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ERP systems can improve supply chain efficiency

11/15/2012 at 11:52 am by

With consumer spending on the upswing, supply chain professionals anticipate an increase in demand in the coming years, according to a recent report by KPMG.

"Organizations are feeling that it is time to start thinking about how they would be able to respond to an increase in demand and still deal with the level of volatility that is out there," Andrew Underwood, a partner at KPMG, recently told Supply Management. "A number are really preparing for an upturn."

Underwood added that companies are focused on increasing both cost and operational efficiency. To accomplish this goal, the study found that many enterprises are integrating different systems, with sales and operational planning teams working closely together to establish centralized service centers.

Enterprise resource planning (ERP) systems offer a potential solution to companies. For instance, in an interview with Manufacturing Business Technology, Reddy Beeram, director of development at Edgewater Fullscope, suggested that implementing competent ERP or data collection systems – or both – can increase operational efficiency for manufacturers.

Beeram pointed out that these systems enable organizations to store every piece of data – from when a product arrived into the warehouse to where it came from – in a way that is interconnected. That way, "when you need to resurface that information, it provides visibility to all that linked data" at a real time pace.

At the same time, ERP systems can be extremely cost-efficient when they are used properly, according to Beeram, although he noted that the typical return on investment (ROI) for ERP varies depending on a company's size. Meanwhile, ROI for data collection systems generally range from six months to two years.

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The Sage ERP team report on various topics related to ERP and business management.

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