Role of ERP in Supply Chain Management

Oct 1, 2019
Nandinee Biswas
Role of ERP in Supply Chain Management Role of ERP in Supply Chain Management

What is ERP in Supply Chain Management?

Supply chain rules are changing only to become more complex. Fast-track change in customers’ behavior, fluctuating demand, shorter product lifecycle, and new regulatory compliances are crippling the competency of traditional supply chains.

The introduction of ERP (enterprise resource planning) systems and artificial intelligence usher the scope for a dramatic transition. The new technology offers concrete support to the business operations and draws an end to all supply chain chaos. The crucial role played by ERP in supply chain management to run businesses with innovation, security, and agility that modern markets require

"Supply Chain automation using emerging technologies such as IoT and artificial intelligence will drive efficiency like we have never seen before. "

- Dave Waters

What are the Supply Chain Management Challenges?

The financial health of companies across the industry largely depends on the efficiency of the supply chain. This indicates the importance of supply chain and its management in the success of these businesses.

Further, malformations in the supply chain have the potential to disturb the businesses dependent on it. Here are some sobering supply chain challenges that can strongly influence in the demise of many companies.

Rapid changing market demands

Nowadays, customer demands change at a very high pace, which is one of the most profound reasons for the dramatic shrinkage of product life cycles. The shift in preference imposes pressure on the enterprises to keep up with the latest trends and replace available products with new ones that have innovative and advanced features.

This change in the environment requires to design an agile supply chain that can respond swiftly to spikes and dips in demand needs for accommodating product replacement. An efficient tracking system is a key to success here and in the absence of this, the whole supply chain would fail.

ERP systems enhance the efficiency of the overall operations. This improves the process accuracy, encourages teamwork, and reduces mistakes due to miscommunication.

Unforeseen transit delays

With numerous environmental factors impacting the transit, products or raw materials are not always delivered on time. Arranging delivery schedules before the actual time or maintaining buffer stocks are proven ways for responding to the potential supply chain disruptions.

This distinct advantage can be attained only with an appropriate monitoring mechanism. Again, the goods in pre-deliver or buffer stocks, when left unattended for long lose their value and so despite being stored in the warehouse, businesses would not be able to make them available to their customers. This brings negative impact on customer experience and even the profitability of the firm.

Supplier relationship

Modern supply chain business requires working with multiple suppliers or vendors. Maintaining a harmonious relationship with them not only helps to better manage the increasing growing complexities in these networks but also enables supply chain businesses to provide high standards of service to the customers on time.

On the contrary, inconsistency in supplier relationship often gives rise to ineffective communication, late notification, delays or cancellation of delivery, and other underlying weakness of the sector that can bring loss to any supply chain business.

Benefits of erp in supply chain management

What are the Key Benefits of ERP in Supply Chain Management?

A supply chain network performs its best when all its departments and operations function efficiently. Complete visibility into the exercises and working procedures also supports organizations to craft strategies that provide a feasible upper hand to productivity.

When ERP systems used in supply chain management, they make planning, monitoring, and control intense yet effortless. Let's find out the key advantages of ERP in supply chain businesses.

Simplify process monitoring and management

ERP in supply chain management offers to monitor and track activities across the channels in real-time, from a single platform. This improves information sharing, boosts interdepartmental communication, and minimizes the delay in decision making. Together, rendering power to your business to act appropriately and stay competitive.

The health of a supply chain largely depends on the information accuracy and promptness. ERP software allows users to access real-time data and reports, making managing it much easier.

Accurate and detailed order tracking

Every order is crucial and delivering them on time is the secret to supply chain business growth.

Implementing ERP software for supply chain enables you automatically record and store every minute information related to orders. This helps you to perfectly track old orders that are in transit as well as keep an eye on the new ones that are yet to be processed. This meticulousness detailing further aids in analyzing the customers’ needs in the future and enhance their experience.

Insightful computation and estimation

ERP systems accommodate a huge volume of real-time data, which you can use to generate insightful reports. This provides greater clarity about the operations and makes predicting market demands much easier.

Moreover, an in-depth monitoring structure also facilitates identifying the undesirable variances in the supply chain quickly and adequately addresses the problems.

Easy handling of supplies

ERP software includes advanced features to enable error-free tracking and managing inventory. This efficiency in managing supplies removes order fulfillment mistakes and reduces overhead costs, thereby increasing the turnover of the business.

Inventory is one of the most critical parts of a supply chain. Proper management of it can decrease the operational cost as well as increase the turnover of the business.

Impact of ERP on supply chain management is evident. The growing business complexities have made these systems a crucial part of supply chain organizations. Focus Softnet understands this implication and designs ERP solutions that can address every supply chain business intricacy.

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