Efficient communication is critical for maintaining an efficient supply chain. By integrating ERP into the supply chain, data exchange is streamlined without having to deal with silos that keep processes separate and prevent the sharing of data. With ERP-integration, data exchange begins the moment the supplier enters sales information into the system. From there, the information is sent through production planning where the necessary materials are ordered, and the new task is schedule on the supplier’s itinerary. This helps ensure that information is quickly exchanged with the individual links of the logistic supply chain.
Opportunities for Effective Management of Green Supply Chains
Integrating supply chains creates ten opportunities for the effective management of green supply chains:
1. Accurate “Pull” Data – Process flows are kicked off with the entry of sales information
2. Lot Size Reduction – Developing economical shipments for less than truckload (LTL), providing discounts based on volume, and reducing cost of ordering through standing orders or forms of electronic purchasing
3. Single Stage Control of Replenishment – Designates a member of the chain to be responsible for monitoring and managing inventory based on the “pull” from the end user
4. Vendor-Managed Inventory (VMI) – Uses a distributor to maintain inventory for the manufacturer
5. Blanket Orders – A contract to purchase items from a vendor, but not filled orders. Shipment is made only when an agreed-on document is received
6. Standardization – Creating balanced standards that are both stiff and flexible
7. Postponement – Withholds modifications or customization to the product for as long as possible to minimize internal variety while maximizing external variety
8. Drop Shipping and Special Packaging – Shipping directly to the end customer instead of the seller to save time and reshipping costs
9. Pass-Through Facility – A distribution center that acts as a shipping hub where merchandise is held
10. Channel Assembly – Sends individual components or modules to the distributor for final assembly rather than finished products.
The Faster the Reaction, the Better
Supply chains are more competitive when they have a faster reaction to market needs, which is made possible through ERP integration. Sustainable development also benefits. By optimizing inventory and transportation, eco-efficiency is achieved, in addition to reducing company costs. The information systems that support ERP systems focus on delivering reliable information from certain areas of a company. The information that is collected makes it possible for suppliers to make the right decisions based on operational and strategic levels that will provide the best benefits.
References and Further Reading
- "ERP Integration as a Support for Logistics Controlling in Supply Chain (2011)" , by Adam Koliński and Paweł Fajfer