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Supply chain resilience

When supply chain issues persist, ERP delivers micro-benefits that offer big results

ERP modules and add-ons can give fabricators the ability to know whether their suppliers have the right set of items and if those items have the correct characteristics to guarantee end customer quality.

Don’t let the news headlines fool you – supply chain challenges aren’t new, and they will persist past the challenges that have caused them over the past few years. Factors such as the demand chain, workforce fluctuations and international trade regulations have and will always contribute to disruptions that affect everyone from the consumers themselves to enterprises across virtually every industry.

Nevertheless, the Covid-19 pandemic has shone a much-needed spotlight on how businesses of all sizes need to prepare themselves against supply chain challenges. Investing in cloud technology such as enterprise resource planning (ERP) is one strategy many manufacturers and fabricators are employing to combat these disruptions. In fact, Epicor Software saw a 35 percent increase in adoption of its cloud ERP solution for manufacturers in the last 12 months.

This influx can be explained by ERP’s well-known benefits for supply chain management, such as increased visibility, process automation and enhanced collaboration for more streamlined operations. However, your organization may also benefit from some of the more nuanced functions and capabilities that industry-specific cloud ERP has to offer for supply chain fortification that are often overlooked when embarking on a digital transformation journey.

Fine-tuning ERP

Manufacturers and fabricators and have relied on ERP since its inception, as its macro-benefits help to simplify some of the most critical, intricate operations of the business. From pricing to procurement, ERP offers accelerated decision making so they can focus attention on growing their business, rather than managing their supply chain on a day-to-day basis.

As a product development director at Epicor, I see first-hand how the technology can transform business trajectory, especially with today’s supply chain difficulties. That being said, here are three lesser-known tools that you may have overlooked that can help you accelerate and better prepare against ongoing supply chain disruptions.

  • Managing supplier performance: With inflation and demand at an all-time high, managing your supplier portfolio has never been more important. Supplier performance directly affects your output, and all it takes is one underperforming entity to slow down your business. Sophisticated ERP systems should offer supplier management solutions to establish a single source of truth for supply chain managers. This will increase your top line by driving cost savings, increasing productivity, and improving business relationships and overall supplier performance. Epicor’s Supplier Portal is one option for manufacturers and fabricators looking to promote supply chain growth, resilience and flexibility with data-driven decisions.
  • Second source plus strategy: Every manufacturer needs an ERP system with automated, characteristics-based processes that can help identify a second source from a vendor that will meet customer needs. In today’s supply chain ecosystem, having more than one source for an item is no longer a preventative measure, but a necessity. According to Chris Prodoehl, vice president of IT, Chicago Tube and Iron, an Epicor customer, “We always try to keep multiple sources open and leave longer lead times with foreign sources and shorter lead times with local suppliers. It has been key to our success in dealing with supply chain challenges.”
  • Inventory optimization and long-term planning: ERP modules and add-ons, such as Epicor’s capabilities to support dimensional inventories, give visibility into not only if suppliers have the right set of items, but also if those items have the correct characteristics to guarantee end customer quality. Bilal Mehmood, president, Kadant Solutions Division, explained how his company used these tools.
Thanks to the supply chain management benefits ERP solutions can offer, adoption of this type of software is growing.

“One of the tools that we benefitted from was long-term planning, and we significantly relied on Epicor technology in doing that,” he said. “Looking at our historical buying patterns and volume to leverage these into long-term contracts and blanket purchase orders helped us navigate through supply chain challenges. We were still impacted, but much less than we could have been.”

In addition to ERP add-ons and modules, there is other software such as materials requirement planning (MRP), master production scheduling (MPS) and advanced planning and scheduling (APS) that work in tandem with cloud ERP for better planning and greater buying power.

Digital journey

Although these micro-benefits might seem specific and extrapolated, together these ERP tools yield big results for manufacturers’ and fabricators’ supply chains. However, not all ERP solution providers are the same, and half the battle of utilizing ERP for supply chain management is picking the right one. When embarking on a digital transformation journey, look out for these green flags:

  • Industry-specific knowledge: One-size fits all solutions usually create more problems than they solve. It’s important a company knows your business and its core challenges, so that the ERP system can be personalized to fit your specific needs.
  • Diverse portfolio: Seeking a company with a diverse portfolio of modules and add-ons is critical. A diverse portfolio shows a company recognizes a variety of needs and will offer micro-benefits in addition to ERP macro-benefits.
  • Price-points: Customized solutions should not be the norm, and you shouldn’t have to pay custom prices for a solution that fulfills your end goal.

When picking a supply chain solution, don’t overlook the fine print – selecting a personalized, forward-looking vendor can equip your business with the tools it needs to succeed. Even when economic conditions are ideal, smart supply chain management can result in a variety of competitive benefits from better supplier relationships to better data visibility and everything in between.

Epicor Software Corp.