Enterprise
resource planning (ERP) software is essential to help your supply chain run
smoothly and provide insight into daily operations. Here are five changes you
should expect for ERP software for 2020, and how they’ll likely affect the
supply chain.
1. A growing realization that ERP
systems and associated technologies cut costs
When the Supply Chain Management Review published its 2019 Warehouse and Distribution Center (DC) Operations Survey, labor scarcity was a persistent challenge for those professionals. However, many are dealing with the consequences by using technology to keep costs down. The research showed that 85% of respondents used warehouse management systems (WMS).
Moreover,
ERP systems and legacy or homegrown options were the most popular WMS choices
cited. This year’s survey showed more people bringing automation to their processes,
too, with 23% mentioning that compared to 15% last year. Then, 45% recognized
that improving information technology in their warehouses was important for
managing costs.
In
2020, as supply chain professionals continue to look for ways to reduce costs
and compensate for an insufficient labor force, many will investigate whether
2020 is the right time to connect complementing technologies to their ERP
systems.
2. Greater emphasis on using ERP
software to keep customers satisfied
Supply
chain businesses have a variety of reasons for implementing ERP software. The
desire to improve business performance is one of the top drivers, and others
set their sights firmly on growth, frequently understanding that a company that
performs well is typically in a good position for growth.
ERP
systems also help companies integrate multiple systems, and many end up
selecting an ERP provider because they want to replace legacy systems. But, as
we move into 2020, expect more supply chain businesses to see a link between
using ERP systems and keeping their customers satisfied.
In
the case of one manufacturer of hydraulic jacks, the company discovered that
installing a new ERP system after previously relying on business accounting software
streamlined both the creation and distribution of products. Those advantages
made it easier to meet customers’ needs. More specifically, the company
fulfilled 30% more orders with
the same resources after implementing the ERP tool. The company previously used paperwork
to track orders and admitted that sometimes orders were misplaced, which caused
delays.
Supply
chain professionals will keep using ERP software for many of the other reasons
listed above and others not mentioned. However, you should anticipate they’ll
increasingly understand why using an ERP makes it substantially easier to have
happy repeat customers.
3. Artificial intelligence coming
to ERP software
People
earning their MBA degrees with an interest in supply chain management often choose
Operations Management specializations during their educations.
Besides that concentration preparing them for a fulfilling career, it could
also introduce them to some of the emerging technologies more frequently
associated with ERP software. This could make them conclude they made the right
decision to get into the industry now.
One
of them is artificial intelligence (AI). Although AI is excellent for removing
some of the manual, time-consuming tasks that humans do concerning managing
their relationships with customers or achieving their sales goals, AI also
applies to supply chain professionals due to its inventory management
capabilities.
Applying
AI to ERP means lower costs
and higher revenue, particularly because it helps tackle problems with over- or under-production.
Additionally, AI can offer predictions that help a supply chain manager make
more accurate assessments when determining if the company can or should scale
up the business to accept a big client or take on a lucrative project.
AI
is already starting to integrate into some ERP platforms. In 2020, however,
more vendors may begin offering it, especially if substantial numbers of their
clients from supply chain companies expect and demand it.
4. More companies integrating the
IoT into their ERP platforms
2020
will also likely include an increase in companies using Internet of Things
(IoT) sensors and ensuring the respective data gets factored into the
information shown in an ERP interface. Some supply chain leaders put IoT
equipment on their trucks. This approach allows for tracking the
vehicles in real-time and predicting the demand for sales.
Having
that information on hand allows supply chain professionals to make smarter and
more informed decisions about how to run their businesses. They’ll also be able
to avoid issues, such as if an IoT sensor warns that a component of a crucial piece
of equipment is faulty and will break down if it doesn’t get serviced
soon.
5. Increased attempts to combine blockchain with ERP software
Even
though many people know about blockchain technology because of cryptocurrency,
its already proved useful in the supply chain sector. For example, blockchain
provides a higher level of transparency that can improve ethical sourcing in
the supply chain, cut down on fraud and more.
Some
well-known ERP vendors, including Oracle and SAP, are working hard to
incorporate
blockchain into their ERP offerings. Look for more of the same in the coming
months, particularly as other prominent brands from inside and outside the
supply chain sector continue realizing blockchain’s potential.
An exciting year ahead
The
five trends listed here are likely candidates for developments that will change
the supply chain management landscape, specifically by impacting ERP software.
They aren’t the only ones you should look for but be sure to prioritize keeping
a close eye on these to see how things evolve.
