Enterprise Resource Planning in SCM


In the current business trends, companies are working around the clock to minimize the cost of production through reduced backlogs of demands, holding cost of inventories, and ensure optimized transportation process. This will ensure that the performance of the venture increases as well as the profits from large sales. Therefore, businesses have opted to apply technologies like enterprise resource planning, (ERP) in management of inventories ordering process and forecasting of demand.

ERP is an automated supply chain management system that has ability to integrate different processes in an organization, which are them controlled from a single information center. The systems optimizes the supply processes such that the cost incurred from different suppliers and distributor channels are greatly reduced since the goods are only unilateral simplified means. Besides, the system eliminates time wastage between the origin of goods and destination. This ensures that the goods reach the targeted market in time, which also prevents backlogs in the market. As a result, consumers are able to get their goods and services in time and hence meet their needs. From the fact that manual supply chain systems requires operations of different departments such as factories, transport, warehouse, and market, which is very difficult and require competent staff and a lot of effort in order to ensure smooth supply.

The ERP systems focus on all the processes involved in supply chain such as inventory, purchase, materials, and transportation management,

Effects of technology on the company

In the market, it is important to determine the demand of goods from the target market so that a company can produce or order optimum quantities and avoid delayed deliveries or inventories holding costs from oversupply in the market. Hence, the company must carry out forecasting that is accurate and plan for future demand.  ERP helps to simulate demand in the market based on the past data as well as the trends of the supply in time series. This ensures that the company is able to supply the right quantity of goods and services in the market at a given market period.

ERP technology is simple and easy to integrate in the existing business information systems thus it is affordable to small, intermediate and large enterprises.  Moreover, in the long-term the return on capital and investment will be greatly increased thus prompting the company to increase its competitive advantage through reduced cost of production and prices.

Technology impacts on the consumers

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

In conclusion, the integration of ERP technology in business will have great impact not only on the consumers but also on the company, which will improve the business performance and consumer output. Therefore, it is important for companies to embrace new technologies through implementation of the systems in their information technologies thus easing business operations that will reduce cost 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.