Enterprise Resource Planning Production and Supply Chain Management
Overview
Over the past few decades, organizations have been deploying smart business automation software to enhance productivity, gain operational efficiency, and achieve profitability. Today, world-class organizations use ERP software for supply chain management (SCM) to integrate various disparate systems, manage business information, gain efficiency, and streamline workflows (Kurbel, 2016). The building blocks of SCM are demand planning, strategic planning, supply planning, warehousing, procurement, order fulfilment, production, and transportation business processes. Due to the need to improve efficiency, the commitment to automate and streamline the SCM business processes have necessitated the need for ERP modules deployment. This paper explains the production and SCM processes from an ERP perspective.
Functions of the Production and Supply Chain Management Modules of ERP System
These SCM modules of ERP systems include salesforce automation, central inventory management, customer relations management (CRM), and sales, invoicing, and dispatch, among others.
Salesforce automation: The salesforce automation ERP module of SCM enhances product configuration, order management, sales prediction, quotation accuracies and efficiencies, lead management, and contract management (Yang & Su, 2009). Also, ERP modules of SCM allows the logistics team to track sales order status, process sales order reports, track payments and do sales performance analysis in an automated manner.
Central inventory management: The central inventory SCM module of ERP ensures accurate tracking of inventory and management of the distribution process….
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Why ERP is Vital in Creating Overall Efficiencies and the Supply Chain Management Process
ERP systems, as a smart business automation software, play a useful role in enhancing the operational efficiencies, especially in the SCM business processes. To remain agile, organizations have to invest in ERP systems. The primary reasons why ERP systems are vital in creating overall efficiencies in the SCM processes are to save costs, improve supply chain network, enhance collaboration, minimize wastages and delays, and to automate the internal SCM processes of the organization (Ho, 2007).
In the SCM business processes, ERP systems function by automating and improving visibility of SCM modules – from salesforce automation, customer relations management, inventory management, order management – to streamline information sharing and operational efficiencies (Kurbel, 2016). To supply chain management, the key benefit is that, by automating internal processes, organizations can utilize an ERP system to boost the manner they interact with suppliers, customers, and other stakeholders. Besides, for an ERP system to produce actual value, it is vital to properly integrate it with additional external systems to achieve end-to-end automation. For example, manually inputting data from a different marketplace or platform, like eBay or Amazon, into an ERP system automatically eliminates a multiple of internal efficiencies it…
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Process for Entering and Processing Production Planning Data in ERP System
Routing: Routing is the first stage, and determines “what,” “where,” “how,” “how much,” and “with which” to produce. In Amazon, for example, the routing process is applied to fix and track the quantity and quality of product or service, the resources to use in production (materials, people, or machines), the production sequence, number of resources to use, production line, and the production place (Ho, 2007). Routing is a continuous process; thus, the ERP system helps to ensure automation of production planning.
Scheduling: In the process of entering and processing production data, the machinery, materials, and parts have to be programmed. According to (Yang & Su, 2009), scheduling fixes the amount of work required to be completed, plans the various manufacturing operations in an orderly manner based on priority, and in setting the starting and completing date for each production activity. ERP system, therefore, ensures timely scheduling and completion of the production…Place Order….
How Information can be shared with Suppliers to Increase Supply Chain Efficiency
The concepts of supply chain integration and collaboration can be powerful tools for sharing information with suppliers to raise SCM efficiency. According to (Kurbel, 2016), an integrated SCM is an ERP module that allows an organization to communicate and create positive relationships with its suppliers and other key stakeholders. With the supply chain integration system, all the parties involve in order fulfilment are integrated into a single system. With a unique system, coordination and alignment become seamless, and this contributes to the smooth flow of information from one party to another (Yang & Su, 2009). In the context of information sharing, supply chain integration can allow a business to:
- Create a responsive, nimble production network
- Raise accountability and transparency in the supply and flow of materials
- Ensure end-to-end integration of dynamic supply chain networks into a single system
- Ensure real-time communication about product and materials Information in the SCM network
The other approach is collaboration, which involves working together to come up with the most efficient strategies for executing SCM processes in the supply chain (Kurbel, 2016). The benefits of using collaboration to share Information with suppliers include:
- Time saving and reliable
- Improves supplier operations efficiencies
- Allows product offerings and quality customization
- Eliminates loss of materials in the SCM during the delivery process
Conclusion
The paper has explained the concept of production and supply chain management in the context of ERP systems. ERP for supply chain management enables organizations to gain operational efficiency, achieve profitability, and enhance productivity. Today, world-class organizations are using ERP software to manage business information, streamline workflows, integrate various disparate systems, and achieve efficiency.
References
Ho, C.-J. (2007). Measuring system performance of an ERP-based supply chain. International Journal of Production Research, 45(6), 1255-1277.
Kurbel, K. E. (2016). Enterprise resource planning and supply chain management. Berlin: Springer.
Yang, C., & Su, Y. F. (2009). The relationship between benefits of ERP systems implementation and its impacts on firm performance of SCM. Journal of Enterprise Information Management, 8(1), 10-16.