A healthy supply chain keeps your inventory stocked at just the right level while making sure your customers’ needs are met. It gives you the agility and flexibility to plan new product launches and stay one step ahead of customer demand. So how exactly does ERP software help with this, and how can your business benefit?
To begin, let’s take a look at the three distinct levels of supply chain management so we can start to build an understanding of how ERP can optimise the entire process.
What are the three levels of supply chain management?
This relates to the long-term decision-making of the supply chain management process. At this level, you will decide how you will create, nurture and grow your network of suppliers and partners, as well as strategise long-term improvements and innovations to the chain. This level of management requires the most foresight and the most long-term vision as you plan the future developmental journey of the supply chain.
Tactical management is more concerned with the short-term decision-making process, implementing changes and making calls that have an impact on a tactical level. These changes are deployed in accordance with customer demand and geared towards achieving optimal end value from customer interactions. This level of supply chain management might include things like drafting short-term production schedules or new contracts for material procurement.
At the operational level, management tasks involve handling micro-processes and decisions that affect the supply chain on a day-to-day or a weekly level. This includes forecasting for the week ahead – or even simply the day ahead when supply chain sprints are required – keeping on top of logistics or dealing with any supplier issues that may arise from damaged items or returns within the supply chain.
How does ERP software help to optimise each of these levels?
With the three levels identified, it’s time to take a closer look at how ERP solutions can help businesses to leverage advantages at each stage.
Optimising strategic planning with ERP
- Achieve long-term forecasts and operational models that provide accurate predictions – As you forecast further and further into the future, you need to be able to rely on the data you are using. ERP solutions provide a strong foundation for achieving just this.
- Manage relationships with suppliers and partners, keeping all their data in one place – Integrated data across the whole solution makes it easy to keep track of relationships with key figures and organisations. Handle management tasks relating to individual suppliers or partners, and achieve a holistic viewpoint across your whole network as you see fit.
- Model potential improvements and increased efficiencies – With forecasting and modelling capabilities built into the platform, business owners and senior managers can eliminate much of the guesswork and trial and error that comes with improving processes and increasing efficiency.
Optimising tactical management with ERP
- Quickly identify material needs – Identifying material needs from specific suppliers, placing orders and replenishing inventory ahead of time, and keeping track of how needs shift are key to the tactical management phase. Enterprise resource management (ERP) solutions are designed with this in mind, and they will give you and your team the capability you need to get the most from your suppliers and to build partner relationships that provide mutual benefit.
- Manage customer interaction and demand – As well as your materials, you need to keep on top of managing your customer base, particularly as this base expands. You will find that the platform helps you to build a strong understanding of your customers and clients, giving you a data resource you can draw upon as you predict increases and decreases in demand. Stay one step ahead when it comes to your customers’ needs and deliver what they need time and time again.
- Handle the data required to implement short-term changes – Tactical management is a data and resource-intensive phase of supply chain management. You need to be able to draw on accurate and timely data to make effective short to mid-term changes within your operations. With the right solution, this is easy to achieve.
Optimising the operational level with ERP
- Achieve real-time data flow and integration – Your ERP solution will integrate with your data sources, providing real-time insight and knowledge to your team. This can then be utilised to make swift, effective decisions based on acute needs.
- Manage ongoing plans across a number of timescales – Operational level management requires different plans working alongside one another on a daily or weekly basis, and beyond. The ERP solution gives you a platform upon which to keep on top of these plans effectively.
- Gain insight into item damage and wastage – If items are being damaged or need to be returned on a regular basis, you need to be able to draw upon the right data in order to reach a resolution with the supplier. And, of course, the ERP solution is capable of this. However, the ERP solution goes even further, providing necessary insight into the day-to-day practices or procedures that may be leading to damages in the first place. Reducing this will boost efficiency and help to control costs.
Building a foundation of knowledge, capability and flexibility
ERP solutions offer many advantages during the process of supply chain management, but all of these advantages boil down to two core elements: data handling and integration. The solution gives business owners the capability to draw upon data in ever-increasing volumes and not be overwhelmed. At the same time, business owners can achieve integration between processes, datasets, remote teams, IoT devices or any other elements that are deployed within the supply chain.
In other words, the right ERP solution can provide businesses with a fool proof and future-centred approach to supply chain management.
Want to find out more about the capabilities of Epicor ERP for your manufacturing business? Have you checked out our pages for Engineer to Order, Configure to Order and Manufacture to Install businesses?
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