Do I need an ERP to help me manage my Supply Chain?
Supply chain management is crucial for any business that relies on a network of suppliers and partners to produce, distribute, and sell its products. As a growing company, having an enterprise resource planning (ERP) system with robust supply chain functionality can help you handle your supply chain's complexity while supporting your growth and efficiency goals. Here are some key considerations to keep in mind when evaluating the supply chain functionality of an ERP system.
Integration with Other Systems: The Key to Smooth Data Flow
Integration with other systems is critical for seamless data flow and informed decision-making. Your ERP should be able to integrate with other systems you use, such as your customer relationship management (CRM) software, warehouse management system (WMS), and transportation management system (TMS). Integration between these systems can help ensure that data flows smoothly and is up-to-date, enabling you to make informed decisions based on accurate information.
Introducing new software that does not integrate with existing systems introduces a data silo and will likely create as many problems as the system aims to solve. While many analytical systems used for insights and reporting are batch-based, supply chain work needs near-real-time visibility to truly understand the state of the business. Ensuring systems are natively integrated can remove a significant implementation burden on you and your team.
Inventory Management: The Backbone of Supply Chain Functionality
Inventory management is an essential function of your ERP system. Your ERP should be able to track inventory levels in real time, monitor stock movements across your supply chain, and forecast demand based on historical data and market trends. This functionality will help you optimize inventory levels, reduce stockouts and overstocking, and improve efficiency. You can better manage your supply chain and improve your business performance with accurate inventory data.
Accurate inventory management also lays the foundation for truly understanding your inventory costs. For example, if you have a pair of shoes that have been on the shelf for many months, there is a point where it makes more sense to discount it over continuing to store it with the hopes of selling it. Having this data in one system makes it more likely that you can calculate this number accurately.
Demand Planning and Forecasting: Ensuring Accurate Supply Chain Management
Your ERP should have tools that enable you to forecast demand based on historical sales data, seasonality, and other factors. Accurate demand forecasting can help you plan your inventory levels, production schedules, and purchasing orders more effectively, improving customer satisfaction and overall business performance.
It's important, too, that this system be able to accept arbitrary inputs, like planned marketing spend or upcoming promotional campaigns. There is no worse customer experience than sending a marketing email for a completely sold-out good.
Purchase Order Management: Streamlining Procurement Processes
Purchase order management is also an important function to consider. Your ERP should have robust purchase order management functionality that enables you to automate and streamline your procurement processes. This should include automatic PO creation, supplier performance tracking, and approval workflows. By automating your purchase order process, you can reduce manual errors, save time and money, and ensure that your procurement processes are streamlined.
Tracking shipments, spending insights, and COGS management all start with a consolidated data model with information in one system. Tracking shipments in isolation from the cost of those shipments fails to empower brands to know if their margins are truly getting better purchase order over purchase order.
Production Planning and Scheduling: Optimizing Your Production Process
Production planning and scheduling are critical functions for companies that produce physical goods. By managing your production process more efficiently, you can reduce lead times, improve quality, and increase throughput. Your ERP should have functionality that can handle production planning and scheduling, including bill of materials (BOM) management, work order creation, capacity planning, and scheduling tools.
Choosing the Right ERP for Your Company's Supply Chain Needs
Having an ERP system with robust supply chain functionality can help you manage your supply chain's complexity while supporting your growth and efficiency goals. When evaluating an ERP system, consider integrating with other systems, inventory management, purchase order management, demand planning and forecasting, production planning and scheduling, and logistics and transportation management. By carefully evaluating these functions, you can select an ERP system to help you manage your supply chain more efficiently, improving business performance and customer satisfaction.
At Turbine, we're building financial technology for companies with physical inventory to better serve Supply Chain teams with cross-functional workflows like procurement, demand planning, and inventory management. These problems deserve a product that benefits everyone - not just one set of users.
If your Supply Chain processes feel like they're working against you instead of for you, we'd love to chat. Sign up for our waitlist, or drop us a note at hello@helloturbine.com.
