ERP stands for enterprise resource planning. In companies, the term “enterprise” is often used to describe business processes that encompass all departments or elements of the business. Thus, enterprise resource planning means that all parts of the company collaborate in the process of acquiring and managing efficient resource use.
The primary motive of ERP is to avoid redundancies or duplication of resources across the organization. Historically, company leaders would allocate budgets to each department. Managers in respective departments would apply budgets to acquire necessary resources for their workers. With ERP, centralized leaders and software tools are used to manage an enterprise-wide resource budget. This approach ensures that you avoid wasted resources or costly returns.
The valuable role of ERP in supply chain management can’t be stressed enough. ERP software has had a dramatic impact on the way businesses are able to operate, with a direct correlation to business growth. Effective ERP and supply chain management are critical ingredients to business expansion and success. When sourced from supply chain experts like QAD, these systems consolidate supply chain operations under a single dashboard, providing visibility and more streamlined coordination with suppliers and vendors. Manufacturing ERP software can also automate supply chain processes so that employees can be more productive in other areas.
Benefits of Using ERP in a Supply Chain Management Strategy
Reliable Processing & Documentation
An ERP system can also create invoices, which are sent straight to the customer once products have shipped. Or, create and transmit required import and export documentation required for cross-border shipments. It automatically collects an archive of shipment and delivery data as well to reduce errors and ensure on-time delivery and better customer service.
Efficient Managing Demand & Procurement
ERP automates demand planning, creating demand upon receiving orders. When an order is received, the software implements scheduling. Team members are able to see real-time information about how resources are being used in production and can better plan production jobs and product delivery. Warehouse resource management, transportation of materials, and other supply chain tasks can be automated or optimized to improve efficiency as well.
Efficient Managing Demand & Procurement
ERP automates demand planning, creating demand upon receiving orders. When an order is received, the software implements scheduling. Team members are able to see real-time information about how resources are being used in production and can better plan production jobs and product delivery. Warehouse resource management, transportation of materials, and other supply chain tasks can be automated or optimized to improve efficiency as well.
Cloud Capabilities
Though ERP systems are available as on-premise solutions, cloud ERP software has become popular in recent years. The major benefits of cloud ERP are dedicated data security and mobility. Using a cloud-hosted ERP solution means that the system can be accessed anywhere, anytime on mobile devices as long as there’s an internet connection. This allows for quicker action without the need for team members to be together, which can be valuable with the fast-moving aspects of supply chains.
Increased Visibility
With more visibility and transparency, businesses can create smarter strategies around how they use their resources, from parts to personnel. ERP software can give your team a detailed, real-time look into your operations so you can see where things are going well and where they’re not, allowing you to target specific inefficiencies for better outcomes.
Benefits in Business:
- Reduce production bottlenecks: ERP for supply chain significantly reduces the bottlenecks between internal processes and external suppliers. Modern solution helps in handling proper procurement and supply of the goods, services and other resources that are needed across the supply chain.
- Effective demand Forecasting and Lean inventory: An ERP solution in SCM improves the accuracy of demand forecasting and ensures that the cost of inventory is minimized in case of large-batch production process. A lean inventory is essential to address just-in-time production method to reduce the cost of production and keep supply chain flexible.
- Transparency through the business: The consolidated view of the supply chain enables the business executive make more informed and balanced decisions with ERP for supply chain.