Why Your Business Should Consider ERP Solutions for Supply Chain Management?
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7/30/2019
Why Your Business Should Consider ERP Solutions for Supply Chain Management?
Streamlining supply chain management is integral to enhancing
productivity, and many organisations are adopting Enterprise Resource
Planning (ERP) software as a way to achieve this goal.
Getting to know the terminology
What is Supply Chain Management?
Supply chain management (SCM)
is essentially the management of all activities related to the supply
chain – sourcing, designing, manufacturing, storing, packaging,
transporting, and so on – from point of origin to point of purchase,
effectively to enhance customer value. By actively managing every aspect
of the supply chain, you are better positioning yourself to gain a
competitive edge by ensuring everything runs smoothly and productivity
is boosted. One way companies are enhancing supply chain management is
through the application of Enterprise Resource Planning (ERP) software.
What is ERP?
A vital tool for an effectively-run supply chain is an information system that coordinates these activities.
Enterprise Resource Planning (ERP)
software is one of the most popular supply chain management solutions
available. ERP effectively manages all business information, integrates
the various systems and ensures efficiency from start to finish. The ERP
solution adds value to the supply chain system by overseeing the
physical aspects of the supply chain, as well as coordinating
information from material procurement to product delivery. Everything
from taking customer orders and scheduling operations to recording
inventory and financial data is integrated by an ERP system, benefitting
overall business performance.
The role of ERP in supply chain management
The
fully-integrated ERP software will positively impact several aspects
related to supply chain management within any business. Some of the roles of ERP software include:
- Job scheduling and planning:
ERP systems in supply chain management can automatically generate
orders when received and schedule jobs which assists in planning for
product deliveries. ERP will also ensure the inventory is replenished
when needed and production policies are in line with the demand.
- Managing procurement:
ERP systems can take care of everything from handling warehouse
resources to transportation and delivery. Communication with vendors can
also be automated through an ERP solution.
- Maintaining records and updating orders:
ERP software can create a bill of material for all items, record
resources and shipping documents and update with any last-minute
changes. This eliminates any ‘human error’ for faster production.
- Packaging and invoicing:
ERP systems can assist in packaging methods and quality checks, as well
as maintaining data for customer shipments and sending out of invoices.
Benefits of ERP for your business
If you’re
looking for an effective supply chain management solution for your
business, then ERP is undoubtedly a great option. Here are a few reasons
how ERP software can benefit your business:
- Streamlining: By automating your business processes, you can centralise all of your data and monitor your day-to-day options in real-time.
- Supply chain optimisation:
A benefit of the aforementioned streamlining is the overview of your
supply chain. You can pick up areas where the supply chain can be
improved quickly.
- Consolidation: With an ERP solution, you only need one system to operate various departments, which again, enhances the flow of your systems.
- Transparency:
The ERP solution allows you to trace stock as well as any defected
batches which allows for preventative maintenance. This is important in
intensely-regulated industries.
- Flexibility: No
business owner can accurately project business growth, but with an ERP
system, that’s not an issue. As the business grows, the system will
adapt to cater for changing needs.
- Mobility: Through
cloud-based ERP or mobile ERP, you can monitor your supply chain system
from wherever you are located. No need for on-site checks.
- Specification: You
can opt for an industry-built ERP solution which is specified to the
needs of your industry. This allows you to update according to industry
requirements, keeping you competitive.
- Real-time data analysis:
Rather than having to wait for an analysis of your business, you have
access to real-time reports using ERP data analysis. This means you can
make quick, informed business decisions.
- Enhanced customer relations:
Effective supply chain management requires meeting consumers’ needs.
With an ERP solution, you have more accurate information, a lower chance
of error, and on-time delivery leaving customers satisfied.
- Boost the bottom line:
All the aforementioned benefits of ERP solutions result in one thing – a
healthier profit. By lowering your administrative and operational
costs, minimising error, and reducing waste, you are going to see
improved productivity overall.
What to consider when choosing an ERP provider
There
are numerous ERP software options available and several providers who
can assist with implementation in anything from a small enterprise to
big corporates. Choosing the right ERP provider takes some
consideration, so here are a few things to query:
- Past clients:
An experienced company will be able to supply you with examples of
satisfied clients and boasts a strong track record in the industry.
- Specialisation:
ERP solutions differ from one industry to the next so you need to check
that the provider is a specialist within your particular industry.
- Support and training:
The provision of ERP solutions requires ongoing training and support.
Your ERP provider should be able to offer training in the ERP software
used by all employees, as well as being on-hand to assist if there is a
query – particularly in the early stages.
- Follow-up training:
Software will continue to update and, if your staff is not kept abreast
of new features or reminded of how they could be optimising the
existing ERP solution, you are not getting your money’s worth. The
supplier must keep you abreast of any new information and be willing to
give a refresher if needed.
- Flexibility: The
Internet of Things (IoT) and Artificial Intelligence (AI) are going to
develop – quickly – which means your ERP provider must be able to adapt
and ensure your ERP solution constantly embraces emerging technologies.
Businesses
that are looking to remain relevant in an increasingly digitised world
cannot overlook the inherent advantages of ERP software to supply chain
management. The benefits related to automation, integration and improved
efficiency are prompting the move towards ERP solutions. Just remember
some form of customisation might be needed to ensure the ERP software is
suited to your unique business needs.
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