What Is ERP’s Role in Supply Chain Management?

In recent years, supply chains have become more complex and more widespread. This has driven industrial businesses to integrate enterprise resource planning (ERP) within their supply chain management (SCM) systems, thus enhancing existing systems with more information and actionable data.

Here are five ways, according to Laura Ross at thomasnet.com, that ERP systems can be used to augment SCM processes.

  1. Customer Service. Integrated ERP solutions have the potential to transform an organization’s ability to deliver high-quality customer service.
  2. Efficiency. ERP software amasses all of an organization’s data into one, centralized database, enabling informed, intelligent decision-making and highlighting areas along the supply chain that are operating inefficiently, such as warehouse space wastage or production bottlenecks.
  3. Risk. In the face of such uncertainty and disruption caused by the coronavirus pandemic, organizations will be more eager than ever before to improve supply chain transparency and implement more effective resource planning. ERP systems can help organizations to mitigate the effects of disruptive, unanticipated events.
  4. Inventory Management. Inventory management is a top concern for organizations. One wrong calculation could disrupt the entire supply chain, causing delays, unhappy customers, and production bottlenecks. On the other hand, hoarding excess inventory wastes warehouse space and racks up unnecessary costs.
  5. Production and Shipping Tracking. ERP systems effectively log and track every step of the production and shipping journey. The software can also determine the most appropriate packaging method and specify the criteria for quality control.


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