ERP In Supply Chain Management

Recent market uncertainty has placed great strain on manufacturers forcing them to adapt and run operations more stringently than ever before. Now in a bid to build business resilience and optimise operational efficiencies, many manufacturers are realising the importance of ERP in Supply Chain Management.

The author of this page: Brendan Geraghty
Brendan Geraghty, Practice Director - D365 for Financial Operations Jul 15, 2022

Supply chain management is the management of materials including the procurement, storage and movement of materials and raw parts as well as the organisation of inventory and finished goods to the point of consumption. Effective management of supply chains plays an important role in the overall success of a business, particularly in the manufacturing industry, leading to improved efficiencies, cost savings and timely delivery of jobs to keep production moving. When it is not managed correctly, supply chain management can become a more time-consuming process that can hinder productivity and impact quality, causing delays and unnecessary expenses.

Recently market uncertainty due to the impact of the pandemic, Brexit and the conflict in Ukraine has placed great strain on supply chains and manufacturers with them being forced to manage supply chains in an even more stringent manner than they ever did previously. With effective supply chain management an essential part of any business plan in terms of business resilience and growth targets, many organisations are looking to optimise their supply chain management processes to encourage smoother and more profitable outcomes. This is where Enterprise Resource Management (ERP) solutions such as Business Central come in. Over the years, ERP has had a very positive impact on the ways in which businesses operate and is often a critical component of success. ERP software can consolidate all supply chain operational data under a single dashboard to help streamline operations. Below we explore some of the top ways ERP can help optimise supply chain management.

Increased Visibility

ERP provides manufacturers with a holistic and consolidated view of the entire supply chain giving greater oversight into every part of the supply chain. This allows for managers to make better-informed decisions and to spot problems or bottlenecks more easily with supply chains ensuring they can be resolved more easily leading to less disruption.  Total visibility also gives an overall view of inventory and orders that are being processed ensuring that more up-to-date data can be shared with customers about orders too.

Better Inventory Management

ERP solutions can provide an extensive inventory tracking system for manufacturers to help them manage inventory and product stock. Manufacturers can categorise and organise inventory, record product movements and better manage warehouse data allowing for a deeper understanding of where the inventory is at all times leading to fewer problems for manufacturers. Inventory management also makes it easier to record what raw materials have been consumed, what materials have been assigned to a particular project or what is out of or low in stock which can help inform the purchasing department.

Managing Demand and Procurement

Like inventory management, ERP solutions allow for easier management of procurement and supply of goods or other required resources. Depending on the types of materials required, the procurement process can be more difficult for some manufacturers, especially those who require resources with long-lead times. ERP solutions can cater to many unique situations when it comes to this by helping automate everything from warehouse resources to transportation and execution processes as well as other supply chain processes tailored for your organisation. ERP solutions can also integrate with purchasing to make it easier for purchasers to know what is needed and when and to allow goods to be procured in a timely manner.

Vendor Comparison

ERP systems can also help in streamlining coordination between businesses and vendors. Through connecting suppliers to your ERP solution, they can work more directly with you to help you meet your goals by informing you when critical supply inventories are low and ensuring resource availability. Further, manufacturers can also easily compare vendors based on price, quality and reliability to ensure you always chose the correct vendor for the job and allowing for manufacturers to make more informed business decisions going forward leading to performance improvements.

Real-Time Reporting

Another benefit of ERP in supply chain management is real-time reporting. Creating manual reports can lead to time-consuming data gathering, a higher risk of inaccuracy due to human error and therefore poor decision making based on inaccurate or out-of-date data. ERP can give users access to real-time data and reporting features to allow managers to at a glance see an overview of the supply chain's performance. This allows decision-makers to keep better track of all the moving parts involved in supply chain management which will in turn help streamline operational efficiencies and encourage data-driven decision making, not to mention the time savings gained from no more manual reporting.

If you would like to learn more about how an ERP system can help improve supply chain management in your organisation, please get in touch to speak with one of our ERP experts.

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