Supply chain management key to overall ERP strategy

////Supply chain management key to overall ERP strategy

The broad range of functions that ERP provides sometimes means that a specific advantage can be overlooked.

While many manufacturing and fabrication businesses focus intently on their overall supply chain because of its importance to both continued production and delivery to customers, there may be some confusion over the best ways to track indicators and which metrics matter the most when measuring efficiency.

MSDynamicsWorld recently provided some insight into effective, end-to-end supply chain management, with a focus on measuring inventory as the first building block and the discussion of specific key performance indicators.

Businesses looking to increase the functionality of their ERP solution's inventory and supply chain management subprograms can use add-on components that enhance these practices, as long as a modular ERP program like Microsoft Dynamics NAV is used.

Inventory movement and turnover
MSDynamicsWorld points out that the length of time inventory is sitting in a warehouse is an important measure of efficiency. This can be measured by how long specific items remain in storage and finding overall averages as well as subdivisions based on product type and other distinctions. An alternative method is to measure "inventory days on hand" – the total amount of time it would take, based on current sales levels, to completely eliminate inventory.

A quick turnover obviously indicates a high level of efficiency, as product that remains stagnant in a warehouse doesn't provide immediate value and takes up space that could be used by the arrival of new items. One way that businesses can track inventory levels with a high level of accuracy is through the use of a barcode inventory system that is optimized for the specific industry a business is involved in. Adding such a program is easy when a modular ERP system is used, even after initial implementation has been completed.

Best-in-class ERP providers help address the supply chain issue
A common distinction between the top ERP companies and the rest of the pack is versatility when it comes to integrating a variety of business functions. Aberdeen Group reported that 68 percent of the best providers combine data streams from manufacturing processes and other business operations – like supply chain management – to provide a clearer overall data picture for users. Working with one of these companies can help organizations develop their ERP strategy by providing valuable advice and guidance on product selection.

Learn how to define your ERP strategy by downloading the white paper entitled "ERP in Manufacturing: Defining the ERP Strategy" from the DMS website today.