What is ERP? What is a supply chain? What is supply chain management? What is a supply chain management system? These terms and concepts not only confuse the general public, but even practitioners who have been involved in related industries for many years may not be able to say clearly what they mean. Today I will explain to you the ERP supply chain management system.
First of all, let’s clarify the concept. Supply chain refers to “the network chain structure formed during the production and distribution process that involves providing products or services to end users.” Supply Chain Management (SCM) refers to “the entire Channels (suppliers, manufacturers, warehouses, distribution centers, channel vendors, etc.) are effectively organized to manage supply and demand, raw material and component procurement, manufacturing and assembly, warehouse and inventory tracking, order entry and management, and distribution And delivery to customers.
ERP (Enterprise Resource Planning) is a set of enterprise management system system standards proposed by the United States Gartner Group Inc.
The relationship between SCM and ERP strong>
ERP was initially applied only in the manufacturing industry, which provided a strong guarantee for manufacturing companies to improve management levels, reduce costs, and shorten delivery times, and then was widely used in other industries.
With the gradual expansion of the scope of ERP applications, its management area has also been continuously extended outwards, and gradually includes logistics management, supply chain management, human resource management, and customer management. With the reduction of business refinement and management granularity, related business areas are subdivided into different management areas. For example: SCM is subdivided in the supply chain field, CRM is subdivided in the market sales field, and so on.
It can be said that SCM is “born” from ERP, and most of the business elements of SCM can be connected with ERP: inquiry list, purchase requisition form, purchase order, incoming inspection order, warehouse receipt, warehouse delivery Bills, production plans … These main documents can be managed both in ERP and SCM.
The three magic weapons, SCM, CRM, and ERP, will together form the engine of the core competitiveness of enterprises in the network age.
There are also professional SCM and CRM software in related professional fields. This article mainly explains the application of supply chain management in ERP.
Basic content of ERP supply chain management strong>
The basic content of supply chain management includes five basic contents of production planning, purchasing, inventory, manufacturing, sales and distribution.
1. Production plan
This is a strategic part of SCM. A good strategy can manage all resources to meet customer needs. A good ERP supply chain management system needs to meet the following aspects:
• It can support the supply chain operation company to grasp the product supply and demand status and inventory index in time, so that the company’s logistics status is more intuitive and transparent;
• Can be unified into the supply plan for unified management according to sales orders or forecast purchase requirements;
• Support MRP operation based on sales order to generate production proposal and purchase proposal
• Support data interaction with external scheduling systems to meet customers’ special business needs
• Built-in report analysis function, which can analyze the profit and loss results of each product, customer group and distribution channel
2. Procurement Management
Provide management of supplier qualifications, establish a set of pricing, distribution and payment processes with suppliers, and based on the diversification of procurement operations, different procurement processes can be performed for different procurement operations.
• Comprehensive supplier relationship management from planning to application, purchase, invoicing and collection, effectively helping dealers to optimize and simplify the operation procurement process
• Comprehensive integration of procurement, logistics, finance and other corporate business processes to improve procurement efficiency and reduce manual repetitive work
• Flexible definition of multi-level approvals, based on abnormal business management, help dealers strengthen procurement control and reduce procurement risks
• Interactive coordination of orders, interfaces with other e-commerce or supplier portals, to achieve electronic business transactions with suppliers, and improve communication efficiency with suppliers
Comprehensively handle inventory management of various receipts, shipments, movements, changes, inventory, etc., support batch number management and tracking, support barcodes and integration with external equipment.
• Establish a complete material file and design a personalized logistics model that meets its own business characteristics, so as to more accurately and accurately reflect the actual inventory business in the system
• Achieve unified management of various inventory businesses, such as: incoming goods receipt, warehouse management, warehouse management, shipping management, inventory counting, inventory relocation, and inventory transfer, and comprehensive management with related business areas , Such as seamless integration of procurement, sales, finance, etc., thereby reducing redundant labor and improving work efficiency;
• Diversified and flexible inventory plans, reasonable planning of inventory business and capital situation, so as to better manage future business;
• Achieve management of batches, serial numbers, and expiration dates of materials, allowing real-time tracking of related materials
• Integrates a variety of logistics equipment interfaces, which can be compatible with collection equipment and automatic sorting equipment such as ordinary barcodes and RFID tags. Through automated task-based and wireless devices, operations reduce repetitive labor and improve the efficiency of inventory operations;
• At the same time, strengthen business collaboration between supply chain networks and business partners.
• Powerful inventory query, analysis and traceability functions, which can accurately query the inventory quantity and storage location of goods at any time, and fully understand the storage capacity of the warehouse.
4. Manufacturing Management
Planning, organizing, directing, coordinating, controlling and evaluating the manufacturing process, including arranging all activities required for production, testing, packaging and preparing for delivery.
• Control of the production process, control all aspects of production and assembly operations, in-process inspection and final inspection, quality process control.
• Reduce production cycles by quickly adjusting production plans to suit current plant conditions.
• Control of material receipt, line-side storage and inventory management
• Grasp the production process and operation feedback:
• Through integration with other workshop management and control systems and equipment, monitor equipment in real time and collect equipment status data
• Provide end-to-end complete solutions for different manufacturing models
• Control the cost of finished products and actuarial costs.
• Increase flexibility through a responsive production planning scenario and reduce lost revenue from stock-outs
5. Sales and distribution
Some people call it “logistics”, which is to adjust the user’s order receipts, establish a warehouse network, send delivery personnel to pick up and deliver to customers, establish a goods pricing system, and receive payments.
• Efficiently manage the process from order to shipment to collection, including from opportunity management, order fulfillment to financial settlement.
• Product availability check Check existing inventory and product supply status according to customer needs to ensure the reliability and accuracy of the confirmed data
• The system can identify overproduction or returns, so it can reduce product-related costs and reuse them to meet new customer needs.
• Meet a variety of different logistics distribution modes, and support accurate, fast, and efficient distribution between multiple suppliers and multiple buyers.
• Real-time scheduling and management of own and cooperative vehicles and temporary vehicles.
• Analysis of cargo, calculation of stowage, and selection of the best transportation route.
• Supports Global Positioning (GPS) and Geographical Graphics System (GIS) to realize vehicle operation monitoring, vehicle scheduling, cost control and bicycle accounting. And provide real-time tracking and query of online vehicles and goods.
The benefits of ERP supply chain management strong>
ERP supply chain management can bring many benefits to enterprises:
• Increase forecast accuracy.
For different customers, products and demand flows, more refined and intelligent segmented management and matching of demand and supply, a parallel planning process that runs automatically and intelligently, improves forecast accuracy, and increases the frequency of planning responses, thereby achieving a more rapid and integrated Plan to delivery.
• Reduce inventory and improve delivery capacity.
Today’s companies are more dependent on each other, making it easier to gain collective competitiveness. ERP supply chain management can help upstream and downstream companies to coordinate inventory management, reduce inventory, and improve inventory turnover.
• Reduce workflow cycles, increase productivity, and reduce supply chain costs.
• Reduce overall procurement costs, shorten production cycles and speed up market response.
The trend of ERP supply chain management: from traditional ERP to smart ERP strong>
From the large and inflexible system of traditional ERP, modern business intelligence is added to meet the needs of digital transformation. Accenture’s 2019 trend analysis identifies five key actions, whether one or more, each business has the ability to dramatically change its business model, and understanding them may help companies guide your Digital transformation.
• Cloud as a modern portal
Make your business core smart and easy to scale
• Work with cloud computing vendors instead of traditional service companies
• Gain insight through fused data
According to data released by Gartner in September 2018, SaaS is expected to achieve strong growth by the end of 2019, reaching $ 85 billion, a growth rate of 17.8% over the previous year. The SaaS cloud application service market will reach $ 113.1 billion in 2021. Revenues of $ 58.8 billion in 2017 nearly tripled.
The upgrade of ERP supply chain management to the cloud management model is inevitable. SAP products provide a broad portfolio of solutions (from SAP S / 4HANA to SAP Leonardo) that use new technologies to help companies run smart logistics and supply chain management processes.
Big data strong>
• Provide intelligent data analysis, operation optimization, launch decision, precision marketing, competitive product analysis and other integrated marketing services for enterprises through the analysis and prediction capabilities of big data
• Big data analytics can improve visibility, allowing people to more intuitively know where things are, where they should be, and what’s wrong with the system
Blockchain technology strong>
Blockchain technology is added to supply chain management to create a more efficient and transparent supply chain environment.
Internet of Things strong>
“Internet of Things” and radio frequency technology (RFID) have become the third revolution in the global information industry, and have been gradually and widely used in various fields. Although the development of the Internet of Things is still in its infancy, all aspects of supply chain management are greatly affected. With the continuous development of the Internet of Things and RFID technology and the deepening of theoretical research, the Internet of Things will change the operation mode of supply chain management and realize intelligent and visual management of the supply chain.
• Cloud, hybrid or on-premises
• Warehouse automation and IoT connection
• Inbound and outbound processing
• Warehouse and inventory management
Artificial intelligence and machine learning strong>
Machine learning techniques guide computers to use data for autonomous learning (rather than through explicit programming) to perform tasks.
Machine learning uses complex algorithms to learn from large amounts of big data. Use artificial intelligence and machine learning to optimize the ERP supply chain management environment and guide companies to establish a more comprehensive and efficient supply chain management system, such as Amazon’s personalized product recommendation function, Facebook’s face recognition function, and the fastest route in Google Maps Recommended
Utilize the Internet to integrate the upstream and downstream enterprises, with the center manufacturer as the core, and integrate the upstream industrial raw material and spare parts suppliers, downstream industrial distributors, logistics transporters, product service providers, and correspondent banks into one. Complete e-commerce supply chain for end customers. The purpose is to reduce procurement costs and logistics costs, improve the response speed of enterprises to the market and the needs of end customers, and thereby improve the market competitiveness of enterprise products.
Well, my explanation ends here. I hope that through my explanation, everyone can understand the concept of ERP supply chain management system, its basic content, its benefits and future development trends. Thank you.
This article "Analysis of ERP supply chain management system" by AcloudEAR. We focus on business applications such as cloud ERP.
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