Ultimate Guide to Understanding ERP Supply Chain

Ultimate Guide to Understanding ERP Supply Chain

For many, the mere mention of the ERP supply chain causes stomachs to churn. Enterprise Resource Planning (ERP) software is a general term for any software application that integrates all of a company's processes and data into a single unified system. But for all its good intentions, this well-known technology is infamous for carrying a seven-figure price tag and requiring painful multiyear deployments, not to mention scores of high-priced ERP supply chain consultants to keep systems up and running.

Fortunately, an ERP supply chain implementation doesn't have to spell disaster. A carefully crafted rollout can offer companies real-time visibility into sales patterns, merchandise availability, cash flow, and more. 

Even those companies that have long been relying on the ERP supply chain to consolidate data will find it worthwhile to re-examine their current system's features and functionality. The key to making the most of an ERP system, however, is developing an in-depth understanding of the technology, its benefits, and its limitations.

ERP Supply Chain Modules Defined

While no two ERP supply chain solutions are the same, there are some common functionalities among today's offerings. These types of ERP software modules include:

  • Manufacturing: ERP supply chain functions include engineering, workflow management, quality control, and manufacturing process.
  • Financial Management: Enables companies to meet financial reporting and tax requirements with one accounting, tax, banking, and payments system. Managers can boost financial performance with real-time ERP supply chain information on their department's expenses and revenue contributions. This module also helps to improve cash flow, lower costs and increase profitability while maintaining more accurate, timely, and transparent financial reporting.
  • Human Capital Management: Functions include all core HR processes including employee administration, payroll, and legal reporting.
  • Supply Chain Management: Aids in all ERP supply chain processes, from design, planning, and procurement to manufacturing and fulfillment.
  • Project Management: Provides a unified view of all project-related activities so that companies can select the best projects, assign the proper resources, streamline delivery efforts, and track profitability.
  • CRM: Brings ERP supply chain data together to enable salespeople and marketing planners to better address customer needs, preferences, and buying patterns.
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ERP Supply Chain Perks

With big-name ERP supply chain vendors such as Netsuite, SAP, and Sage all offering ERP supply chain solutions, it's no wonder the technology offers a virtual laundry list of benefits. These include:

  • Improved alignment of corporate strategies and business processes
  • Improved customer service
  • Streamlined ERP supply chain processes
  • Better targeted marketing campaigns
  • The ability to share data across various departments in an organization
  • Enhanced financial tracking and forecasting
  • Reduced costs
  • Enhanced productivity with self-service capabilities
  • The ability to effectively manage projects

Having an all-in-one integrated ERP supply chain system for all of your company’s processes can help streamline business operations and in turn, improve productivity and profitability if executed correctly. 

Cons of an ERP Supply Chain Solution 

Although an ERP system might seem like the answer to all of your companies’ prayers, let us get serious and explore the drawbacks of ERP supply chain systems as well. 

Costs of an ERP supply chain system

While an ERP supply chain system might be the perfect solution for your company, it will also run you a significant bill. Deploying an ERP system will come with costs for third-party add-ins, ERP implementation costs, maintenance costs, and also the overhead costs of training both initially and continually as long as you use an ERP supply chain system.

Complex data conversion

You must start off using an ERP supply chain system with the right data inputs. Without the right data conversion strategy, you are very likely to run into delays in deployment and also run up the bill. 

It is imperative that you develop a comprehensive data conversion hand beforehand having clearly defined, examined, and analyzed all data sources that your company may need to use for a successful and effective ERP supply chain system implementation.

Training period

Any ERP supply chain system will require a significant time commitment from your team. After the initial consultation with the ERP supply chain software system vendor and the customized ERP product is ready, you need to ensure that it is in line with the business processes that your company uses. 

All employees that will use the ERP supply chain system for completing their jobs will have to be trained thoroughly. Your company will have to incur the costs of training as well as compensate for the time employees spent learning to use the ERP system.

Are ERP Supply Chain Systems Worth It?

If your business is on the rise and is projected to continue in its success, we would definitely recommend using an ERP supply chain software solution. It will not only be worthy of the costs discussed above but also be a tool to help reduce costs in the long run. 

Cost effectivity is one of the most attractive perks of an ERP supply chain system and what business doesn’t want that? To ensure that undertaking your ERP system implementation serves to its fullest potential, deploy it with all the relevant data, features, and seamless ERP integrations with other software solutions right off the bat. Having to integrate different systems down the line will not only be costly but also will cause lags in productivity with the increased training required whenever you tweak the software. 

Hence, it is a good idea to narrow down all the functions of your business that can be consolidated using an ERP supply chain system and seek out perfect ERP vendors that are right for your requirement. 

Being able to see company data in a single dashboard and make decisions with ease is going to seem priceless after your chosen ERP supply chain system becomes a frequently used product. 

If you’re convinced that an ERP supply chain solution can be just what your company needs, you can learn more about how to select the correct vendor using our ERP buyers’ guide. While you’re at it, you can also compare all the top ERP software vendors to narrow down your choice. 

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