Some may think picking between ERP and supply chain management software is like choosing between two different movies to watch on Netflix; they’re both good, but you don’t know which is worth more bang for your buck. Don’t sweat it. SelectHub is here to expound on each program’s unique qualities, key differences and the perks of a merged ERP supply chain system.
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What This Article Covers
- What Is ERP?
- What Is Supply Chain Management (SCM)?
- ERP vs. SCM
- Using an ERP Supply Chain Solution
- Last Words
What Is ERP?
An ERP system is a solution with modules that cater to different departments or a solution that aligns with a specific industry.
Think of an ERP as a pizza — an overarching program that contains various functions (or toppings) to assist numerous departments throughout your company.
SCM can be a module within ERP suites. The SCM module may have limited or broad tool spectrums depending on your software. Review our detailed requirements template for more ERP features.
Key Features
No two ERP systems are entirely the same. But we’ve compiled a list of the most common features and departments an ERP assists.
- Integration: Merge this solution with your existing platforms for effortless integration instead of separate solutions. Or you could invest in a system with everything you need in one centralized place.
- Data Analysis: Leverage data management, business intelligence (BI), business analytics (BA) and more to maintain KPIs, generate thorough reports and charts and make better business choices.
- Accounting/Financial Management: Simplify bookkeeping and accounting tasks such as bank reconciliations, general ledger balancing, allocating invoices and distributing bills.
- Customer Relationship Management (CRM): Manage customer satisfaction rates, feedback, demand patterns and more to strengthen existing customer relationships and create new ones.
- Sales and Marketing: Implement numerous sales, promotions, order monitoring and other tools for your sales and marketing teams to automate processes.
- HR: Supervise employee information from benefits and vacation time to training and certifications. Simplify the recruiting process with practical tools to find ideal candidates.
- SCM: Featured as a module, SCM enables you to review every stage of your supply chain, assess suppliers and track products to ensure they arrive at the right destination.
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Benefits
Owning this solution comes with various benefits. Some perks include:
- Improve Collaboration: Kiss double-entries and department silos goodbye because this solution adjoins all departments in one centralized location with real-time updates so everyone stays in the loop.
- Manage Scalability: If you own a small business to expand into an enterprise or mid-level company, an ERP program offers various scalability tools, including employee management, to ensure everything is accounted for as your business grows.
- Strengthen Business Reporting: Garner numerous reports automatically such as profit and loss, bill of materials (BOMs), sales cycle, profitability and more to determine trends, predict future demands and make well-informed choices.
- Streamline Customer Service: Thanks to the right CRM, sales and marketing modules, you’ll garner real-time client information, personalized customer interactions, in-depth feedback and more.
- Save Money: Centralizing different business departments saves you from investing in different solutions. You also save on IT and other expenses because ERPs are reasonably manageable and easy to maintain with less licensing and total cost of ownership (TCO) fees.
- Enhance Data/Cloud Security: Leverage unique cybersecurity measures from data encryption to access levels and multi-factor authentication to ensure hackers don’t steal your sensitive company information.
- Increase Productivity: Automating simple tasks like data inputting and sharing, conducting end-of-month reporting, allocating invoices, etc., enables you to work on other high-caliber responsibilities, boosting overall efficiency and saving money.
What Is Supply Chain Management (SCM)?
Supply chain management software is a system that governs all supply chain processes, from planning and manufacturing products to delivering them to customers promptly. This system usually focuses on SCM practices.
Key Features
Like snowflakes, no two software are alike. But this platform contains various common attributes that streamline your supply chain methodology. These tools include:
- Order Management: Govern all orders and trace them through the entire process from receiving and manufacturing to delivery.
- Warehouse Management: Implement this accessory (or invest in a standalone WMS program and govern every aspect of your warehouse, from employees to orders, picking and receiving, among others.
- Logistics: Maintain warehouses, employees, machinery, fleets and other valuable resources across your supply chain. You can also allocate resources accordingly to the right jobs and orders.
- Inventory Management: Establish minimum quantities for particular items and receive alerts to avoid stockouts. Detect specific objects immediately and gain real-time insights so you’re always in the loop.
- Forecasting/Planning: Anticipate incoming consumer demand with in-depth analytics and gather the necessary employees and resources to carry out tasks effectively.
- Collaboration: Leverage ideal collaboration accessories to keep vendors, stakeholders, clients, employees and others on the same page with updates, requests, feedback, etc.
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Benefits
Like ERP, SCM offers a wide range of strengths. These advantages include the following:
- Save Money: This system can analyze your operations for inefficiencies and help you rectify them. For example, you avoid overbuying raw materials like wood, plastics, metals and more because you get a real-time view of your available stock.
- Boost Productivity: Govern every moving part of your supply chain, from employee and resource management to vendor and shipping company relationships, in one solution to catch and resolve issues before they become significant problems.
- Improve Inventory Management: Find stocked goods easily with numerous alerts and analytics to ensure you know where everything is and avoid wasting materials.
- Enhance Collaboration: Link employees, stakeholders, clientele and others in one centralized hub to relay information and keep everyone on the same page.
ERP vs. SCM
Now that we’ve taken time to examine the individual qualities of ERP and SCM systems, let’s break down their fundamental differences.
Industries Served
The main difference in this ERP vs SCM debate is the industries they serve. ERP serves several departments simultaneously, while SCM only caters to supply chains. A standalone SCM solution is for you if you’re looking for a program just to handle supply chain responsibilities.
On the other hand, if you’re looking for a solution that caters to accounting, HR, CRM, BI, manufacturing and more, in addition to SCM, an all-in-one ERP suite is what you need.
Pricing
In the ERP vs SCM debate, most software will run anywhere from a few hundred to thousands of dollars. An SCM program will likely run less than a whole ERP system. SCMs only carry relevant features, while ERP has numerous features. So ERPs will be pricier.
An example of an ERP system
Users
User types are also a key factor for ERP vs SCM. For standalone SCM solutions, users will likely consist of managers, team leads and possibly a handful of employees for time and attendance, payroll, BI and other associated tasks for that particular facility.
ERP users will likely be IT technicians, executives and department heads to cover every nook and cranny of the organization and require knowledgeable users.
Using an ERP Supply Chain Solution
Various benefits come from utilizing an ERP supply chain management program or platform with ERP and SCM traits.
Automate Tasks
Routine tasks such as inputting financial data at the end of the month, accounting for employee time, evaluating productivity and more can take time away from more critical responsibilities. Investing in an ERP supply chain management system allows you to complete these tasks instantly and is available to all departments in real time.
Perform Lean Inventory
Leverage a supply chain ERP program to keep your raw materials and other items organized. Some programs enable you to manage stock quantities with minimum values and obtain notifications when objects reach these values to avoid stockouts.
A preview of an SCM solution
Boost Company Collaboration
Utilize an ERP SCM platform to centralize tasks and communicate better with suppliers, stakeholders, manufacturers and more to keep everyone on the same page. You can also allocate or receive real-time information on deadlines, projects, staff or other changes.
Centralize Business Workflows
Keep inventory, accounting, manufacturing, SCM, CRM and other processes centralized in one ERP supply chain management system. The better the centralization, the better you relay information and manage all operations. You can also catch bottlenecks and boost productivity.
Enhance Customer Satisfaction Rates
Leverage an ERP SCM solution to manage on-time deliveries, supply chain obstacles and more to ensure customers and suppliers receive products on time. You gain more revenue and a higher reputation against your competitors when you have happy customers.
Supervise Intricate Supply Chain Frameworks
Implement supply chain ERP software to monitor all supply chain formats and workflows from start to finish. You can also spot discrepancies, such as missing products, failed delivery times and more. Keeping an eye on your supply chain ensures nothing slips through the cracks.