Enterprise Resource Planning in SCM


Inthe current business trends, companies are working around the clock to minimizethe cost of production through reduced backlogs of demands, holding cost ofinventories, and ensure optimized transportation process. This will ensure thatthe performance of the venture increases as well as the profits from largesales. Therefore, businesses have opted to apply technologies like enterpriseresource planning, (ERP) in management of inventories ordering process andforecasting of demand.

ERPis an automated supply chain management system that has ability to integratedifferent processes in an organization, which are them controlled from a singleinformation center. The systems optimizes the supply processes such that thecost incurred from different suppliers and distributor channels are greatlyreduced since the goods are only unilateral simplified means. Besides, thesystem eliminates time wastage between the origin of goods and destination.This ensures that the goods reach the targeted market in time, which alsoprevents backlogs in the market. As a result, consumers are able to get theirgoods and services in time and hence meet their needs. From the fact thatmanual supply chain systems requires operations of different departments suchas factories, transport, warehouse, and market, which is very difficult andrequire competent staff and a lot of effort in order to ensure smooth supply.

TheERP systems focus on all the processes involved in supply chain such asinventory, purchase, materials, and transportation management,

Effects of technology on the company

Inthe market, it is important to determine the demand of goods from the targetmarket so that a company can produce or order optimum quantities and avoiddelayed deliveries or inventories holding costs from oversupply in the market.Hence, the company must carry out forecasting that is accurate and plan forfuture demand.  ERP helps to simulatedemand in the market based on the past data as well as the trends of the supplyin time series. This ensures that the company is able to supply the rightquantity of goods and services in the market at a given market period.

ERPtechnology is simple and easy to integrate in the existing business informationsystems thus it is affordable to small, intermediate and largeenterprises.  Moreover, in the long-termthe return on capital and investment will be greatly increased thus promptingthe company to increase its competitive advantage through reduced cost ofproduction and prices.

Technology impacts on the consumers

TheERP business trend will have a positive impact on the customers since; therewill be enhanced supply process thus the goods will reach them in time in themarket. Besides, the system will ensure that there is no shortage of goods andservices in the market and thus meeting the consumers’ expectations. Since thesystem reduces the cost of productions and supply chain, consumer prices willbe reduced greatly thus making goods and services in the market affordable.

Inconclusion, the integration of ERP technology in business will have greatimpact not only on the consumers but also on the company, which will improvethe business performance and consumer output. Therefore, it is important forcompanies to embrace new technologies through implementation of the systems intheir information technologies thus easing business operations that will reducecost of goods as well and ensure quality consumer services and timely delivery.

Rashed Al Sheikh

I work on startups, eCommerce platforms, and game studio projects that aim to generate high revenues. We try to bring technology products that solve problems and enhance capabilities. The recipe for succeeding is knowing your demographics, your audience, why people need your services, and the economics of your place, Founder of GrinderScape which compelled over 1M registered members, and 15,000 unique daily logins. I also work and focus on real estate and cryptocurrency investments on the side.