Enterprise Resource Planning (ERP) systems have transformed countless industries and businesses. They enable companies to effectively manage their data in real-time via a centralized platform. Technically, companies can have access and control over all their business functions in an easy-to-use ERP software tool.
The global ERP market is set to be valued at over $49.5 billion by the end of 2024. Although the advantages of these easily accessible software tools can be enjoyed by any company, irrespective of its industry, ERP systems are particularly powerful tools for logistics companies.
Over the last two decades, the logistics industry has become the spine of global commerce and supply chains. Competency in managing high volumes of data in real-time is mandatory in this industry. That’s because the global logistics industry consists of thousands of different moving parts.
Logistics companies have to fulfill orders, protect/manage global supply chain management, deal with freight, transportation, warehousing, and several other tasks. The most frustrating part about these tasks is that they’re unpredictable. From demand fluctuations to price changes – supply chain data is always prone to changes. Understandably, such tasks can be complicated, especially for those who are new to ERP. For this, an expert ERP consulting process should suffice
Coordinating the transfer of data and physical resources from suppliers to storage facilities and then to the intended customers is impossible without a high-quality logistics ERP module. ERP systems in the logistics industry are definitive tools that determine the efficiency levels of different companies.
How ERP Systems Help Logistics Companies
ERP systems allow logistics companies to automate various aspects of their day-to-day tasks. Be it fleet management or warehousing, logistics company managers can oversee pretty much every business function with a high-quality ERP system. But, ERP systems in the logistics industry have two main goals.
The first goal is to help logistics companies cut costs wherever possible. Be it via better inventory control or route optimization – ERP systems enable logistics companies to become more cost-efficient. The second and the more challenging goal is to reduce supply chain risks.
Total Control Over Inventory
An ERP system essentially creates a centralized platform for a logistics company. On this platform, operators can discover all kinds of inventory-related information – incoming orders, inbound/outbound sales, pending deliveries, etc. Supply chain managers can leverage this information to make data-driven decisions and even future predictions.
For example, by assessing previous years’ sales trends, supply chain managers can set delivery time goals for their distribution teams. Risks like out-of-stock products, increases in inbound orders, unfulfilled outbound orders, etc., are also easier to address when you have access to real-time data.
Precise Flow of Physical Goods
The primary responsibility of every logistics company is to guarantee the accurate transportation of goods. To achieve this, supply chain operators have to precisely manage the flow of each product/order. ERP systems give supply chain operators clear pictures of their distribution channels.
The most advanced ERP systems offer GPS-enabled inventory tracking. Since supply chain operators always have access to real-time inventory records, risk elimination becomes much easier. They can always provide accurate information to their customers and suppliers.
These systems also enable live communication between different supply chain operators. For example, supply chain managers can send traffic updates or optimized routes to their vehicle drivers. Supply chain coordinators can send emergency information, such as weather-related issues, to storage center workers to prevent unnecessary delays.
High-quality ERP systems maintain stock records, employee records, supply chain details, etc., of several third-party logistics companies. These large sets of data (for example, large SKU bases) enable ERP systems to improve with time. Logistics companies can, of course, use the data from their systems to improve their output efficiencies. But, they can also expect their ERP systems to improve with them.
- Warehousing will improve as ERP systems will enable supply chain operators to pick optimal routes and optimal pickup/drop-off times.
- Inventory tracking will improve as GPS systems become more advanced. Companies can use their ERP systems’ inventory records to make better stock-related predictions over time.
- The best ERP systems come with CRM modules that allow logistics companies to manage, assign, and follow up with leads without requiring the assistance of third-party customer management companies.
- The best ERP systems have all been updated to provide track and trace features. Complying with COVID19-related regulations is much easier if your company is using an advanced ERP solution.
- Constant updates to employee databases in ERP systems allow logistics companies to define salaries in a better way. In-built leave accounting and attendance management systems allow logistics companies to manage their staff effortlessly, irrespective of their locations.
Over 50% of all companies in the world use ERP systems, many of which are logistics companies. Can your logistics company handle constant changes? Do the professionals in your supply chain have the tools to address sudden supply chain uncertainties? Are your logistical procedures improving with time? If your logistics company isn’t using a high-quality ERP system, the answer to those three questions is most likely “no.”