6 Benefits ERP Can Bring To Your Supply Chain Management Performance
Supply chain management (SCM) "in commerce is defined as the management of the flow of goods and services, involves the movement and storage of raw materials, of work-in-process inventory, and of finished interest as well as an end to end order fulfillment from the point of origin to the point of consumption" (1. According to Wikipedia). Supply chain management is considered a vital backbone of manufacturing. That being said, ERP software holds a critical role in SCM and has become widely available in business enterprises. A research published on Emerald Insight reveals the positive and significant relationship between ERP systems with SCM performance.
This article will explore how successful implementation and effective ERP software usage can make a positive impact on enhancing SCM performance. Below are the six significant ways ERP can benefit your supply chain management performance.
The inventory tracking system is one of the unique selling points of the ERP software. By having a comprehensive inventory management system, businesses can proactively control and manage their inventory or product stock. With integrated SCM/ERP, business enterprises have full control over their list; they can organize and classify the inventory, manage detailed warehouse data, and record different products’ movements.
This gives supply chain managers a better understanding of what inventory is on hand, what has been shipped out, what has not, and where the stock is at all times.
Because the ERP system acts as a one-stop-shop for all of your business tracking needs, having an ERP system in hand can provide an overview of the entire supply chain that enables key decision-makers to make smarter decisions about ordering and purchasing.
By providing manufacturers with information on how and where inventories are located throughout the supply chain, the system helps generate greater confidence so that sales reps can talk to their customers about their orders. Additionally, managers and senior executives will have a better overview of every part of the supply chain, they can identify problems and solutions faster.
Materials Requirement Planning
Material Requirement Planning (MRP) refers to the inventory planning, scheduling, and control system for managing manufacturing processes. The ERP system is considered an extension of MRP, and integrating the SCM module into your ERP system can make the MRP function more powerful.
An integrated SCM/ERP provides this comprehensive management system that enables the integration of transactions, materials planning, and other functions into a single system.
ERP systems facilitate businesses to measure the quantitative and qualitative factors of their respective suppliers via metrics like cycle time, costs, bottlenecks, error rates, and more. Therefore, it helps you make more informed and smarter business decisions and improves performance in the current market.
Risk and Fraud Prevention
An ERP system can prevent fraud and theft by providing you with full visibility of activities and facilitating user-based roles to access and modify data. It also makes sure every user complies with legal requirements and regulations. An integrated SCM/ERP can also increase your supply chain’s flexibility, easily linking critical information with other business applications, leading to increased integration and reduced costs.
Manual reporting always carries the risk of less frequency due to the labor-intensive and process needed to collect data. Resulting in poor decisions being made as they are made based on outdated and/or inaccurate information. However, when you move to an integrated SCM/ERP system, you will have access to relevant data about the company and the supply chain’s performance. As a result, key decision-makers are able to better track the movement of products stock or inventory, and the ability to utilize this optimized data to improve operational efficiency.
How TP&P Technology Can Help You
There is no doubt why ERP is now considered the backbone of any e-businesses, it not only helps establish best business practices and bring transparency to the organization but also is essential for the decision making process.
If you need to know more about the capabilities of an ERP solution, TP&P Technology is one of your trustworthy Odoo Partners. Contact us now to talk with our experts.