How Does ERP Help Supply Chain Management?

Businesses rely on suppliers and vendors to provide the materials needed to manufacture and deliver goods to customers. However, supply chains become increasingly complicated with growth and change. Instead of a profit source, supply chains can become a profit drain. Modern technology, specifically enterprise resource planning (ERP) solutions, can provide support. So, how does ERP help supply chain management?

Tame Complicated Supply Chains

Supply chains tend to grow complicated over time, making these relationships difficult to manage with spreadsheets or other specialty software. Weaknesses in the supply chain can wreak havoc on the ability to deliver goods to market or direct to customers. Inefficiency with managing these relationships and with managing inventory can quickly halt production and take a toll on profit margins. Wasteful practices or poor inventory control puts a burden on productivity, as well as the bottom line.

Today’s ERP offers an innovative, agile way to manage your supply chain and other business operations. By incorporating supply chain management within ERP, businesses gain a number of advantages, including a stronger supply chain. Here are three ways ERP will support supply chain management:

1. Planning: Successful businesses look far into the future to anticipate market trends, customer needs and production schedules. Forecasting accurately requires more data than just customer sales orders. ERP captures data from across your organization. You can evaluate key metrics from marketing campaigns and promotions, analyze trending customer and marketplace data, then forecast inventory needs accordingly.
2. Procurement: Not only do you need the right inventory at the right time, with ERP, you can turn inventory into a profit center. Use planning and forecasting data to your advantage to make strategic procurement decisions. Take advantage of buying early or in bulk to get better prices on raw materials from your suppliers. Make strategic purchasing decisions before marketplace conditions raise the cost of raw materials.
3. Measurement: The keystone to today’s ERP systems includes a combination of real-time data and business intelligence features. Armed with reliable, current data, you can measure and monitor key performance indicators, identify trends and respond faster to deviations. By keeping a close eye on sales, inventory movement and production, you will be able to measure real business activity next to strategic goals to ensure inventory and supply chain plans stay on the right track.

Gain Control and Insight Over Your Supply Chain with Technology

Specialty software, spreadsheets and regular meetings with suppliers aren’t enough to gain the control and insight needed to turn a complicated supply chain into a competitive advantage. Replace inefficient processes with more reliable technology and integrate supply chain management into ERP. Contact The Wolcott Group with any questions.