How does ERP help optimize the supply chain?

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Posted on February 26, 2021

The supply chain is considered one of the complex yet vital components of a business. To promote growth, it is imperative to have a robust system that streamlines various processes, including demand, procurement, supply, inventory, transportation, and customer data. According to a report from Finances Online, some of the most common KPIs used for supply chain monitoring include daily performance, cost reduction, production service rate, inventory turn, production time, lead time, return rate, and ROA. With the complexity of tasks and the need to analyze data from various sources, ERP software providers offer a well-integrated supply chain management module with their ERP offerings.

Role of ERP in supply chain

Over the last few years and especially in the COVID-19 situation, organizations worldwide have recognized the many benefits of ERP in supply chain management (SCM). From improved customer service, workflow automation, cost reduction, ERP has proven to have several positive advantages. Certain features of ERP play a more significant role in the supply chain. Some of them are

  • Cross-platform visibility resolves quality issues and improves time to market.
  • Supply chain planning helps stay ahead of customer demand through agile planning.
  • Analytics help optimize logistics and inventory.
  • Monitoring and maintenance reduces equipment downtime and OEE. (Overall Equipment Effectiveness)
  • Faster recovery from break-in supply-chain after COVID-19 in terms of supply and demand.

Supply Chain Optimization

Benefits of implementing ERP in SCM.

  • Reliable and direct inter-department communication with IoT
    ERP is a business-wide software that helps connect a network of parties such as manufacturers, suppliers, distributors, retailers, and customers. ERP facilitates supply chain optimization by facilitating transparent communication among departments, thus eliminating information silos. The system updates information in real-time with the help of IoT (Internet of Things), eliminating communication bottlenecks that can ultimately lead to confusion and delays. Manufacturers, suppliers, distributers, and retailers have access to a variety of data sources with the help of IoT sensors that regularly provides them with data on shipments, warehouse inventory levels, customer-owned assets and more.

    Enabling Digital Supply Chain

  • Enhanced process flow visibility
    As a holistic platform, ERP feeds the relevant data of the processes collected from different sources to the users. Multiple users within the supply chain benefit from this data as it helps streamlines the completion of tasks, thus leading to an efficient product delivery timeline and improves tracking accuracy. The real-time data leverages predictive analytics to eliminate production slowdowns and enhance production efficiency across locations.

  • Improved end-to-end supply chain visibility and transparency.
    According to GEODIS Supply Chain Worldwide Survey, 62% of organizations have limited supply chain visibility. A sound ERP solution with Block Chain technology gives supply chain visibility to monitor customer demand, market trends, and inventory to maintain agility. This transparency allows businesses with better customer servicing and problem-solving capabilities. Management has better insight into the various parts of the supply chain, thus making more informed decisions by understanding the relevant data issues. Block Chain combined with IoT can help customers to track the status of their assets along the supply chain in a transparent and secure manner.

    Freight Transportation

  • Efficient demand planning and monitoring
    The very definition of supply chain optimization requires a strong understanding of demand planning and monitoring. Using an inventory management module augmented by Big Data and Analytics in the ERP, organizations can create strategies centered around increased control, better margin, and improved fulfillment agility, leading to an enhanced customer experience through shorter delivery time.

    Digital Transformation

  • Better supplier-qualification process
    A good ERP allows organizations to move from a reactive to a proactive state of performance. Rather than wait and react to the quality of the materials provided by the supplier, a good ERP allows organizations to be proactive and optimize the qualification process to ensure the organizations’ vendors meet the company’s standards, in terms of quality of materials supplied. By standardizing this process using ERP, companies can effectively evaluate current and potential vendors to improve sourcing and fulfillment strategies.

    Now that we have seen what the various benefits of implementing an ERP are, the question remains which ERP to choose? Microsoft’s answer to this dilemma is Microsoft Dynamics 365 Supply Chain.

Microsoft Dynamics 365 Supply Chain:

Microsoft Dynamics 365 Supply Chain makes operational innovation and technological modernization, the key pillars for a modern supply chain, possible.

It enables operational innovation and technological modernization by enabling users to

Operational Innovation:

  • Optimize fulfillment by synchronizing information across logistics, sales, and purchase management.
  • Streamline the procurement process and get deep visibility into product inventory.
  • Accelerate product delivery with advanced transportation and warehouse management.

  • Implement a unified and intelligent production lifecycle.

Technological Modernization:

  • Automate business processes across Dynamics 365 solutions to create a unified user experience.
  • Build and deploy scalable web and mobile client apps.
  • Move toward a modern approach by infusing IoT and mixed reality.
  • Seamless integration capabilities with business ecosystems.

To learn more about how Microsoft Dynamics 365 Supply Chain can help you modernize your supply chain operations watch the below video.

Korcomptenz is a Microsoft Gold Partner that offers turnkey, cost-effective ERP solutions that help accelerate business operations, generate meaningful insights into the business, and promote digital transformation. Our solutions are suitable for various industries, such as manufacturing, retail, eCommerce, and logistics. We offer a range of services, including implementation services, managed services, advisory, and consultancy, upgrade and migration, system integration, and support and maintenance.

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