In today’s global economy, supply chain management (SCM) has become absolutely crucial to ensuring the uninterrupted flow of goods between vendors, businesses and consumers—particularly where logistics and manufacturing are concerned.
In manufacturing terms, the involvement of numerous third-party suppliers, each responsible for providing goods on time and in the right quantities, means accurate and efficient SCM processes are essential. Yet, a recent State of Manufacturing Report cites that as much as 97% of respondents feel supply chain management is a massive burden on their time. With increased scale and the expectation of super-rapid deliveries, manufacturing warehouse operations have become vastly more complex and so have supply chains; comprising manufacturers themselves, suppliers, logistics partners and retailers. And so, the role of ERP in supply chain management has become ever more important.
Today's businesses often partner with logistics software development vendors to build and implement custom ERP (Enterprise Resource Planning) solutions. With ERP software, enterprises can gain a real-time view of all of their business processes from a single easy-to-use dashboard, while automating many supply chain management steps to optimise their efficiency.
There are a plethora of use cases for ERP in supply chain management, but we’ve given a breakdown of a few of the benefits, plus what to look for when considering ERP solutions, below.
4 Key benefits of ERP in supply chain management
1. Streamlining demand planning and procurement
ERP software gives businesses a single view of their operations and can automate a chunk of their day-to-day processes, including demand planning. In doing so, demand can be created upon the receipt of orders, which not only ensures the leanest and most efficient use of raw materials and resources at any given time, but it also allows for more accurate job and delivery planning based on real-time data analysis. ERP is especially beneficial for procurement in custom manufacturing scenarios, where there isn’t a consistent supply of materials needed for production and ordering can be more complicated—often with longer lead times. With ERP for supply chain management in place, other key tasks like transportation of raw materials can be automated for improved efficiency.
2. Automating document processing
Keeping paperwork up to date and accurate can be a laborious and time-consuming task, but it’s nevertheless an essential part of business operations. ERP software solutions for business can automate things like invoicing, so that invoice documents can be automatically sent out to customers with no manual intervention required. ERP software can also handle import and export documents to facilitate international shipments, archiving data while mitigating human error and providing a better all-round service to customers.
3. Smoothing third-party collaboration
Since a supply chain is made of multiple links, optimising the interaction between them can vastly improve the whole chain and ensure smooth deliveries and happy end customers. Integrating ERP software with supply chain management helps streamline communication between various vendors in the chain by connecting them through one centralised ERP system. This optimises efficiency by reducing bottlenecks in workflow and automating inventories so that materials are always in stock. ERPs also allow businesses to gain an overview of vendor performance, and to compare prospective vendors so that they know they’re making competitive decisions.
4. Boosting customer satisfaction
ERP solutions help supply chains maintain a consistent flow of goods and meet their expected service levels, which benefits the end customer and builds consumer satisfaction. ERP software gives businesses a comprehensive real-time overview of end-to-end operations, which allows them to spot potential pain points and make the necessary adjustments to improve services. This improved level of operational visibility also means that companies can make and keep service promises based on facts, rather than pre-defined best-practice SLAs.
