In any business, be it logistics or otherwise, efficiency is the answer to optimal productivity, which in turn results in increased profitability. ERP is proving to be a proactive method of achieving these exact goals in the up-and-coming enterprises of our current day and age. That being said, an ambitious business owner should want to implement this solution as an investment in the growth and effectiveness of their business.
This is a simple yet effective guideline to the implementation of ERP, specific to a logistic business. But first, let’s be clear on what this entails.
What is ERP
ERP stands for Enterprise Resource Planning. It really took flight in the late 1990’s during the Y2K scare and introduction of the euro. Businesses did away with their legacy systems and started using ERP. This system provides access to employees and partners by means of e-commerce technology.
ERP is an all-in-one business management solution that allows you to keep your finger on the pulse of your business from one easy source.
ERP systems include the following characteristics:
- A united system
- Operates in real time
- An integrated database supporting all the applications
- A consistent dashboard across the modules
- Enablement of the system with intricate application or data integration by the IT department, provided the implementation is not done in compartmentalised sections.
- Placement options include: in house, cloud hosted, or SaaS (software as a service)
How is this Applicable to the Logistics Industry?
As an industry that relies heavily on data capturing and management, an EPR system is perfectly suited to the nature of your business. Monitoring and logging information is important. This is what helps track and manage such a complex business model. Why would you not want to have the power to oversee your entire business from one single point? Benefits include the following:
- Optimize inventory control
- A personalized dashboard allowing for monitoring of orders, sales and distribution from one centralized point
- Track previous sales trends to prepare for future efficiency
- Accelerates distribution times by 23%
- Realtime data analytics
- Identify out-of-stock inventory, handle inbound orders from suppliers, and execute outbound orders
- All features are accessible from a desktop or smartphone
- Implementation and support from software vendors
- Improves distribution
- Improves distribution management of freight operators
- Records datasets from multiple sources eg: in house records, internet, social media
- Displays information through maps, charts and graphs
- Streamlines delivery to customers using the data collected
- Encourages communication between suppliers, distributors and retailers
- Allows for live information to be delivered to drivers regarding traffic and delivery destinations.
- Reduces operational and administrative costs by 23% and 22% respectively due to effective, real time communication
- Personalized system to suit specific needs
- Manages staff
- Log employee hours
- Track rest times of operators
- Collect staff performance data
- Maintain a steady stream of staff, distribute contracts, and schedule hours
Where to Start
Now that it is evident that ERP systems are not only extremely beneficial, but almost a necessity to your expanding logistics business, let’s look at the process of implementation.
Choosing a Software Vendor
Find the right software vendor and personalized software to suit your specific business. This would be imperative to experience the full benefit of the system. As ERP is not a new concept in the market, it should not be difficult to find a vendor in your area. When shopping for the right system for your business, consider the following:
- Recognize five key factors of the product you see most fit for your business
- Identify the essential factors necessary for your business
- Avoid outdated technology
- Minimize risk in ways that satisfy your budget
- Determine how your top choices stack up against similar systems
Choosing the System That Suits You
ERP systems are applicable to several different industries. The ERP SD (sales and distribution) module would be best suited to a logistics business and consists of the following components:
- Master data
- Basic functions subdivided into multiple components, such as pricing and output, to name but a few
- Foreign trade
- Marketing support
- Electronic data interchange
- Sales and Logistics Information systems
Any new system, policy or protocol implemented into a business requires training and support. Equipping staff with this knowledge will allow them to competently make full use of ERP. It is advisable for your business to provide as much training and support as possible.
Online training is available from certain software vendors. This online training proves to be comprehensive and conclusive enough to give your staff the tools they need to proficiently operate your ERP SD system.
Day to Day Operation
As you must have realised by now, an ERP system is user friendly and comprehensive. It is important that management staff are well informed and active users of your new software. Even though support be available from your software vendor, it is a good idea to have an inhouse “expert”.
This person should oversee everyday operations to make sure that staff are using the system correctly and that all the necessary data is being used in the best way possible.
Keeping Your ERP up to Date
Isn’t it scary how fast technology is developing these days? You get a new device today and by next month it is superseded by something bigger and better. Before you’ve even had the chance to experience the one you have to its full capacity, it is redundant. The same applies here. It would be most beneficial for you to keep up to date with updates and expansions of your ERP system. In this field, there are constantly new and better developments being released to make our lives and productivity that much more efficient. Don’t get left behind.