some products require intermediate steps — you make a base mixture, then use that mixture in final products. Multi-level (nested) BOMs handle this: define sub-assemblies or semi-finished goods that become ingredients in other recipes.

Unit Conversion

You might purchase flour in 25kg bags but use it in grams. Good systems handle conversion automatically — enter purchases in one unit, track consumption in another.

Barcode and QR Scanning

Scan items at receiving and during production instead of typing. Reduces errors and speeds up data entry. Most systems support standard barcode scanners or smartphone cameras.

Mobile Access

Warehouse staff shouldn't need a desktop computer to record receiving or check stock. Mobile apps or responsive web interfaces let people update from anywhere on the floor.

Accounting Integration

Connection to your accounting system. Consumption should flow into cost of goods sold (COGS) without manual journal entries. Stock value should stay synchronized.

Comparing Options on the Market

The market includes makers-focused tools, MRP systems, and full ERP platforms:

Maker-focused tools ($19-49/month): Designed for small-batch producers selling on Etsy, Shopify, or farmers markets. Good BOMs and costing, but may lack features as you scale.

MRP systems ($49-199/month): Built for small manufacturers. Include BOMs, batch tracking, purchasing, and often sales/CRM. Best balance for growing operations.

Lightweight ERP ($199-500/month): More comprehensive — multiple warehouses, advanced reporting, deeper integrations. Better for established businesses with complex needs.

Full ERP ($500+/month): Enterprise-grade with everything included. Requires significant investment in implementation and training.

For manufacturers doing $500K-$5M in revenue, MRP-level systems typically hit the sweet spot — enough capability without enterprise overhead.

Choosing the Right System

The market includes options ranging from basic tools to comprehensive manufacturing systems. Here's how to evaluate:

Match Features to Your Needs

Most small manufacturers need BOM support and batch recording at minimum. Add lot tracking if you're in a regulated industry or want quality traceability.

Evaluate Integration Needs

This type of tracking doesn't exist in isolation. Consider how it connects to:

Purchasing: When you reorder, does the system create purchase orders? Does receiving update stock automatically?

Planning: Can you see availability when scheduling? Does the system warn if inputs are insufficient?

Sales and orders: Can you check if you have what's needed to fulfill customer orders before committing?

Accounting: Does consumption flow into cost of goods sold? Can you track value?

Integrated systems reduce manual work and keep data consistent. Standalone tools require manual synchronization.

Consider Ease of Use

Complex systems with powerful features often sit unused because they're too difficult for daily operations. Prioritize:

Simple data entry: Recording batches and receiving should take seconds, not minutes.

Mobile access: Can warehouse staff update from phones or tablets?

Clear visibility: Can you quickly answer "how much do we have?" without generating reports?

Reasonable setup: Getting started shouldn't require months of configuration.

Understand Total Cost

Pricing varies significantly:

Implementation, training, and data migration may add to initial costs. Cloud systems typically include updates; on-premise systems may charge separately.

Implementation Approach

Getting value from these systems requires proper implementation:

Start with Accurate Data

Garbage in, garbage out. Before going live: - Count everything and establish accurate starting quantities - Verify bills of materials match actual recipes - Confirm unit conversions are correct (kg vs. g, liters vs. ml) - Clean up duplicate or obsolete items

Begin with Core Processes

Don't try to use every feature immediately. Start with:

Week 1-2: Receiving — record all incoming items in the system

Week 3-4: Batch recording — log completed batches with consumption

Week 5-6: Reorder alerts — set minimum levels and respond to alerts

Later: Advanced features like lot tracking, cost analysis, and reporting

Train Everyone Involved

The system is only accurate if everyone uses it consistently. Train: - Receiving staff on recording deliveries - Workers on logging completed batches - Warehouse staff on adjustments and counts - Managers on reports and planning features

Maintain Ongoing Accuracy

Implement regular cycle counts to catch discrepancies. Investigate variances — they reveal process problems. Update bills of materials when recipes change.

Accuracy requires ongoing attention, not just initial setup.

How Krafte Handles This

Krafte provides these capabilities built for small manufacturers.

Complete tracking: Track all raw inputs with quantities, costs, locations, and supplier information. Know exactly what you have and where it is.

Bills of materials: Define recipes for every product, including multi-level BOMs with semi-finished goods. System calculates requirements based on your formulas.

Batch recording with auto-deduction: Record completed batches and inputs deduct automatically based on recipes. Finished goods add to stock. No manual adjustments.

Lot tracking: Record supplier lot numbers at receiving. Track which lots go into which batches. Full traceability for quality control and recalls.

Expiration management: Track shelf life for perishable items. System suggests oldest lots first (FIFO). Alerts before things expire.

Reorder alerts: Set minimum levels. Get notified when items need reordering.

Supplier connection: Purchase orders, receiving, and supplier tracking integrated. Items flow from PO through receiving into batches.

Cost tracking: Costs tracked through the entire process. Know your true product costs based on actual consumption.

Mobile-friendly: Access from any device. Record receiving and check stock levels from the warehouse floor.

The system handles what small manufacturers need without enterprise complexity.

Frequently Asked Questions

What is this type of software?

These systems track raw inputs, components, and supplies used in manufacturing. They differ from standard tools by supporting bills of materials, consumption tracking, lot traceability, and work-in-progress visibility.

Do I need special software for manufacturing?

If you make products from raw inputs, yes. Generic tools don't support bills of materials or consumption tracking. You'll spend significant time on manual calculations without manufacturing-specific features.

What's the difference between basic tracking and MRP?

Basic tools track quantities. MRP (Material Requirements Planning) adds manufacturing logic: bills of materials, scheduling, and requirements calculation. For manufacturers, MRP capabilities are essential.

How much does this cost?

Basic systems with BOM support start around $50/month. Full-featured solutions for small manufacturers typically run $100-300/month. Enterprise systems cost $500+ monthly plus implementation fees.

Can I start with spreadsheets?

Initially, yes. But spreadsheets become unmanageable as complexity grows. They can't automatically deduct items, track lots, or alert you to low stock. Most manufacturers outgrow spreadsheets within their first year of scaling.

What's the most important feature?

Bills of materials with automatic consumption. Without this, you're manually calculating and deducting for every batch — tedious and error-prone.

Tags: Inventory Management, Warehouse Management, Small Business