David Grosvenor, managing director at TrueCommerce (Europe), discusses the key benefits of an effective ERP system in the supply chain.
Could you tell us a little bit about your company?
“We work with retailers and manufacturers to help connect their business across the supply chain. Our aim is to help our customers to do business in every direction intelligently through both innovative technology and the additional support and expertise to manage it. We have a global presence but, in the UK, we are long-term partners with brands like Sainsbury’s, Hobbycraft and Travis Perkins.
What are the benefits of ERP systems? How can the supply chain industry benefit from an effective ERP system?
“ERP systems work by automating and improving visibility of the various functions and assets within a business – from inventory and order management, to accounting and human resources – to streamline processes and information-sharing.
“The key benefit to supply chains is that, by automating processes internally, businesses can use an ERP system to improve the way they interact with customers and suppliers. Ultimately it enables them to obtain the resources needed to process and distribute products to market in a much faster and more efficient way.
“However, for an ERP system to deliver true value, it’s essential that it is properly integrated with additional external systems to achieve end-to-end automation. For example, manually inputting data from another platform or marketplace – such as Amazon or eBay – into an ERP system immediately negates a lot of the internal efficiencies it will have been designed to deliver.”
What are the challenges of this technology?
“While releasing the ultimate potential of an ERP system, integration can also be a complex process and, therefore, a challenge for businesses looking to automate and streamline how they manage their products and resources.
“Our own research found that, despite huge desire among businesses to digitise interaction with their supply chain, many lack the required internal knowledge to implement such change effectively without support. Indeed, more than a third of the businesses we spoke to identified skills as the main barrier to better automating their supply chain, of which their ERP system would be a key component.
“Investing and upskilling teams internally is clearly a priority but seeking support to alleviate those pressures by working with an external partner should also be a consideration.”
What are the current trends within supply chains in relation to ERP systems?
“We’ve noted a significant rise in the number of retailers – particularly well-known brands who trade in volume – that are looking to integrate their ERP systems with popular third-party marketplaces like Amazon and Alibaba.
“Many vendors struggle with timely order processing and keeping inventory in sync as their order volumes begin to grow through these marketplaces. The main contributor to the bottleneck is the manual transfer of data from an external platform to an ERP system so we would expect to see more integration as online marketplaces continue to grow in importance.”
How can innovative technology such as AI, ML, Big Data, automation etc. improve ERP systems in supply chains?
“Currently, the benefits of ERP systems are largely focused on driving efficiencies by automating data-sharing. For example, there is still a major reliance among some businesses to feed into their ERP system with a ‘pen and paper’ approach. AI will reduce that burden, meaning less time is spent rekeying data and completing administrative tasks, allowing for human resource to be redirected to high value work elsewhere within the supply chain.
“Looking further down the line, we can also expect to see ERP systems recognising errors and trends so that they act in a predictive capacity rather than just providing real-time analysis. As a result, they’ll also become better at feeding into the actions of other integrated platforms or ‘bolt-on’ APIs.”
How can the industry ensure its data is secure when using an ERP system? What are the challenges?
“As ERP systems continue to become more cloud-based, it’s becoming increasingly important that businesses have detailed oversight of how their service provider is storing their data. Many businesses will look to those providers as security experts to outsource their GDPR responsibilities. However, outsourcing doesn’t necessarily remove responsibility.
“As such, it’s key that firms are looking to a vendor with a mature network, whose applications have been designed with security at the forefront.
“Equally, they should always be mindful to encrypt sensitive data and vet the suppliers whose systems might integrate with their ERP.”
What applications of this technology have you seen within the industry?
“We work closely with the seafood retailer and wholesaler Seafresh Group. They are a great example of how a business can generate a competitive advantage by having a well-managed ERP system that interacts with the platforms of their customers and suppliers.
“They count Tesco and Marks and Spencer among their customers and the perishable nature of their goods means that supply chain errors can be hugely damaging to their brand and bottom-line. They wanted to eliminate the risk of human error and the time and effort that was being wasted in rekeying and cross-referencing data caused by the disconnect between their new ERP system and external platforms.
“The decision was subsequently made to integrate our EDI solution with the company’s Oracle ERP system and WMS solution.
“Since integrating EDI with its back office systems, Seafresh has benefitted from significant productivity and efficiency benefits. The company now has a stable and scalable electronic trading solution that maximises efficiency and customer service levels.”
Looking to the future, what would you like to see developed in relation to ERP systems?
“As attitudes shift towards a more unified approach to commerce, it’s important that technology also adapts at pace. For example, it’s essential that ERP systems are developed with simple integration in mind. Only then will businesses be able to make the most of the technology and achieve their end-goals of increasing sales and doing so more efficiently.”
For more information on procurement, supply chain and logistics topics – please take a look at the latest edition of Supply Chain Digital magazine.
