What role does ERP play in a supply chain management strategy?
The integration of Supply chain management and ERP allows manufacturing and distribution businesses the ability to gain greater visibility into all operations while increasing speed, efficiency and overall customer satisfaction.
A growing number of businesses recognize the many potential benefits of Enterprise Resource Planning (ERP) when it comes to managing business information, integrating various systems and working processes, and ensuring optimal operational efficiency.
When it comes to Supply Chain Management (SCM), businesses need to interact with numerous suppliers and partners in order to obtain the raw materials and resources needed to bring finished goods to market. ERP plays a vital role in combating inefficiency; reducing waste and ensuring that workers are better able direct their efforts. The integration of both systems may pose some unique challenges. It is in your company’s best interest to ensure that you and your staff fully understand the role of ERP within the SCM process.
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Benefits of Combining Supply Chain Management and ERP Systems
The feature-rich working environment of ERP combined with the more streamlined and efficient workflow of an effective SCM can provide a range of important advantages, including:
- Improved efficiency across multiple departments and organizations working within the supply chain
- Improved customer service for increased customer retention and greater chance of repeat business opportunities
- Automation of workflow for reduced overhead and operational costs
- IT issues and problems that are less likely to create bottlenecks to impede efficiency
- More flexible supply chain solutions that may be readily adapted to meet the needs of changing circumstances or future business growth and expansion
Utilize ERP Systems to Ensure Superior Supply Chain Management
A Supply Chain Management system is essential for accessing real-time operational information across multiple departments and businesses. Lacking clear insight into the various activities and working processes that constitute your supply chain can leave you unable to create procedures that offer a sustainable competitive advantage. ERP systems play a key role in several aspects of the creation and maintenance of a superior Supply Chain Management process, which may include:
1. Supply Chain Planning
Supply chain planning includes the selection of marketing channels, promotions, determining the quantities of stock and inventory required and ensuring replenishment and production policies are able to keep up with demand. ERP systems offer an easier and more flexible way to establish and alter the parameters within which a supply chain is required to operate.
2. Purchasing, Procurement and Execution
Feature-rich ERP software applications provide a more effective way to handle procurement and supply of the goods, services and other resources that are needed across the supply chain. From manufacturing and warehouse resources to transportation and execution processes, ERP systems offer cross-platform visibility on all aspects of the supply chain.
3. Monitoring and Maintenance
The ability to monitor, review and alter supply chain efforts and activities in real-time is essential for ensuring your business is able to maintain the flexibility needed to stay competitive and ensure cost-effective operations.
4. Measurement and Assessment
Comparing actual activity against projected goals and targets can be all but impossible for those who rely upon a supply chain that utilizes multiple stand-alone systems and workflow processes. ERP systems offer superior information aggregation and organization to ensure that any undesirable variances throughout the supply chain are quickly identified and effectively addressed.
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Choose the Best ERP and Supply Chain Implementation Strategy
For organizations that have already implemented an ERP system, the collected information and macro-view of the organization’s existing workflow and processes may be used in order to construct a more effective and efficient SCM process. Businesses that already utilize multiple stand-alone supply chain management systems stand to benefit from the integration and implementation of an ERP system that offers cross-platform access to the inventory, financial and manufacturing information needed to design a SCM process that will offer superior performance. There are no hard and fast rules when it comes to determining which system to implement first and the specific needs and circumstances of your business must be weighed and considered carefully before you reach a decision.
ERP Systems Offer Superior Supply Chain Solutions
The inter-departmental and multi-organizational nature of supply chains makes effective management very difficult for businesses that lack the right resources. ERP systems are a crucial asset in the creation and implementation of a more efficient supply chain process.
An inefficiently managed or outdated supply chain process is a liability that no business can afford to overlook. The integration of SCM an ERP means that you can deliver your products and services to end-line consumers with greater speed, efficiency and overall quality.