In today’s digitally advanced and cutthroat world, organizations crave every legitimate benefit they can earn from any valuable means to ensure competitiveness.
Advantages of SCM Module Integrated in ERP
An ERP system with all its competitive advantages plays an integral role in turning your manufacturing business into a profitable success.
It provides broader visibility and improved efficiency across all departments by streamlining and automating workflows – from procurement to production and shipping. It will, in turn, allow you to control overhead and reduce operational costs.
An enterprise resource planning solution is vital to access and utilize real-time and accurate data across multiple departments in any business. Here, we are considering manufacturing and production as a case in point.
For sustainable competitive benefits in the manufacturing industry, you need clear insights into all of your business operations, accurate reporting of all working processes that help you organize your finished goods production and supply chain management (SCM). Not doing so, you will not be able to strategize and optimize the procedures for managing and ongoing monitoring of supply chain and logistics.
Create and Maintain Your Procurement Process with an ERP
Today, manufacturers are using ERP software solutions to handle their supply chain. A fully integrated and scalable supply chain module in your selected enterprise resource planning system – offering many other functional modules – help you in creating and handling procurement processes.
It will help in all business operations because the supply chain, directly and indirectly, is related to your manufacturing plant and therefore you need its seamless integration with data management and other organizational processes.
Supply chain management plays a significant role in catering several aspects of procurement operations, which usually include:
Demand and Planning:
ERP solution greatly supports manufacturers in streamlining supply chain management by creating demand quickly and efficiently when customer orders are received.
It also helps in creating effective production scheduling and hence, managers have real-time information about the resources (both tangible and intangible) being used for order fulfilment and product delivery. As a result, they can better manage customer demand and plan well about the delivery dates of the finished goods.
Procurement:
You can acquire and source the goods and services your organization needs to gain a competitive advantage by focusing on long-term goals and strategic planning while finalizing the purchase orders.
You can manage and monitor the procurement and supply of raw material, finished goods, and other resources across the supply chain and logistics. Also, it helps automate various other supply chain-related tasks that were earlier handled manually such as communicating with your suppliers and negotiating the contract terms with the selected vendors and keeping the track of all communications.
Production:
An ERP Software for manufacturing enables the manufacturers to create a bill of material (BOM) for each product they design and develop. Before and after the start of the production process, the supply chain management module supports the real-time recording and updates of all shipping documents.
Not only, but you can also have all the information about your labour and machines involved in the production and delivery of the finished goods. Furthermore, an ERP not only automates the supply chain processes but also eliminates the chances of data errors that were commonly found earlier due to manual handling of supply chain information.
Shipment:
Supply chain management through the enterprise resource planning system covers everything from procurement to warehousing, manufacturing, and then finally shipping the items to the customer who placed the order.
Here, you can create an invoice for the shipped items – making shipping manifest easier. You can also maintain your central repository and delivery details for all the shipments you need to do for your clients without trouble. Moreover, it helps in setting criteria for quality assurance and deciding the packaging methods for product delivery from origin to destination.
Relationship Management:
Just like producing and delivering quality products is important for a discrete manufacturer, it is critical to develop and maintain good and profitable relations with your suppliers. As an essential and ongoing process, supplier relationship management through an ERP helps identify the best vendors to work with and make well-informed decisions to ensure improved and long-lasting supplier collaboration.
What Else?
ERP supply chain management also helps procurement staff, purchasing officers and even buyers providing you with their quotes can request raw and finished goods and other subcontract services from single or multiple vendors. Here’s how:
- Make smarter sourcing decisions because of having greater insight and broader visibility into your supplier communications.
- Reduce production bottlenecks by enabling best procurement practices, a collaboration between internal resources and external suppliers involved throughout the chain.
- Create and manage centralized records for customers, material procurement and suppliers to ensure accuracy in all related workflows besides eliminating redundant and inaccurate data entries.
- Significant decrease in the transaction times with ERP automated tool that enables you to quickly convert your vendor responses into actionable purchase orders.
- Maintaining lean inventory levels and supply chain flexibility through adequate demand forecasting and effective production methods, and thereby bringing down the overhead.
Overall, a manufacturing ERP delivers SCM amenities resulting in better control over business operations, shop floor performance, procurement and manufacturing cost and customer satisfaction.
Now, to achieve these advantages, it is important to prioritize key features of the SCM module in an ERP system. These include;
- Customization of supply chain processes to meet the unique needs of your manufacturing business.
- Integration of ERP software with a supply chain module also helps simplify other manufacturing operations by reducing human errors.
Wrap Up | Advantages of SCM Module Integrated in ERP
Supply chain management is vital for the success of your manufacturing business. Select the best ERP software with SCM module that enables the enterprise to streamline and automate cross functions including procurement, inventory control, finance, sales, distribution and project management.
Supply chain management functionality in enterprise resource planning provides greater visibility into suppliers, facilitating communications with vendors and reducing the transaction costs.
With all the aforementioned benefits of ERP in supply chain management, you can take your manufacturing business to the next level.
