The capabilities of ERP to facilitate and improve the entire work of the logistics department have convinced many business leaders. The global ERP market generated $148.27 billion in 2021. This figure is likely to explode in 2025 and could reach $202.28 billion according to a study by The Business Research Company. But what is it really about? How can this tool improve logistics?
What is an ERP?
ERP, Enterprise Resources Planning, is a tool that facilitates the organization of operational services within a company from the supply of raw materials to the delivery of the finished product. This software stores in one place all the data related to the production chain such as manufacturing, purchasing, sales, human resources and logistics.
Centralizing data facilitates the coordination of different teams, facilitates communication between departments and considerably reduces the risk of errors. It is also a valuable decision-making tool. It is also configurable and can be adapted to the specificities of all sectors and to the operating mode of all companies.
What is logistics?
Logistics appeared in the military field where it designated the way of supplying the troops. This term now refers to the management of the storage of products and their transport in accordance with a set of specifications. To guarantee customer satisfaction, but also to better control costs and especially to face an ever increasing competition, a company must optimize its logistics. Logistics can have a medium and long term objective to maximize production and storage or a short term objective to better manage the daily physical flows. In any case, a good management is essential. To help you, you can turn to an ERP software.
How can an ERP optimize your logistics?
Among the advantages of an ERP system for the logistics department of a company are:
Better inventory management
An ERP tool can list and sort both raw materials and finished goods for inventory visibility. It also records inventory history. This data is useful to establish the sales trend and thus determine the ideal time to restock. This is essential to avoid stock-outs or overproduction. A structured supply plan also helps to control handling costs.
Distribution optimization
An enterprise resource planning system also provides better control over the distribution of goods. It serves as a link between carriers and coordinators and provides traffic information to ensure on-time shipping. On-time delivery is essential to ensure customer satisfaction. An ERP tool also has various functionalities related to sales, delivery and invoicing.
Other ERP functionalities
An ERP software is a very complete tool that can also help you in:
Personnel management
All information about your staff is stored in the ERP software database. It also allows you to manage their schedules, their break times and informs you about the location of your employees at a given time. You also have access to the staff list and can thus better manage absences. This tool also guarantees a good management of raises and bonuses, but also of permanent and seasonal employees.
Control of merchandise transfers
An ERP tool allows you to create a document with information on stock movements. This feature prevents unpleasant surprises, since the precise location of the goods, especially the department where they are stored, is clearly indicated. In addition to the destination of the goods, the logistics software also records the warehouse where the goods are collected. Once the order is completed, the stock is automatically updated. This tool thus facilitates the inventory management of all remote warehouses. It is also able to provide key indicators such as the replenishment rate and the profit margin.
Accounting
Far from replacing the software used by the accounting department, the accounting module of an ERP solution allows for the management of cash and accounts receivable. It also has an analytical function and can integrate a payment management function.
ERP and WMS
The WMS or Warehouse Management System is used to optimize the flow of goods and data, and therefore the management of stocks. In terms of logistics, this warehouse management system is more advanced than the ERP tool insofar as it allows for real-time updating of stock, optimization of the operator’s route for storing the product in the shelves or its collection. It is also useful for preparation and labeling. However, the WMS cannot entirely replace an ERP system. It cannot receive orders and does not handle supplier invoices or payments. Nevertheless, a WMS software can be integrated with an ERP system for better results.
Integrate a CRM with your ERP to better serve your customers
The WMS is not the only tool that can be grafted to an ERP software. Its database can also be crossed with that of a CRM software. The CRM is a customer management software. It records all customer data. This information is valuable because it allows you to develop actions to be taken with partners according to their profile. The centralization of data minimizes the risk of error and allows a good visibility on the needs of the customers. Customer satisfaction improves your company’s reputation and allows you to boost your sales.
Conclusion
The success of your logistics strategy depends largely on the use of an ERP solution. This tool with many features optimizes the management of your inventory and the distribution of goods. It is also a modular software that can be adapted to your constraints, but which is also able to interact with other tools for greater efficiency. Gestion BSP will help you choose and set up the ERP solution that meets your needs.
