What is the role of an ERP System in Supply Chain Management?

In the past, supply chain management (SCM) was a difficult and sometimes cumbersome process for businesses to deal with.

As time progresses, it becomes increasingly important for businesses to adapt their operations to ensure agility. This is often achieved with the use of smart software, like an Enterprise Resource Planning (ERP) system.

ERP integration helps businesses achieve operational efficiency by automating the SCM process. Instead of relying on separate systems to manage SCM and other key business operations, an ERP solution easily consolidates them into a single dashboard.

From sales to human resource practices, ERP streamlines business management by integrating contrasting systems, combining workflows and managing information to achieve operational efficiency and success.

So, how does ERP function in supply chain management? And, why are 50% of businesses already using it? Let’s take a closer look at how your business benefits from supply chain management with ERP.

ERP in Supply Chain Management?

SCM plays an important role in various businesses, especially those in the manufacturing industry.

For instance, manufacturers rely on a series of partners and suppliers who provide them with specific quantities of materials and resources required for the production of their offerings.

As part of their agreement, the delivery of these materials must align with the manufacturer’s production schedule and deadlines. SCM helps businesses reduce production costs while improving productivity in their facilities to enhance product quality.

As businesses expand their operations, managing SCM processes becomes increasingly difficult. This is why several businesses turn to ERP systems to manage SCM.

Not only does ERP software give your team a detailed, real-time look at business processes using centralized databases, it also streamlines the entire process.

This means that your business wastes less time and money with a more complicated, decentralized system and instead focuses on agility and process improvement.

ERPs play a multi-faceted role in supply chain management, assisting with key functions including:

  • Accommodating demand: As part of its many automated features that streamline SCM processes, ERP solutions are able to create demand upon receiving orders. Once the order is received, the ERP software implements job scheduling. This benefits plant supervisors, who receive real-time information about the resources being used to fulfill the tasks. Additionally, it helps them accurately plan dates for product delivery while ensuring that all production jobs align with demand.
  • Managing procurement: SCM-focused ERP systems help to manage procurement and supplies of resources and raw materials relevant to the supply chain. With ERP, tasks such as warehouse resource management, transportation of materials, and vendor communication can be streamlined or automated to expedite processes for improved efficiency.
  • Production information: From developing a bill of materials (BOM) to supplying real-time data for labor and mechanical resources, ERP software can expedite production processes across your supply chain. The ERP system can also record shipping documentation to reduce errors and ensure timely product delivery. If last-minute changes are required for certain jobs or orders, they can easily be implemented though your ERP solution.
  • Shipment processing: Your ERP system can create invoices which are subsequently sent to the customer when the products have been shipped to them. The software also maintains a complete archive of shipment and delivery data to ensure all orders are shipped on schedule. The ERP software can also be configured to select and perform quality assurance checks on packaging while resolving resource conflicts.


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Implementing Supply Chain Management and ERP Integration

Now that we’ve covered the role of ERP in supply chain management, let’s focus on how your business will go about purchasing all-inclusive software.

ERP and supply chain management go hand in hand. A properly-implemented ERP system can consolidate SCM processes into a single dashboard for easier management. This brings benefits for large and small businesses.

These benefits include:

  • Production issue reduction
  • Accurate demand forecasting and lean inventory
  • Complete transparency for all business processes

When conducting your product research, you should look for an ERP system that helps you with the following supply chain processes:

  • Supply chain planning
  • Inventory management
  • Warehouse management
  • Material management
  • Purchasing and procurement
  • Monitoring and maintenance
  • Measurement
  • Assessment


Streamline Your Supply Chain Management

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How Your Business Benefits from Supply Chain Management with ERP Integration

At Corning Data, we are dedicated to our clients’ success. Our experienced team of ERP supply chain management experts can help your business select the perfect ERP system for your goals.

Enjoy the benefits of a centralized ERP solution for your business. Contact us today, and let our consultants show you the benefits of integrating an ERP system in your supply chain management processes.


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