The Role of ERP in Supply Chain Management

Supply chain management plays an important role in the overall success of a business, especially for the manufacturing industry. Manufacturers rely on partners and vendors to supply them with the right type and amount of resources at the necessary time to keep production moving according to schedule. However, and according to a recent 2021 State of Manufacturing Report, “97% of respondents report supply chain management consumes a significant amount of employee’s time.” Supply chain management can be a cumbersome and time-consuming process if not managed efficiently, and ineffective management can inhibit productivity, cause delays, affect quality, and result in unnecessary expenses and profit loss.

As manufacturers expand, supply chain management can become an even more essential component of a smart business plan. That’s where Enterprise Resource Planning (ERP) software can greatly help businesses simplify and optimize their supply chain management processes for smoother and more profitable outcomes.

What Is the Role of an ERP System in Supply Chain Management

The valuable role of ERP in supply chain management can’t be stressed enough. ERP software has had a dramatic impact on the way businesses are able to operate, with a direct correlation to business growth. Effective ERP and supply chain management are critical ingredients to business expansion and success. When sourced from supply chain experts like QAD, these systems consolidate supply chain operations under a single dashboard, providing visibility and more streamlined coordination with suppliers and vendors. Manufacturing ERP software can also automate supply chain processes so that employees can be more productive in other areas.

Benefits of Using ERP in a Supply Chain Management Strategy

Adding ERP software to your supply chain management strategy is a game changer. Some of the primary ERP supply chain benefits users experience that lead to measurable business growth include the following.

Efficient Managing Demand & Procurement

ERP automates demand planning, creating demand upon receiving orders. When an order is received, the software implements scheduling. Team members are able to see real-time information about how resources are being used in production and can better plan production jobs and product delivery. Warehouse resource management, transportation of materials, and other supply chain tasks can be automated or optimized to improve efficiency as well.

Reliable Processing & Documentation

An ERP system can also create invoices, which are sent straight to the customer once products have shipped. Or, create and transmit required import and export documentation required for cross-border shipments. It automatically collects an archive of shipment and delivery data as well to reduce errors and ensure on-time delivery and better customer service.

Enhanced Collaboration

ERP and supply chain management processes are especially helpful in streamlining coordination between businesses and vendors. When suppliers are connected to your ERP system, they can work more effectively with you to meet your goals and reduce bottlenecks, such as recognizing when certain supply inventories are low and ensuring resource availability.

Increased Visibility

With more visibility and transparency, businesses can create smarter strategies around how they use their resources, from parts to personnel. ERP software can give your team a detailed, real-time look into your operations so you can see where things are going well and where they’re not, allowing you to target specific inefficiencies for better outcomes.

Cloud Capabilities

Though ERP systems are available as on-premise solutions, cloud ERP software has become popular in recent years. The major benefits of cloud ERP are dedicated data security and mobility. Using a cloud-hosted ERP solution means that the system can be accessed anywhere, anytime on mobile devices as long as there’s an internet connection. This allows for quicker action without the need for team members to be together, which can be valuable with the fast-moving aspects of supply chains.

How Does ERP Improve Supply Chain Management & Efficiency

Outside of more effective forecasting, planning, and collaborating, ERP is instrumental in supply chain efficiency in another area: business disruption. Market disruptors are inevitable to virtually every industry, and when one hits yours, you have to be ready to adapt quickly and successfully to get the job done.

The COVID-19 pandemic has shown how necessary proper preparation and responsiveness are to keeping businesses above water. Manufacturers are now focusing less on cost savings and more on supply chain adaptability, risk management, and speed, with the goal of creating flexible sourcing and more connected supply chain networks to respond to customers’ needs. Greater visibility, accelerated decision-making, rapid responsiveness, and other performance improvements are necessary to strengthen supply chain operations and prevent major setbacks when business disruptions occur.

QAD Solutions for ERP and Supply Chain Management

QAD provides adaptive ERP solutions for a connected supply chain and integrated supplier management to help businesses streamline these operations. These solutions address the multi-faceted challenges that come with managing complex and constantly changing global supply chains, including cross-border trade compliance, forecasting, warehouse operations, space management and other vital tasks. 

For more information on how QAD’s adaptive ERP solutions can help your business more effectively manage your supply chain operations, don’t hesitate to contact us directly.