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E. R. P.

'Enterprise Resource Planning' System

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.

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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