The past couple of years have been extraordinary. The impact of the global pandemic, Brexit in the UK, component shortages and global instabilities continue to cause supply chain volatility. These supply chain disruptions have resulted in the need for highly agile organisations that are pivoting investment into technology that supports their supply chains to be more responsive to ever-changing market needs.
In fact, according to the 2021 Gartner Future of Supply Chain Survey, as many as 43% of enterprises will take steps to integrate innovative technologies into their systems.
The supply chain is more than just managing inventory. What parts of this complex process spring to mind when you think about your supply chain? Are you thinking about procurement and manufacturing, or do you imagine warehousing and logistics? Are you thinking about how an Enterprise Resource Planning (ERP) system can support your supply chain management strategy or provide a competitive edge in a challenging market?
More likely, you’re thinking about all of these and how they can support your production plan. Why? Because the supply chain is full of a lot of moving parts – all of which may impact one another simultaneously. Understanding your supply chain is tricky but understanding how it impacts your manufacturing organisation is even tougher.
5 ways ERP revolutionises supply chain management
There is no doubt that the investment in technology to build resilience into supply chains is a major priority for businesses today and will be in the coming years. There are many technologies out there that help manage supply chains, and an ERP system is one of them. Below are five ways an ERP system revolutionises supply chain management.
1. Automate purchasing processes
Keeping a tight track of inventory is important to avoid excessive or limited stocks, however, monitoring is quite time-consuming. An advanced ERP system with supply chain management functionality can automate this process. For instance, users can get notifications whenever inventory levels drop below a certain level. This helps you stay informed about the need to refill the stock and accordingly place orders with vendors.
2. Greater data insight
The health of a supply chain greatly depends on accurate and timely information. An ERP system accommodates a huge amount of real-time data related to inventory, buying, selling, manufacturing, financial accounting, and other core business functions. The software also allows users access to reporting resulting in greater insight into the operations, which makes managing supply demands much easier.
3. Real-time inventory management
Inventory is a critical part of any supply chain establishment. Proper management of it can decrease the cost at the same time increase the turnover of the business.
In the traditional method, inventory is captured using spreadsheets and hand-checked lists. This method is prone to human-based errors and does not provide real-time or up-to-date data.
On the other hand, modern ERP software includes features that enable real-time visibility of exact inventory levels. As a result, the supply chain operates at an optimal with reduced overhead costs and order fulfilment communication mistakes.
4. Raise cost awareness
There are variable costs that are incurred in every stage of a supply chain. Intelligent ERP systems, by harnessing supply and demand data, can provide more realistic cost projections. This prompts cost awareness among the managers, which enables them to pinpoint and reduce the uncontrollable factors incurring additional expenses, improve optimisation in the processes and reduce operational costs.
5. Increase transparency
Implementing an ERP solution enables management to have a consolidated view of every part of supply chain operations. It provides accurate, relevant and up-to-date information about things like shipments in transit, where it is and when they will reach the warehouse. Also, the employees in the stores and the warehouse can have role-based access to this knowledge so that consistent and accurate information is shared with all relevant people across the entire organisation.
Check out our guide ‘Solving supply chain woes‘ to discover many more ways an ERP system supports supply chain management .