Supply chain management can be a drag on business productivity and profitability for small-to-midsize businesses, especially with the pandemic, labor shortages, and supply shortages causing major disruptions. There is a way for manufacturing and other businesses to get a handle on it, however, and it is through enterprise resource management solutions.
First, consider these statistics:
97% of manufacturers report supply chain management consumes a significant amount of employees’ time. (Fictive 2021 State of Manufacturing Report)
94% of manufacturers report concerns about their current supply chains (Fictive 2021 State of Manufacturing Report)
79% of companies with high-performing supply chains achieve revenue growth greater than the average within their industries whereas business with optimized supply chains have 15% lower supply chain costs , less than 50% of inventory holdings and 3X faster cash to cash cycles. (Invesp The State of Supply Chain Management)
81% of supply chain professionals say analytics will be important in reducing landed costs, yet 63% of companies do not use any technology to monitor their supply chain performance. (Invesp The State of Supply Chain Management)
57% of businesses have poor visibility across their supply chain. (Invesp The State of Supply Chain Management)
So what are the roles for ERP in understanding and optimizing the supply chain management process for more predictable and profitable operations?
- Visibility and Monitoring: ERP solutions consolidate supply chain operations including all vendor and shipment data, for visibility through instantly accessible dashboards. They allow for continuous monitoring of real-time data, alerts when there is a problem or delay, and the resulting capability to then coordinate alternatives with suppliers and vendors.
- Planning: In small-to-midsize companies, it’s common for certain decision-makers to wear supply chain hats, but they are not supply chain experts, and they are used to operating in these capacities when logistics are running smoothly. When there are disruptions, integrated ERP solutions enable automated and simplified communications across departments. For example, internal marketing and stock purchasing functions can communicate with external suppliers to ensure a steady flow of goods in order to meet demand.
- Combining workflows: Orders to vendors and suppliers coming from different parts of a business create unnecessary delays and confusion. Poor communication between warehouse, transportation, and vendors can also be streamlined or automated to expedite processes that had previously been disjointed. For many of our customers, the supply chain crisis has been a catalyst to invest in ERP in order to bring this efficiency to the supply chain.
- Automating supply chain processes: SMBs operating without ERP are increasingly at a loss, as their vendors, suppliers, and customers have become used to their manufacturers and distributors ERP solutions automating bill of materials, invoice creation, shipping documentation, and even quality assurance checks. ERP solutions can even be set up to keep production aligned with demand and automate job scheduling and raw material and product delivery throughout the supply chain.
- Performance measurement: ERP solutions offer data performance compilation and reporting tools so that executives can use key performance indicators over time to monitor and continually improve performance. When there are variances, there is no guesswork; it’s easy to pinpoint and correct problems as they happen, and to make incremental performance improvements over time.
ERP brings greater speed and efficiency to SMB supply chain operations. The integration of all supply chain management processes through ERP can enable streamlined teams to achieve optimal performance, even in sub-optimal conditions.
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