Disrupted supply chains and rising costs, which are currently affecting manufacturing and trading companies, were first triggered by the pandemic and have now been exacerbated by the war in Ukraine. The latest reports on the business climate are causing many companies to switch to crisis mode or at least to focus intensively on a worsening of the crisis. Fortunately, companies that have a solid ERP system have an important tool in their hands. After all, automated inventory management can be essential for companies that are affected by disrupted supply chains and want to survive these uncertain times.
Factors responsible for the current supply chain crisis
Many companies have numerous parties involved in their supply chains. These include suppliers, partners and dealers, customers, external logistics providers, warehouse operators, transport companies, e-commerce providers, retailers and financial institutions. The flexibility to react to fluctuations in demand is essential for a functioning supply chain. However, with the increasing impact of COVID on global markets, the movement of goods across countries and continents has been severely hampered. However, the current supply chain crisis is not solely due to the Pandemic can be attributed to this. Other factors are
Changed trade policy
In the recent past, import duties imposed by governments around the world have been increased again after a long time, which has already had an impact on many industries. Special effects such as Brexit exacerbated these effects. Global trade structures are therefore increasingly changing and companies are faced with higher costs and uncertainties when dealing with foreign partners.
Online sales channels dominate
In addition, some companies were also affected by the increasing replacement of bricks-and-mortar retail by the Online trade caught on the wrong foot. Not only were old distribution channels weakening, but increasing price transparency due to the transparency of the Internet was also reducing margins.
Rising commodity and energy prices
The latest DIHK economic survey revealed that two thirds of companies in all sectors and regions see rising prices for energy and raw materials as a significant business risk. In industry, as many as 85% see it that way. That was before the start of the war in Ukraine.
How the right (configured) ERP system counters the disruptions in supply chains
One of the first steps companies should take to survive the current disruption and ensure smooth trading operations post-pandemic is to invest in their existing or upcoming ERP system.
Improved inventory management
As always, if you have a ERP system to optimise automation. A company with automated inventory management can save time and money. The aim is to increase efficiency in all areas.
- Inventory Management Accuracy
Whereas previously much depended on the experience and decisions of individual employees, you can now rely on the software's calculations. This leads to an improvement in the reliability and quality of your inventory management. Integrated inventory management also takes into account the best practices for your organisation and avoids human error.
- Inventory management scalability
Medium-sized companies in particular are missing out on potential growth opportunities without smart IT support. A modern merchandise management software helps you to identify growth areas and protects you from losses.
- Effectiveness and transparency
Whether it's time-consuming calculations and data analyses, integrated software can do what employees previously had to do more quickly. Operating the software also increases the transparency of the entire supply chain. Customer orders can be processed faster and supplier orders can be triggered more quickly. At the same time, you always have an overview of processes or fault messages.
- time saving
If your inventory management is automated, your employees in the Purchasing free up valuable time for other important activities. You can tackle new projects and new market segments and concentrate on sales and growth instead of processing data manually.
- cost cutting
Cost is an important consideration when it comes to implementing a professional inventory management system. The ROI of such a system is often underestimated. In the long term, significant savings can be achieved on several levels. For example, the software can help to keep stocks as low as possible without jeopardising delivery readiness.
Efficient management of complex supply chains
Many companies are highly dependent on partners (e.g. freight brokers, shipping companies and freight forwarders) who play a key role in their processes and logistics. The problem for many companies is that these service providers are often not transparent in the handling and throughput of their own goods. With an advanced ERP system, such partners can be tracked via interfaces and ensure seamless data exchange. The shared data can be used to continuously analyse key performance indicators of the logistics take place.
Higher customer satisfaction
Improved warehouse and inventory management ensures optimised delivery readiness and therefore better and often faster customer processing. However, the data provided can also be used to inform customers about the status of their orders and deliveries. A significant contribution to customer loyalty.
The customer's data can also be used in combination with an integrated storage system to optimise the storage place deliver based on forecast demand.
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