Over the last couple of decades, business organizations have been using smart and efficient business automation software in order to enhance productivity, gain operational efficiency, and achieve profitability. We think that an organization that’s managing the supply chain and logistics operations can’t perform its operations effectively without a powerful and smart logistics management ERP system. Actually, we think that logistics management is the backbone of any supply chain company.
The integration of logistics and ERP is immensely beneficial to any manufacturing and distribution business that is looking to increase efficiency, speed, and customer satisfaction across all of its operations. Organizations have used Enterprise Resource Planning (ERP) software for managing business information, integrating numerous disparate systems, streamlining workflows, and achieving efficiency.
Enterprise Resource Planning software has the great potential to streamline and manage overall business operations by seamlessly integrating various processes and systems from order intakes and production management to sales and customer service.
To survive and expand in today’s competitive market organizations need to have the ability to flexibly adjust their logistics work-flow process, operations as well as information flow with detailed logistics regulations and rules. An effective ERP system integrates various organizational elements, such as logistics information, people, and processes, flexibly, which allows firms to gain more control of their logistics environment.
How ERP Software Can Improve Logistics
Companies that have used ERP software report that they have seen benefits, such as improved warehouse management, inventory reductions, better customer service, and enhanced demand forecasting.
Let’s understand how ERP software can streamline and improve logistic functions in an organization.
Better Inventory Management
An ERP system can help cut down expenses in several ways. ERP software can help enhance inventory management by facilitating the quick response model or just in time model. This helps eliminate the strain regarding the availability of raw materials, and hence the need to store raw goods can easily be addressed. ERP software helps business organizations make smart decisions by providing them with accurate and updated inventory data.
ERP systems enable companies to better control their logistics, finance, operations, and inventory from one system, which reduces errors and improves efficiency.
Under production and overproduction can both be detrimental to any company. To reduce costs it is important to have a suitable mix and the right quantity of inventory in hand. An ERP solution allows you to effectively plan production and replenishment needs.
As a well-integrated and holistic solution, ERP software can make it easy and quick to extract vital information from the system to gain real-time insight into a business’ health. This information can also be shared with different third parties, like suppliers.
Keep in mind that organizing various inventory management processes not just helps a company save valuable time by smoothening out any production bottlenecks, but helps it cut down on costs via better inventory planning. Also, better organization can lead to more customer satisfaction.
Accurate Financial Reporting
It is worth noting that inventory in nearly all stages forms a key part of a company’s financial reports and statements. Be it work in progress, finished goods, or raw materials, all kinds of inventory have a monetary value that has to be accounted for properly. ERP systems, in this regard, help ensure that a company’s annual reports as well as corporate tax returns are up to date and accurate.
Effective Demand Forecasting Translates into Lean Inventory
An effective ERP solution improves the accuracy and consistency of demand forecasting while ensuring that the cost of inventory is kept to a minimum in case of the large-batch production process. Keep in mind that a lean inventory is important to address just-in-time production method in order to reduce the overall cost of production and keep the supply chain agile and flexible.
Better Assign Employees on the Right Warehouse
Nowadays, warehouses aren’t what they used to be. This is because new technology, like Cloud computing, has considerably changed how manufacturers and distributors manage and oversee their warehouses and distribution centers. Human resources are an important yet often-overlooked link in many manufacturing companies.
ERP software can make staff management easy. Modern ERP software solutions have powerful modules that empower management to effectively and efficiently recruit, monitor, train, and track employee performance. With a quality ERP solution, warehouse managers and supervisors can easily track employee productivity and performance on a daily basis, which is great.
Managers in can benefit considerably from ERP software in the following ways:
- Monitor employee working hours as well as rest periods and lunch breaks
- Track staff when they are making deliveries
- Check employee paperwork and other details
Slash Shipping Costs
Shipping and distribution are a crucial part of most manufacturing and wholesale distribution businesses. Modern ERP solutions provide robust and reliable functionality for receiving, packing, picking, and shipping in order to ensure customers get the right product at the right time.
Some of the specific functionalities include:
- Print packing and picking slips, and shipping labels
- Ability to manage RMAs
- Integration with many common shipping carriers
- Wireless barcode scanning
- Integration with various rate shopping tools in order to help minimize shipping costs
- Shipping history
- Pack-to-container functionality
This is a great benefit of ERP software. Integration with common shipping carriers allows organizations to easily and quickly generate shipping labels and other paperwork without having to enter information into several solutions, which saves a lot of time.
ERP software solutions integrate with many rate shopping applications in order to help businesses get the best shipping rates with ease. Once employees have completed packing orders into suitable boxes specifying weight and size, the system can automatically populate a comprehensive list of available carriers and their respective rates and services.
Employees can choose an option and the relevant information is used for generating shipping labels and any other associated paperwork – and the product is ready for shipping!
Meet Your Customers’ Need for Speed
Companies can replace manual steps, rules, decisions, and other labor-intensive work with ERP automation. They can quote prices and capture order tracking numbers.
Many modern ERP systems can help businesses eliminate or cut down store returns which can clutter the stock room and, hence, require a shipment back to suppliers. ERP software can easily coordinate with many parcel delivery companies, and the customers only have to print a shipping label to take their products to a convenient drop-off point.
For nearly every manufacturing and wholesale company, an ERP system is the glue that holds the entire operation together.ERP systems have order management modules that handle order entry and order status, tracking, delivery dates, and credit limit checking. And for most manufacturers these are essential features.
Synchronize Orders with Inventory
With an ERP system’s order management module, you can eliminate time-consuming order creation and order tracking processes, and get rid of double handling errors and disjointed data.
Faster Order Fulfillment
One of the key benefits of an ERP order management system is quicker order fulfillment as well as more effective sales administration. The software can help improve cash flow, increase data entry accuracy, and lower order errors and fulfillment delays. It can also improve customer satisfaction.
Another great aspect is that reporting and analysis features can balance workloads while identifying process bottlenecks.
Evaluate Vendor Performance
ERP systems are smart and make it easier for organizations to measure both qualitative and quantitative factors of respective vendors. This can help the top management in making smarter decisions as well as performance improvements in the current competitive market. Also, it helps purchasing departments in companies to choose the supplier or vendor while facilitating continual monitoring. This kind of data can help better negotiate at the time of switching vendors.
Enhanced Customer Satisfaction
It is worth mentioning that accurate production planning, streamlined process scheduling, enhanced control over inventory, and close coordination of distribution channels can enable companies to improve the timely delivery of products, which is a critical performance metric for most businesses. Delivering products on a timely basis is critical to maintaining and improving customer satisfaction.
ERP solutions are great as they offer organizations data in real-time so that decision-makers can easily get a realistic view of the inventory levels at any time.
Organizations have to make considerable improvements in their logistics performance for overall business growth. There is no denying that the key to maximizing the operational efficiency in the company is to minimize space wastage on store shelves and reduce costs spent on warehouses and distribution centers. According to statistics, businesses tend to spend at least 25 percent of their budget on ERP which has reliable logistics and supply chain management features.
Integrating a powerful and reliable ERP solution helps lower a business’s labor and other operating costs. With it, most businesses can better manage their entrepreneurial resources, eventually seeing maximum ROI.