How ERP Can Improve Supply Chain Management and Increase ROI

Well planned and efficient movement of goods will determine the profitability of the business and companies across the world have understood the importance of implementing ERP to optimize SCM. 

According to a recent global survey, the revenue for supply chain management software is estimated to be around USD 17306M in 2021. ERP for supply chain management is expected to grow at a CAGR of 6.52% from 2021 to 2026. ERP software industry itself is expected to grow at a rapid pace and the worldwide revenue is projected to be 78.4 billion dollars by 2026. 

The Role of ERP in Supply Chain Management

Some of the valuable role ERP plays in supply chain management, an important part of the overall success of a manufacturing business are:-

 

Strategic Demand Management

 Inventory management is one of the core features of SCM that helps the smooth functioning of the business. ERP comes with a demand monitoring module that automates stock management. It also provides current market trend demand to help the company plan replenishment orders. Automatic management of stock levels and generate purchase orders when the threshold limit is reached.

 

Product Distribution

When the ERP system is integrated with the SCM, it will take care of the smooth distribution of products from the inventory to various departments. It helps the business to maintain a centralized customer shipping database that will enable guaranteed dispatch of shipments as per schedule.

Risk Management

SCM is a dynamic industry where disruptions due to various external factors are quite common. Such disruptions can lead to delays and possible order cancellations. 

ERP for SCM will significantly predict the risks upfront and provide a cushion for the business to handle such uncertainties better. Since everything is digitally connected, ERP can trigger alerts of possible disruptions in the near future. After the complete disruption of the Covid-19 pandemic, industrial enquiries for ERP software increased by 278% in 2020.

Cost Reduction

When ERP is implemented on an enterprise-level system, it automates a lot of functionalities that are otherwise largely unorganized. This enables the business to save a lot of money since there is no need to train employees of departments separately. Additionally, ERP for SCM will increase the efficiency of order management systems and deduct flaws in the existing system. Over a period of time, ERP for supply chain management will help the business to reduce the operating cost significantly.

 

Secure Data Sharing and Availability

 ERP facilitates employees across the enterprise to upload or edit critical data with key personnel in the hierarchy. This helps them to make timely decisions based on the available data. This largely improves the quality of deliverables and also overall communication between the resources.

 

Improve Productivity

 When ERP is first implemented in a company, it is quite natural that their employees might find it complex at first, but eventually, they will get the pulse of it. With proper training, the attitude of employees toward the task will increase significantly leading to improved productivity. ERP for SCM will largely reduce or automate repetitive tasks and free up resources for more productive tasks. 

 

Superior SCM Visibility

Any company, whether small or large, if they deal with shipping, then ERP will provide a wide level of visibility for their supply chain management. A properly implemented ERP will provide insights into their supply chain and inventories that enable the management team to make educated decisions to stay ahead of their competition. Most of the problems arising out of the supply chain can be easily identified and notified to the respective team for a quick resolution.

 

Customer Satisfaction

Successful businesses have made it their habit to keep their customers happy throughout the lifecycle. With ERP for SCM, customers can easily track their shipments in real-time by logging into the system. ERP also provides a CRM that enables the customers to access all their order history and contact the support team.

Business Intelligence

Most of the companies have understood the importance of business intelligence in recent years. An ERP for SCM will provide data analytics that will enable businesses to analyze and make informed business decisions. Once ERP is implemented, data is collected at various points and stored efficiently for analysis.

Regulatory Compliance

An ERP provides a well-connected interface where every phase of the supply chain is recorded digitally and made available as and when required. This will help businesses with a critical feature namely traceability which comes in handy during a legal investigation. ERP will ensure that all the aspects of SCM operate well within the legal framework.

 

Efficient Analytics and Accounting

When a supply chain system is connected with an ERP, it enables a consolidated system of accounting of transactions across departments. All the transactions in the supply chain lifecycle are digitally stored in the ERP for easy access and accounting. 

 

The Bottom Line:

Now is the time to enhance and improve your supply chain management through the implementation of an ERP system. Manufacturers are now focusing less on cost savings and more on supply chain adaptability, and risk management, with the goal of creating flexible sourcing and more connected supply chain networks to respond to their customers’ needs.

Organizations looking to purchase an ERP system have the option of purchasing an all-in-one software package or building a “tech stack” of separate products from different tech providers that can integrate with each other.

TAFF has been a pioneer in ERP implementation over 20+ years and has helped businesses to automate their operations. We can increase the ROI of your businesses by optimizing your supply chain system with a customized ERP Solution. Contact us today to know more.

 

• Benefits of ERP in supply chain management
• ERP for Supply Chain Management
• ERP Solutions