Improving Supply Chain Efficiency with an ERP System

Date posted: August 9, 2012

By Kevin Ball 

Beginning with a customer’s order and concluding when a customer has received goods or services, the supply chain is how most businesses make their profit. Guest blogger Kevin Ball explains on an ERP system can streamline even a small business.

Each stage of the supply chain should be focussed on making the transition as efficient and cost effective as possible. Unfortunately, the vast majority of activity in the supply chain adds little to the end product. That said, businesses who invest in ERP (Enterprise Resource Planning) systems will notice a significant amount of wasted time can be eliminated in the supply chain; generating increased productivity.

ERP systems streamline a business by allowing all departments within a company access to a common database which they update via their own ‘module.’ To see where this improves efficiency in the supply chain we need to break the chain down into stages.

Supply Chain Management (SCM) is often broken down as follows:

Planning. Marketing, promotion, timing, quantity and stock replenishment – getting all these aspects in right prevents any hiccups further down the line.

Execution. This is where ERP comes in. Effectively securing, and supplying, goods and services require your business to be running efficiently. By having your floor staff, accounts people, HR department and so on… working from the same common database this can be done quickly and without the need for duplicate information. External vendors can also be included into your businesses ERP system so warehouse manufacture and transportation can be visible across the entire supply chain.

Monitoring. Due to an increased availability of data, ERP systems allow a near-real-time view of the supply chain. Establishing the current status of an individual order can be done in a few mouse clicks.

Measurement. It is necessary to compare speed and efficiency throughout the supply chain to set targets. Many businesses use scorecards or KPI’s for this.

ERP systems are also more environmentally sound as they reduce the need for internal paperwork by keeping everything in one easily accessible system.

Supply Chains involve a number of separate processes and streamlining these processes will increase productivity, in turn, making customer turnaround quicker. Time is money in business, but it also opportunity. By processing customer orders more efficiently, more customers can be taken on and more customers is the ultimate goal for any business.

Kevin Ball is a blogger with a keen interest in SMEs, business and business software. He can be found on twitter @KevinBall1982.

Image by Epicor.

 

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