Supply Chain Management and ERP

Supply chain management (SCM) helps organizations deliver goods and services to the right place at the right time in appropriate quantity and at an acceptable cost. Managing the supply chain involves handling suppliers and customers, controlling inventory, getting feedback and forecasting demand at every link. Implementing an ERP application will ease the process and help make accurate decisions.

First and foremost, inventory management comes into picture in each and every process. Required raw materials, parts, sub assemblies and other goods are to be kept adequately in order to handle uncertainties and emergency situations. The ERP application can help Inventory manager stay up-to-date about available inventory and further requirements. It also helps accurately project raw material requirements in near future, considering the data from other processes.

Next comes the transportation. Raw materials and parts are to be transported to the place where they are assembled. Choosing the appropriate way to transport goods involves shipping as well as clearances. With the help of an ERP application, the inventory manager and the supply chain manager can decide the best and most cost effective way to transport the goods from inventory to production area – by air, sea, rail or road, depending on the distance and the type of goods that need to be transported.

Third is the production. Assembling the raw materials, packaging and distributing the products are to be managed in order to know the total output of the plant(s). As the decisions and methods used in the production process have direct impact on the operational expenses, revenues and customer service, an ERP application which can integrate different processes across the production line, can greatly help managers to ensure consistency and accuracy. With accurate and real time data through ERP, the production efficiency would be better.

The above processes are involved when it comes to product flow. In the same manner, processes vary when it comes to information flow (order processing and delivery processing etc.) and financial flow (credit terms, payment schedules, consignment schedules etc.).

Implementing an ERP solution is an efficient way to integrate various tools and smoothen the process right from inventory till packaging and delivery. This also ensures excellent data management, analysis and swift decision-making process. But the benefits of implementing an ERP solution will be evident after six to eight months of implementation. This is the time period when staff and other management get hands-on experience in using the tools. Once they are well aware of the tools and its functionalities, the process becomes smooth and everything else falls into place properly.