Role of ERP in Supply Chain Management

Supply Chain Management (SCM) is a set of tools manufacturers and distributors use to plan, track and manage the movement of materials and products into and out of their organizations. SCM is an essential part of any successful manufacturer’s workflow, as it impacts the company’s ability to deliver finished products to customers accurately and on time. However, SCM software cannot perform to its full potential without the support of an Enterprise Resource Planning (ERP) system.

Many manufacturing companies integrate their ERP software with their supply chain management. If you haven’t connected these parts of your organization already, doing so only becomes more vital as your business expands.

Why Integrate ERP and Supply Chain Management Systems

When you integrate your ERP with your supply chain management systems, you’re essentially supplementing your SCM with information about your company’s finances, sales and processes. The result is supply chain management informed by a broader view of business operations. Supply chain integration in ERP can come with many benefits for manufacturers, including:

• Optimized inventory: When you support your SCM with data from throughout your organization, you can make more accurate forecasts and optimize the inventory you keep on hand. This means keeping holding costs at a minimum while protecting production schedules from disruption due to low inventory.
• Streamlined workflows: ERP software aggregates all your company’s data in one centralized database. When ERP is connected to your supply chain management tools, the need for double entry will get reduced and you’ll have the opportunity to streamline workflows through automation.
• Satisfied customers: More effective supply chain management through ERP integration means you can produce high-quality products quickly and deliver them accurately and on time. Such a performance boost is likely to create satisfied customers who place repeat orders.

How to Complete ERP-SCM Integration

The impact of ERP on supply chain management can be huge. If you’re interested in linking these two systems in your organization, you have two options — either purchase an all-in-one software package or choose an ERP that can integrate seamlessly with your existing or third-party SCM applications.

Either method of integration can produce positive results. However, smaller organizations may find it easier to purchase an all-in-one application. This is because an ERP that comes with built-in support for supply chain management usually takes less time to install and maintain. On the other hand, rapidly growing organizations might choose to link separate systems to meet their needs for scalability.

In general, look for a software solution with support for the following processes:

• Inventory management
• Supplier management
• Transportation management
• Warehouse management
• Order management
• Demand planning

See the Impact of ERP on Supply Chain Management

If you’ve decided to integrate your company’s ERP with supply chain management, you may also choose to work with a Value Added Reseller. At Clients First Business Solutions, we can adapt a variety of ERP products to meet your organization’s unique supply chain management needs and support you throughout the implementation process. To see how our knowledgeable ERP consultants could help you take control of your supply chain, contact us for more information today.