10 Ways ERP System Can Affect Supply Chain Management

In order to survive and stay in the growing competitive market, companies are expanding their limits ahead of its organizational skills and technologies.  Out of this those, supply chain management (SCM) and Enterprise resource planning (ERP) are two that are often heard. ERP Systems have gained immense popularity within SCM organizations.

The blog will explain to you how SCM can improve performance using an ERP system. To stay competitive, retailers should have a sound understanding of where their shipments are, how to rebalance inventories and respond quickly to new customer demands. Many times, a company may have multiple SCM systems at discrete locations, and all this needs to be integrated using an ERP solution.

Let us understand how an ERP system can affect supply chain management functions.

• Supply Chain Planning

Supply chain planning is a process of selecting proper marketing channels, promotion, and regulating the stock quantities and inventory required to ensure that production is able to keep up with the consumer demands.  ERP systems thus offer a trouble-free and ductile way to establish and change the limits within which the supply chain operates.

• Global Visibility

ERP software has always been known for the role-based or permission-based access to view the SCM data. The ERP allows manufacturers to know how and where the inventory is located throughout the chain management. This will allow the management of drafting a well-planned production. This means they have data at their disposal regarding the inventory levels, purchasing and production performance etc.

• Evaluate Vendor Performance

ERP systems make it easier for an organization to measure quantitative and qualitative factors of respective vendors. This helps the management in making better decisions and performance improvements in the current market. It helps the purchasing department to select the supplier or vendor and facilitate continual monitoring. Data of this kind can help to better negotiate at the time of switching vendors.

• Information Management and Integration

ERP is a natural extension and provides a comprehensive management system that integrates and manages your transactions and other important data in one single system. Many companies fail to cope up with the growing consumer demand due to discrete data which delays the supply chain functions. ERP system keeps all your data in one system with enterprise-wise visibility.

• Enhanced Collaboration

ERP systems help organizations to control all suppliers and distributors. This helps the managers to understand who is doing what operations at all the given times. ERP also bridges the gap between all the supply chain partners. Hence, it is possible for all the members of the organization to share vital information about demand, forecasting, production status and transportation plans in real time.

• Helps Decision Making

In the current business scenario, information is the key resource for any organization. If organizations do not have sufficient mechanism that gives them the power to make effective decisions then there are chances that their future will always be a mystery.  With the implementation of ERP, an organization will be able to function as a single entity that will improve the accuracy and integrity leading to a better decision-making process.

• Improved Supply Chain Network

ERP systems provide complete visibility throughout the supply chain network which isn’t possible in the manual processes.  By implementing ERP, an organization can monitor all the statuses and activities of suppliers, plants, warehouse and stores, and all other members involved in the supply chain. This, in turn, helps in effective tracking and monitoring process management.

• Decrease in Delays

Supply chains who did not implement an ERP already placed complaints about poor business relationships with the loss of business. Many factors have negative impacts on businesses and therefore results in negative impact with the customers who are the main force of attraction for a supply chain. With the implementation of ERP, all the activities can be co-ordinated and executed ensuring higher levels of on-time delivery across the chain.

• Manage Risk and Prevent Fraud

An intelligent ERP system not only prevents fraud and theft but also helps ensure compliance with legal requirements and rules. A traditional ERP system facilitates user-based roles to access and modify data that prevents theft.

• Automates Customer Service Process.

Enterprise resource planning comes to help too many organizations that look forward to streamlining their customer service experience. ERP’s streamline customer service experience that allows employees ensure that their customers are getting a consistent experience and the back office process is not interrupted.  Automation of all other resources helps organizations to respond to customers quickly and forecast new products.

Conclusion

By now you must be aware of the benefits of incorporating an ERP system to any sector of your supply chain management business. Obviously, a question will surface in your mind regarding which ERP to trust. Not to worry. Probytes has one of the best solutions out there in the market for you. Feel free to contact us to know more.