Supply chain management is one of the key areas of any brick-and-mortar business. This covers a wide array of stakeholders namely manufacturers, suppliers, distributors, vendors, retailers, customers, etc. Well planned and efficient movement of goods will determine the profitability of the business and companies across the world have understood the importance of implementing ERP to optimize SCM.
According to a recent global survey, the revenue for supply chain management software is estimated to be around USD 17306M in 2021. ERP for supply chain management is expected to grow at a CAGR of 6.52% from 2021 to 2026. ERP software industry itself is expected to grow at a rapid pace and the worldwide revenue is projected to be 78.4 billion dollars by 2026.
The Role of ERP in Supply Chain Management
Some of the valuable role ERP plays in supply chain management, an important part of the overall success of a manufacturing business are:-
Strategic Demand Management
Inventory management is one of the core features of SCM that helps the smooth functioning of the business. ERP comes with a demand monitoring module that automates stock management. It also provides current market trend demand to help the company plan replenishment orders. Automatic management of stock levels and generate purchase orders when the threshold limit is reached.
When the ERP system is integrated with the SCM, it will take care of the smooth distribution of products from the inventory to various departments. It helps the business to maintain a centralized customer shipping database that will enable guaranteed dispatch of shipments as per schedule.