The benefits of ERP for logisticsThu Nguyen
What is an ERP system?
An enterprise resource planning (ERP) system allows an organisation to effectively manage its flow of information in a central hub by combining all business functions in an easily accessible software feature.
There are many benefits to using an ERP system across various industries, and for logistics, in particular, ERP can be a powerful tool to manage the flow of daily information in real-time data, which can be accessed by anyone, anywhere.
Breakdown of logistics
Logistics, much like Supply Chain Management, involves the co-ordinating and transferring of resources from a supplier to the desired customer or storage facility. Where supply chain management looks more at outside organisations working together to deliver the desired product, logistics is a more holistic approach within a specific company. Logistics looks at the whole process – from the purchase and delivery of raw materials, food, and liquids, to the packaging of products and the final transportation of goods to customers.
Some of the components of a logistics company
- Inbound and outbound transportation
- Fleet management
- Materials handling
- Production and packaging
- Inventory management
- Security of goods
How an ERP system can assist logistics
An ERP system can assist logistics companies in managing their company more effectively, helping to reduce risks and company costs. Some of the ways an ERP system can benefit a logistics company include:
- Inventory control
- Staff management
- Customisable system
- Reduced costs
With ERP software providing for one centralised system, all information required to run a logistics company can be captured in one place – including orders, inbound and outbound sales, deliveries and more. This captured information allows the company to make informed decisions and future predictions for the company based on historical data that the ERP system provides. The decision-makers can look at previous sales trends or delivery times and make changes where necessary based on this information.
The real-time data allows immediate notification of out-of-stock products, inbound orders, outbound orders that need attention, and any problems with deliveries as they occur.
The distribution side of a logistics company is one of the most important aspects of the business, as it involves precise management of the flow of distributions and control over the transportation of goods.
An ERP system provides the solution to manage the flow and distributions effectively by gathering all the necessary information in one central hub.
For transportation purposes, the ERP system can manage the transportation of goods, ensuring customers and suppliers receive their products on time. The system also allows for live communication between the drivers and coordinators, sending live traffic updates, customer addresses, and any emergency information, such as transportation issues.
Managing staff can become quite tricky, especially within a logistics company, where staff can be in various places around the country or even the world. Staying on top of staff responsibilities and whereabouts can be difficult, but with an ERP system in place, managing staff is made easy. Some of the ways managers can benefit from the ERP system with regards to the staff include:
- Employee working hours and lunch breaks/rest periods
- Employee information and paperwork
- Tracking staff on the road during transportation
- Payroll and staff increases and bonuses
- Staff performance
- Sick and paid leave days
- Managing casual and permanent employees
- Providing a list of backup staff members or casual employees in case of an emergency.
Most logistics companies will have specific ways in which they run their business, running personalised software options to match the needs of the business. An ERP system allows each company to personalise their system to benefit them and run their company data in the most accurate way.
The accurate, real-time data that an ERP system provides allows companies to reduce their monthly expenses, being able to make informed decisions quicker and more accurately. By not having to wait for information and feedback, the decision-makers in the business are able to attend to issues or make changes where necessary as soon as possible, before it becomes a huge expense to the company. This allows the logistics company to maintain and increase productivity monthly.
The ERP system provides a detailed analysis of each customer and a record of all their information, allowing the company to build personalised relationships with customers. The real-time data also reduces the risk of mistakes, delayed deliveries and unfulfilled promises to customers.
Logistics plays an essential role in the running of a country, by providing a streamlined approach to the design, production, purchase, transportation, and storage of goods to various businesses. The more streamlined the logistics company can be, the more profitable it becomes for not only themselves but their customers as well. Using an ERP system, for this reason, is hugely beneficial to all stakeholders involved in logistics.