How ERP Improves the Supply Chain


The supply chain;  When executed correctly, it’s something to behold! The pinnacle of efficiency. The backbone of “Just in Time” manufacturing. A well-oiled machine that is the lifeblood of your manufacturing business. For some, it can become quite the obsession -it’s their duty to keep it running without a hitch. For others, stressful! Always chasing the next marginal gain. But it doesn’t have to be that way! The supply chain can be therapeutic and calming – poetry in motion. But to create such poetry, you’ll need ERP.

Manufacturing software such as SYSPRO is very much associated with MRP, so you may be wondering how ERP improves the supply chain. However, it is a vital tool for every stage of the supply chain and invaluable when it comes to saving costs, boosting efficiency, productivity and overall bottom line margins.

When looking at the journey of a product we can explore the following stages and processes,  highlighting the important role that manufacturing management plays in each.

Production: From Idea to Market

Comprehensive ERP systems, such as SYSPRO afford businesses a number of avenues to uncover customer trends and market requirements. Using existing data, managers are able to use current customer trends to influence and underpin future product designs; ensuring products are meeting the needs of the customer before they reach the market.

ERP is also important in the planning aspects of production. Comprehensive ERP solutions can effectively forecast, using multi-level production planning, production costs and scheduling time frames. In turn, this information can be used to co-ordinate manufacturing processes, ensuring subsequent stages of development and production always run smoothly.

For example, electronics manufacturers are facing constant pressure to introduce innovative new products that are durable, cost effective and which fill a market gap. As a result, electronics manufacturers need reliable systems that enable cross-communication throughout the entire supply chain. With the vendor dictating to the manufacturer which stock to hold according to market demand, any technology which supports and fosters the vendor-manufacturer relationship is important. An ERP system which can manage and analyse Electronic Data Interchange (EDI) formats is a necessity that many electronics manufacturers cannot do without.

Manufacturing: Production – Service Delivery

A comprehensive ERP system is able to take multiple data streams from various platforms and systems and synchronise this data into a single stream, ensuring data integrity and quality remains high. Taking the data from early planning stages enables an intuitive ERP system to succinctly translate this information into a ‘live’ production operation.

This single data source affords businesses greater transparency of information, ensuring resources, including staff, materials, tools, and machines, are in place ahead of production. Cohesive ERP systems are instrumental to ensuring your business remains agile, adapting to change both internally and externally to ensure your business remains ahead of the curve.

Take the industrial manufacturing industry, which relies on increased productivity and efficiency, while continually controlling costs. In such a competitive industry, any product created by an industrial manufacturing business must be manufactured to the highest quality, in order to retain a competitive edge. ERP is a key component in helping any industrial manufacturing business to maintain high quality standards and solid compliance audit trails. With the functionality to allow you to track your inventory levels, capture data direct from the shop floor and integrate it with other information running through the system, you can ensure that you are monitoring quality from the moment a part enters your manufacturing process, right through to testing the final product and preparing it for distribution

Inventory Management

For many businesses its inventory is often its biggest asset, yet it often lacks the attention it rightly deserves. Intelligent ERP systems, such as SYSPRO, can update any changes to inventory levels as, and when, they occur. These real-time updates afford greater transparency throughout the entire supply chain; ensuring that orders can be met on time and within budget, providing finite scheduling frames to enable you to assess the impact of suggested jobs on your existing capacity loads

However, inventory optimisation does not relate solely to current stock levels. Employing a dynamic ERP system can also aid inventory forecasting at various levels by consolidating warehouses for logistical or supply chain purposes. This improves stock turns and service levels; reducing waste in the supply chain. Data collated at inventory stages can highlight where any problems are such as: stock-outs and over- or under-stocking. This information can be used to manage demand ahead of time, significantly improving the customer experience.

Take the automotive industry for example, with lean manufacturing being embraced throughout the industry, no parts manufacturer can afford to have an inventory surplus so inventory optimisation, an integral part of any ERP system, is key to managing this. Full traceability of stock from an ERP system, together with materials tracking is key to helping any automotive manufacturers to respond to demand.

Shipping and Tracking

From the raising of a purchase order to dispatch and delivery, order tracking, monitoring order processing and shipping, and communicating this to the customer.

Intelligent ERP systems work to ensure the order can be fulfilled, calculating stock levels against production time and costs. By harnessing projected supply and demand data, and converting it against actual requirements, your business can create realistic purchasing and shipping time frames for customers, as well as optimising output.

Ensuring internal data processing, such as production and order numbers are kept in a single source provides enhanced visibility throughout every stage of the supply chain. Such data integrity does not only ensure that tracking information is up-to-date, but in the event of a query, this data can be readily available, easily viewed, and searched by managers, ensuring a resolution is found at the earliest convenience.

The distribution industry is just one such industry that relies on an ERP solution that allows them to instantly track the DNA of any item, at any time, to ensure that a customer knows exactly where their goods are. The most effective ERP solution will be able to seamlessly integrate with complementary software that further enhances the customers’ processes.

Reporting: What Your Processes Can Tell You

The journey of a product doesn’t end once the product or service is delivered. The prime focus of any ERP system is to collate information. The combined processes that have taken a product from idea to market, and then onto the customer, are synchronised into a single source providing real-time reports, dashboards and scorecards to your business.

It is this improved access to information which underpins future business processes. Intelligent ERP systems, such as SYSPRO, enable businesses to make decisions that impact on customers, sales, profit, growth opportunities, and business operations. ERP analytics enable you to make proactive and accurate strategic management decisions using a multi-dimensional view of information extracted from transactional ERP data.

The importance of single source data can be found in our customer Sinclair IS Pharma, who has a presence in five leading European markets and has developed a global reach. As a result, the company required an ERP solution that links the data from each country it operates in, complete with Inventory Optimisation, Forecasting and a Materials Resource Planning feed. SYSPRO, with its seamless integration and scalable capabilities, was the ideal solution.


The Supply Chain and the Future

The internet has ushered in an omni-channel retailing world, in which businesses are increasingly forced to evolve their supply chains to become more agile, resilient and customer-centric.

As a result, organisations tend to want their supply chains to have simultaneous characteristics: efficient, fast, agile, custom-configured, and flexible, among others. Yet each of these capabilities requires different skills, and in the majority of cases, these skill sets are incompatible within the same supply chain. However, it is possible to develop several supply chains within a single organisation, each focused on a defined market segment with a responsiveness level and a cost structure that are appropriate to the segment it serves.

Another important influence on the current direction of supply chain modelling is engineering technology. Robotic handling, assembly, automation and advancements such as machine learning are allowing new business models to evolve. As a consequence of automation, companies are able to consider reshoring their production, packaging and other operations to bring manufacturing closer to their customers. For these companies, the cross-functional data provided by a best-in-class ERP system like SYSPRO enables them to revolutionise their supply chain models.

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  1. […] that they need to automate their processes, align their teams, and unify and share their data across the enterprise. However, this is easier said than done. Supply chains are complicated, and best practice can vary […]

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