Enterprise Resource Planning (ERP) and Supply Chain Management (SCM) serve as two cogs in a larger machine that helps streamline businesses with manufacturing and production concerns. Using these systems, a company can expect much more efficient, cost-effective production, from design to manufacturing, and finally, distribution and sales.
Systems like these are especially beneficial to the fashion industry, where purchase orders have historically been in large quantities. In these markets, there is scope for inefficiency at every step of a reasonably complicated supply chain. It is in situations like this that lots of small problems can quickly add to the company’s high costs.
What is Supply Chain Management (SCM)?
Having a good understanding of a supply chain before attempting to understand this particular system is crucial. Most people would think in terms of stages. Design, manufacture, distribution, retail-and, while technically accurate, is a very vague definition of a very complex animal.
Supply chains consist of a complicated network of individuals, companies, resources, and technologies. It is essential to factor this granular level of detail when managing your overall supply chain, as these areas are where the most collective benefit stems from proper management.
This is the part where managing your supply chain comes in. As the name suggests, this system deals in the total control of your supply chain, at every stage, in great detail. In connecting the different stages of manufacturing together through a unified system, companies eliminate many inefficiencies. Because of this, the overall process is streamlined, which in turn makes it more cost-effective. Some examples of problems that can be avoided by this system are:
- Delays due to miscommunication
- Incorrect or missed product changes
- Poor stock management at both ends of the chain
What is Enterprise Resource Planning (ERP)?
While the above system deals specifically with the supply chain, an enterprise resource planning system has a broader scope. This system records and manages all data across the enterprise.
In the same way that managing your supply chain uses data to make the best decisions in that area, resource planning does so on a broader scale. By keeping comprehensive, centrally stored data on customer orders, inventory, financial data, and more, a business significantly improves the day-to-day operations.
One massive benefit of enterprise resource planning is the ability to perform analysis of the data and use the results of that analysis to inform future decisions. One example of this might be seeing a trend for increased sales of a specific type of product during a particular season. Armed with that knowledge, a business would be able to ramp up production in time for that season and avoid running out of stock and missing out on potential sales.
Combining ERP vs. SCM
Proper management of your supply chain is an aspect of resource planning. The modular nature of resource planning systems means it is possible to have one system without the other. However, the benefits of both working in tandem are substantial for most medium to large businesses.
Suuchi developed a better way to combine ERP and SCM functionality into one software that streamlines these concepts and delivers a more robust, sleeker supply chain management solution.