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ERP and Supply Chain Trends

Like most business tools, enterprise resource planning (ERP) software is always getting more useful, efficient and powerful. The latest technologies in ERPs are cloud-based. In the cloud, businesses can access their data from any device, anywhere in the world. The modern ERP system integrates many aspects of supply chain management. It can streamline demand planning, procurement, manufacturing, warehousing and shipping alike.

ERPs are also becoming more specialized. As technology evolves, developers have redirected ERPs for the particular needs of various supply chain ecosystems. For example, an¬†ERP solves many apparel companies’ needs¬†by organizing decoration, intuitively managing wholesale orders and tracking inventory by style, size and color.

With all the recent advancements and ever-changing features, it’s crucial to stay ahead of the curve with ERP trends. Understanding the many options and best practices for ERPs means your company can be more strategic when choosing a software provider. Then, you can partner with the innovators in the industry. Since cloud-based software updates automatically, you should anticipate your ERP’s new features to take advantage of them sooner. ERP software can be a significant investment. Knowing all the features available and prioritizing the ones that make the most sense for your business is critical.

ERP in Supply Chain Management

An enterprise resource planning tool allows a company to track and assign resources on the enterprise level. Allocating separate budgets to disconnected departments could leave a company with duplicate or unnecessary supplies. An ERP provides data on the whole company’s available resources to avoid this. Warehouses, manufacturers and other companies with strategic supply chains manage goods beyond internal resources and need more functionality from an ERP.

An ERP with supply chain management connects suppliers in the network for more accurate data and smoother operations. ERP users receive the most-up-to-date vendor contact information alongside delivery and production schedules at their fingertips. Supply chain managers can predict demand as orders arrive. They can also schedule jobs, reduce inventory and replenish resources just in time.

ERP offers many capabilities to simplify and bolster supply chain management. Logistics leaders apply the software for:

  • Demand planning:¬†It’s one thing to plan your production schedule based on previous sales cycles and assuming a continuing pattern. An ERP’s demand planning features incorporate your point-of-sale (POS) data for pinpoint-accurate demand forecasting. It will also convey real-time inventory data to allow manufacturers to restock raw materials or warehouses to replenish merchandise before they run low. You can see resources in-stock or in-process and finished goods ready to ship. With a delivery overview, you can schedule jobs promptly for when all materials arrive.
  • Procurement:¬†An ERP provides the purchasing team with data for sourcing and restocking decisions. They can access current customer orders and inventory demand forecasts in real time. With current contact information and live vendor performance data and costing at the ready, ordering materials is simple. Some ERPs even offer a vendor portal to streamline real-time communication with suppliers.
  • Inventory management:¬†Maintaining a steady supply of resources without bulking up your warehousing footprint is easier with an ERP. Minimize stock-outs and safety stock levels alike with end-to-end inventory tracking.
  • Production:¬†Create bills of materials, manage work orders and track jobs in process and completion times from one platform. Your production managers can streamline the supply chain by scheduling work based on a complete overview of manufacturing operations, customer demand and planned deliveries.
  • Shipment:¬†You can also schedule outbound shipping for faster delivery to customers. With a complete production schedule and real-time job completion data, your logistics manager can schedule a pickup as soon as a job is completed. Once items ship out, the ERP creates an invoice and even sends it to the customer, if desired. Meanwhile, an ERP can also can track on-time delivery ratios to improve performance.
  • Supplier communications:¬†When vendors, management and operational staff aren’t on the same page, your supply chain can get clogged. An ERP prevents this since every party accesses the same reliable data. An electronic data interchange (EDI) and an intuitive vendor portal simplify supplier management.

Benefits of ERP in Supply Chain Management

An ERP offers many strategic advantages for supply chain management. The automation of critical processes and live feed of delivery, inventory and production data make the supply chain more productive. It can improve efficiency across departments, from procurement and logistics to manufacturing and warehousing. You’ll experience measurable benefits in the form of lower safety stock levels, faster job completion and better communication.

Some of the advantages you’ll notice include:

  • Leaner inventory:¬†Demand forecasting and real-time stock-level tracking give you visibility and control over inventory management. You know quickly when stock levels are dwindling and can replenish them right away to prevent out-of-stock situations. By extension, you can tighten your inventory without worrying about running out when you need it most.
  • Fewer bottlenecks:¬†Because ERPs enable the flow of accurate data between suppliers and internal teams, they clear up congestion and stoppages in the flow of supplies, too. Suppliers deliver raw materials by their deadlines and get paid on-time. Logistics managers can anticipate deliveries and plan to ship finished goods as soon as possible.
  • Total supply chain visibility:¬†Logistics and operations executives, the accounting team and all company departments can get a clear window into the supply chain, inventory levels and other critical data. For example, you can see when a supplier can’t deliver on time. This information can fuel smarter business decisions and better collaboration with strategic suppliers.
  • Faster decision making:¬†Live data enables real-time solutions. For example, if point-of-sale data tells you demand for one product is declining, you can reduce stock before you’re stuck with inventory you can’t move. Likewise, if you know a material delivery will arrive at a particular time, you can schedule production right when the supplies arrive to use resources efficiently.
  • More flexibility:¬†With a robust database of your suppliers and their ability to fulfill your orders, you can quickly pivot to new vendors. If one cannot supply goods on-time at a price you approve, you can find another who can and send the purchase order right away.

5 Trends in ERP and Supply Chain Management

As software developers and logistics managers alike seek to improve their businesses, several new ERP trends have converged with the latest trends in supply chains. For the most part, ERPs have rolled out new features and increased their agility. They must respond to the constant disruption cycles that have hit every industry’s supply network. They now feature new capabilities for e-commerce and cloud connectivity, helping industry leaders achieve their goals.

The future of ERPs for supply chains points toward artificial intelligence (AI). As the manufacturing sector’s Internet of Things (IoT) advances, we expect innovative ERPs to speak directly with manufacturing equipment. More of the supply chain management process can then be automated, too. Once the equipment itself can track inventory in-process and completed jobs, the ERP will maintain a more accurate live stock count. As AI abilities become realized, the traditional¬†ERP will move to the iERP, or intelligent ERP, which applies machine learning.

Undoubtedly, supply chain trends are driving innovation for their connected software. The future is bright, and we already see some major technological advances transforming the industry. The five ERP trends we’re most excited about include:

1. Increase in Automation Capabilities

In warehouse, manufacturing and operational management, the name of the game is automation. The more that works automatically, the leaner the supply chain team can be. Automation is particularly important in these industries due to the widening skills gap. With talent stretched thin and cost reduction gaining priority, more warehouse management teams turn to automation. In 2019, 23% of warehouse managers planned to implement automation, compared to 15% in the previous year.

With 45% acknowledging the need for improved information technology infrastructure, accurate data plays a huge role. Processes from inventory tracking to job scheduling need to be informed by real-time data. A purchase order for replenished raw materials can’t send automatically without precise stock counts and demand forecasting. It also needs up-to-date vendor contact information and costs. You can’t automatically generate a production schedule without a bill of materials and an overview of upcoming material deliveries and customer deadlines.

An ERP lets all these functionalities and improvements become a reality. Because of the ERP’s status as a trusted data aggregator, automation will become increasingly intertwined. In the future, software developers will amp up their products’ automation capabilities and make it easier to integrate ERPs with other automation software.

2. Optimized Omnichannel Fulfillment

Omnichannel selling has been on the rise for several years. Customers want a seamless selling experience between shopping online and shopping in-store. This reality is even more pressing in the apparel landscape. Customers expect social media posts of perfectly styled outfits to take them to checkout in just a few clicks. They want to find retailers on marketplaces, in-person and on their own websites. When shopping online, they expect fast delivery and the ability to track their order.

The demands of the B2C apparel market are quickly transferring to the wholesale landscape, too. Many customers, who need to keep up with their own demand, want to track their orders throughout the manufacturing and shipping process. With all the requirements of omnichannel selling, an ERP has the potential for innovative solutions.

Once, ERPs were considered “back office” systems. Now, they are quickly¬†evolving into a tool¬†to drive omnichannel fulfillment. They have many integration options, allowing them to work alongside many POS software and system providers. They’re also increasingly evolving to incorporate distributed order management (DOM) systems. They can use automation to choose the best fulfillment options and locations for every customer order. These emerging ERP trends, alongside more robust analytics, will turn an ERP into a critical supply chain management tool.

3. Smart Responses to the Shortened Disruption Cycle

The apparel industry, and any trade with a complex demand chain, always faces new disruptions and challenges. Today, some of the roadblocks to effective supply chain management include ever-shortening lead times and the expansion of e-commerce combined with the shrinkage of in-store traffic. As inventory management grows leaner, stock managers have to keep up with more orders in smaller quantities. As disruptions surmount, ERP users need more responsive and agile technology. The rapid rollout of new features is a top priority for customers seeking an ERP vendor.

Some ERP software has adapted with personalization. Instead of developing an advanced suite of features to combat the unique disruptions in every industry, they specialize. An ERP solution that prioritizes the needs of a particular industry can better respond to those market disruptions. That’s the philosophy we’ve adopted at FDM4. Our ERP software puts apparel supply chains first. We offer solutions like inventory tracking segmented by color, style and size, and resource management for decoration.

4. Migration From Legacy Technology to the Cloud

The ERP trends in 2020 put the cloud first. Across all breeds of business software, cloud-based solutions prevail. It’s no longer a trend. Instead, it’s the industry standard. While the cloud is the norm, integrating more tech with the cloud is the future for ERPs. In the supply chain, manufacturing and logistics landscape, the legacy technology is catching up. While it’s expected that an ERP solution will be cloud-based, it’s still relatively new to have manufacturing equipment connected to the cloud. As supply chain managers swap out their outdated technology for IoT-enabled equipment, it’s opening new doors for cloud technology.

An ERP that encompasses real-time data directly from the machines under its purview will be more accurate. It can also do more with the data, incorporating more advanced predictive analytics. In supply-chain-centric businesses, IoT devices can fuse shipping, logistics, performance and maintenance data. The ERP can then enable predictive maintenance as well as faster delivery and better supplier performance.

5. Speed, Growth and Cost-Reduction

The top three goals most supply chain managers will pursue in the coming years are speed, growth and cost reduction. Speed comes out of necessity, as customers demand progressively shorter wait times. An ERP can speed up delivery times with better production data. By comparing scheduled completion dates, a logistics manager can then schedule pickups. The ERP can also house data on various transportation vendors to aid the selection of the fastest carrier.

As supply chain managers achieve faster speeds, their strategy has shifted toward growth and cost reduction. They aim to add more selling channels and expand e-commerce. At the same time, they’ll reel in costs and make the supplier ecosystem more efficient. An ERP can assist with this, too. By automating critical processes like inventory tracking, it can significantly reduce costs. For example, FDM4’s users have¬†experienced a 60% improvement¬†in efficiency. Also, by storing current cost information for many vendors, your purchasing team can always choose the best price to lower inventory expenses.

Integrate an ERP With Your Supply Chain

A powerful, intuitive ERP can transform your supply chain. By aggregating all the data you need to make smart decisions, an ERP can improve your supply chain’s productivity, effectiveness and organization. When you plan how you use resources, they can travel more efficiently through each link in your demand chain with reduced bottlenecks.

If you want to learn more about implementing an ERP solution for your supply chain, FDM4 can help. We offer robust cloud-based ERP software for both apparel and non-apparel applications. Learn more about the tools and¬†features available through our ERP¬†and find a solution that’s right for you.

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