Role Played by ERP In Supply Chain Management – Benefits Of Both ERP and SCM

Enterprises usually depend on several types of IS or Information Systems for handling regular businesses operations. Enterprise Resource Planning (ERP) system, customer relationship management (CRM) systems and Supply Chain Management (SCM) systems are some of them, to name a few. Small and medium sized businesses usually rely on ERP systems to automate all kinds of business operations and unify core business processes to add value and visibility. On the other hand, SCM systems assist organizations to improve relationships with members of the supply chain and with the stakeholders. Hence, the integration between SCM and ERP systems is a key to improve business performance.

Within the last 2 years, both SCM and ERP are gaining momentum across different industries throughout the world. In fact, majority of the companies have started focusing on developing similar software like SCM and ERP. Read on to know the role played by ERP in supply chain management.

Why is an SCM needed?

  • The supply chain management systems manage contractual obligations which make sure that there is constant supply without any kind of disruptions during business hours.
  • SCM strengthens supplier relations for systematic collaboration with suppliers and other lines of businesses.
  • Tackles all kinds of risk and compliance to obey the industry and business specific regulations and compliances.
  • Manages enterprise spending which makes sure that procurement happens through the perfect suppliers where you can reduce business costs

Integrated use of SCM and ERP

Enterprise Resource Planning and SCM systems offer multiple benefits to a company in terms of functionalities and capabilities. The unified approach offers inter-organizational and intra-organizational benefits. With the following considerations, the integration can be made easier and simpler. Here are few points.

  • Considering business priorities: You have to decide which strategy you have to implement first, supply chain or ERP. ERP begins with business and financial workflow and companies start building from here.
  • Technology glitches: Both the SCM and ERP are on the same technological platforms and hence it is easier to execute integration. This decreases time to ROI.
  • Implementation costs: Companies should evaluate and consider the impact of cost of both the systems when they are being integrated.
  • Total ownership costs: There can be savings on costs and can improve user experience if both the system procedures are integrated to reduce data capture points.

Benefits of incorporating SCM systems and ERP

The software development companies usually play a vital role in integrating supply chain systems and ERP. By following few simple rules, companies can boost their chances of success. Here are few benefits to integrate SCM and ERP systems.

  • Better efficiencies boost productivity and reduce costs
  • Better customer retention since it has the capability of providing improved services to customers
  • Better capability of tackling resources through automated workflow
  • Increase of task speed and increase in production by utilizing IT
  • Allows organizations to compete against each other more effectively

Therefore, if you’re thinking of implementing an ERP for your supply chain management system, consider the above mentioned benefits or check out for more information on ERP.

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