Enterprise resource planning (ERP) software has been utilized in a broad cross-section of industry, including marketing and sales, shipping and payment, inventory management, manufacturing or service delivery, and product planning cost. In particular, distribution organizations realize tremendous benefits from adopting an ERP software solution. Following are key benefits:
One of the most important benefits of ERP is the ability for distribution managers to visualize product flows clearly. The ability to conceptualize and optimize complex distribution patterns is often considered the core of distribution management. Managers use the visibility afforded by ERP to track each step in the process, from supplier tracking to final product delivery. A key benefit of virtualizing distribution flow is the ability for managers to identify bottlenecks and to solve throughput problems. It also identifies bloated areas of the supply chain allowing managers to increase flow efficiency.
Parts suppliers are under increasing pressure to account for delivery throughput and to identify lots or individual parts in case of quality issues. If customers find a bad lot, they expect suppliers to be able to isolate the lot and identify the root problem. Traceability can also help flow from multiple sources or destinations, in order to identify bottlenecks in particular branches.
Planning and Forecasting
Many companies implement enterprise resource planning primarily to improve their ability to plan new distribution channels and to accurately forecast planned channel throughput. The iterative process of forecasting can be very difficult when performed manually on paper. Automated ERP solutions allow managers to easily develop scenarios, and then to make adjustments for improved efficiency.
Automation Reduces Errors
An automated ERP solution takes the human factor out of the tedious part of distribution design. This means fewer errors, more accurate control, and improved customer satisfaction.
The ability of ERP to improve channel efficiencies will result in reduced costs. As an example, when ERP improves quality issues, it allows reduced replacement inventory and the associated costs. Similarly, more accurate forecasting allows managers to reduce the level of inventory safety buffers.
Develop Customer Relations
Customers benefit as well when a company adopts ERP. ERP can provide essential supplier information across a myriad of business units. The automated solution improves lead times for access to this information. Some ERP solutions offer a specific customer experience allowing users to interact with the facilities. As ERP moves to the cloud, both the client company and the customers can work in a collaborative environment. Mobile access increases the availability of information and collaboration. Integration with social media allows a familiar context for marketing and sales channels.