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Home ERP for Supply Chain Management (SCM)

ERP for Supply Chain Management (SCM)



In this post, we will cover ERP for supply chain management that helps the SCM department, As we all know and have earlier discussed that ERP systems are also known as Enterprise resource planning software or business software that helps organizations and businesses in many ways. Implementing ERP software for business helps to enhance the operational efficiency in all the departments, and for the manufacturing industry, ERP software has become an important business component.

Role of ERP in supply chain management strategy?

The integration of ERP for Supply chain management allows distribution businesses and manufacturing to enhance the ability by gaining great visibility in all respective operations while increasing speed, efficiency, and focus on customer satisfaction.

Role of ERP in supply chain management strategy SCM

There are various ways ERP software offers advantages to companies involved in the production of a good, taking an example ERP systems helps the decision-maker to monitor different departments including employees working on shop floors in real-time. The data generated by ERP software helps the managers to understand the needs and requirements in the business and similarly improvise their daily tasks by increasing company output with more efficiency.

 Supply Chain Management (SCM) highlights the businesses need to interact with various suppliers and partners in order to obtain the raw materials, subcontracting, and resources needed to guide finished goods to market. An ERP plays a crucial role in counter inefficiency, reducing waste, and ensuring that workers are better able to direct their efforts. 

Benefits & Advantages of Combining SCM (Supply Chain Management) and ERP (Enterprise Resource Planning) Systems.

Benefits of Combining SCM (Supply Chain Management) and ERP (Enterprise Resource Planning) Systems.

Enterprise Resource Planning and Supply chain management is an integral part of any ERP solution that you implement for your business. In the manufacturing industry, there is the need to interact with suppliers regarding the raw materials and resources needed to ensure the finished product reaches the consumer. This entire process involves supply chain strategies that serve to enhance product quality and overall service.

As business operations become more wide range as per the scalability, global supply chain management becomes indispensable, and ERP can be incorporated to support multiple modes, streamlining the movement of products from supplier to the warehouse and then to the customer. Many organizations are finding enhanced operations by choosing ERP solutions for the supply chain management. These benefits include:

The ERP SCM combined with the more streamlined and efficient workflow of an effective SCM can provide a range of important advantages as follows:

  1. Working within the supply chain, efficiency across multiple departments and organizations get improved
  2. Improved customer service for increased customer retention and a higher chance of repeat business opportunities
  3. It reduces the overhead and operational costs by Automating the Workflow.
  4. IT issues and problems that are Probably less which overcome by bottlenecks to hamper efficiency
  5. More flexible supply chain solutions that may be immediately adapted to meet the needs of changing conditions or future business growth and expansion
  6. Effective demand forecasting and lean inventory, A lean inventory is essential to address just-in-time production methods to reduce the cost of production and keep the supply chain flexible.
  7. Optimization in IT & Training Costs, As the adoption of ERP software, allows the company to get hands-on information through a common software platform, this could be the best return on investment to justify the business costs.
  8. Complete Visibility of Process Flow, The user-friendly interface makes it easy to identify the process flows.
  9. To improve customer service and enhance customer retention chances
  10. Multiple Department improvements in the efficiency across every stage of Supply Chain
  11. Workflow Automation to speedup of transactions
  12. Reduction overheads and operational costs
  13. The potential for the resolution of IT issues
  14. As per the Market Demand, it should be flexible to change the solution as per the supply chain
  15. As per the business, expansion Accounting has to be Scalable

Read our Article – How ERP software helps in Quick Decision making

One of the most important business departments in the manufacturing process is to manage your supply chain, Organizations that produce finished goods and products needs to have certain components ready which is also called as Bill of Materials to assemble the final product and related task. Although if these bill of materials or manufacturing components are not available in hand when needed may cause delays and have a negative impact on the business. With the help of an ERP system in place, the problems of shortage in Raw materials or bill of materials can be reduced.

Read our article – HOW TO MANAGE YOUR RESOURCE IN BETTER WAY WITH ERP SOFTWARE

Role of ERP in sustainable supply chainRole of ERP in sustainable supply chain

One of the most important issues with supply chain management is materials management. In order to ensure a sustainable supply chain management system decision makers needs to implement a powerful ERP software in place that can handle current inventory levels including the new purchases and accounts payable activities with suppliers.  Implementing an ERP system allows the organization’s department to keep every single piece of information handy which ultimately increases efficiency.

Read our Article – HOW CONSULTANTS HELP SUCCESSFUL ERP IMPLEMENTATION

Apart from the inventory ERP software also helps manufacturing business to plan their production activities. ERP system helps to ascertain the crucial materials which are not in stock or stocks which can replenish soon. With this information in hand, businesses can schedule buying of materials with quick decision making.

ERP system increases sustainability in an intracompany collaboration that helps businesses to be more innovative in their manufacturing activities. ERP helps to create transparency that improves internal as well as external compliance.

Read our article – TIMEFRAME FOR NEW ERP SYSTEM

One of our client example who has implemented ERP software for small manufacturing business and increased the on-time delivery to around 95% including lowering the excess raw material cost by 65%. Further, the lead time was reduced by 5 days from 25 days.

The list of benefits for implementing ERP software is numerous. Although an improved supply chain management department cannot be overlooked as the effective supply chain department is the efficient production activities are done which further enhances the customer satisfaction. 

What are the differences between ERP and SCM?

difference between ERP vs SCM

Now that we have all the details about ERP and SCM, here is a look at how the two systems differ from each other:

  1. External vs internal (ERP and SCM)

The major difference between SCM vs ERP is that ERP (Enterprise Resource Planning) software focuses on a business’s internal work processes, while supply chain management software deals with the data of raw materials from external suppliers. ERP handles the internal administrative aspects and systems such as product planning and production, so is effectively more in-house. SCM (Supply Chain Management) deals mostly with supplier collaboration and is largely external work processes.

  1. Comprehensive vs Technoscientific

An ERP (Enterprise Resource Planning) is often used to arrange various key points of business programming, including the production and Focus database to deal with various aspects of the business, and the SCM (Supply Chain Management) is a tallied, the concentration of software is more and focuses on operations, organizations that get the raw materials into the Inventory. ERP is a much more comprehensive software where SCM programming is much more detailed.

  1. Relationship-based vs task-based

When it comes to the nature of processes and transactions are handled by ERP(Enterprise Resource Planning) and supply chain management and there are also significant differences between ERP and SCM. The SCM aspects such as shipping materials are evaluated, and also assessment relationships with third-party suppliers. This accommodates sourcing supplies and inventory. However, ERP systems are more centrally focused on tasks, managing the core processes infrastructure of a company.

 Globalteckz Experience with Supply chain management software & ERP solutions:

At Globalteckz we are official Odoo partners which is one of the leading open source ERP software available for small to big organizations. We have successfully implemented Odoo software specifically for manufacturing businesses replacing the old legacy system with improvising their business processes. For more information, you can contact us at sales@globalteckz.com

Read More on Odoo ERP software : 

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