Last year showed that proper supply chain management is essential for the successful operation of companies, promoting the visibility of the entire supply chain from the procurement of raw materials through transport and production to the fulfillment of orders. The process can be greatly aided by the introduction of a cloud-based ERP system that allows real-time monitoring of the supply chain.
Impact of COVID-19 on supply chains
Prior to 2020, many SME owners and managers did not place enough emphasis on supply chain management or believed that their supply chains had already been perfected in their operations. However, during the COVID-19 pandemic, supply chains have once again become a priority. According to our 2020 research, 97 percent of those surveyed reported that a point in their supply chain was damaged. According to our experts, this ratio may be so high because the existing networks were created based on stable business conditions and the fixed logistics chains could not react quickly enough to the suddenly changed business environment. The slowdown in supply chains has also resulted in the production of end products being stalled due to the loss of a link, resulting in widespread shortages and delays for businesses worldwide.
The epidemic has thus made decision-makers aware that In order to reduce the risk of supply chains, a well-structured strategy is needed, as an unexpected event can occur at any time, tipping a well-established network out of stability. In terms of their origin, the risks that disrupt operations are classified into 4 groups: economic, environmental, ethical and political risks. COVID-19 together addressed environmental, economic and political operational risk.
How does an ERP system help a company’s supply chains?
Supply chain strengthening depends on access to up-to-date, reliable information. One tool for this is the ERP system, which allows all nodes in the supply chain to be tracked, providing a real-time picture of operations between endpoints, and minimizing the occurrence of supply chain risks.
“The ERP system is global It also provides insights into the business — such as manufacturing, sourcing, finance, HR, sales, and marketing.It allows managers to see how changes or problems in their supply chain affect other aspects of the organization, such as cash flow and the cost of goods sold. This detail is essential for companies looking to build a more resilient supply chain, “said Dénes Simonyi, Head of Technology Consulting, Deloitte.
The supply chain management (SCM) module helps for retailers to organize purchase orders, monitor actual production and compare it with demand, and rank orders based on when the warehouse received them. It also helps with return management and increase sales.
Cloud-based solutions
An additional advantage of ERP systems is that the supply chain management module can be integrated with, among other things, purchasing and inventory management modules, which results in further improvements in operational success.
Efficiency can be further enhanced by cloud-based ERP (NetSuite), which uses SaaS (software-as-a-service) technology, enabling business data to be accessed over the Internet by users with specific privileges. This will avoid cyber security threats and further facilitate real-time monitoring.
How has the ERP system helped to ensure the continuity of the supply chain with COVID?
If a company uses the right ERP system for it, it is more likely to react quickly to unexpected business conditions, and thus to the smooth running of the company’s business. . This correlation has also been observed in the context of the COVID-19 pandemic, as using the ERP system, companies can gain a more accurate picture of their customers’ needs through in-depth analysis of customer data and can even predict major changes in consumer demand. Thanks to the information obtained in this way, they expect to be able to optimize the entire supply chain.
According to Máté Kovács, CEO of Nanushka, although they have supply chains across several continents and affecting several time zones, the ERP system problems were detected in, as they accessed all the data from one application in real time, allowing them to respond quickly. They were able to prepare and mobilize other resources to restore their supply chain processes as quickly as possible. He also said that for Nanushka, the 3 most important focus areas are related to an ERP system: the availability of real-time data, and monitoring the state of the supply chain through the alerts it provides. Using the right information, optimize transportation plans and reduce lead times as much as possible. In addition, highlighting cost disparities and consequently reducing supply chain costs.
Future AI-based supply chains are now evolving
“According to Deloitte’s analysis, supply chain transformation is expected in the near future, when data sharing between network actors will take precedence over the supply chain, thus making the whole product chain visible. However, this is conditional on to make the technology of the chain members interoperable and to create a higher level of trust between the members of the chain, “said Dénes Simonyi.
Modern ERP systems have data analysis and AI-based analysis capabilities, which contribute to future AI-based supply chains. AI-based supply chain forecasting is able to monitor huge data sets, examine the relationships and operational information between them, helping you make decisions. With AI technology, it is possible to create intelligent supply chain forecasting that delivers higher value and quality to products. In addition, the integration of machine learning into supply chain management enables the automation of everyday tasks, thus helping the company’s decision makers.
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