What is an ERP System

Undoubtedly, the secret to the successful running of an e-commerce business lies within prompt order fulfilment and warehouse efficiency. With today’s reliance on technology, it’s unsurprising that the key to warehouse productivity lies within automated processes and intuitive systems.

The functionality of most warehouses comes down to the use of an ERP (Enterprise Resource Planning) system, which is essentially software that helps integrate a variety of business processes into one simple system.

This article covers the functions of an ERP system as well as the benefits to businesses and warehouse productivity.

What does an ERP system do?

The main advantage of an ERP system is that it integrates a range of business processes that can all be managed and viewed via one single piece of software. With its ability to cover a range of functions, an ERP system is used by a variety of businesses. Some of the central business functions managed by an ERP system include:

• Accounting
• Human Resources
• Customer Relationship Management
• Supply chain
• Manufacturing

In terms of warehouse productivity, an ERP system can be most beneficial for the following processes:

• Inventory management
• Storing and locating stock
• Shipment tracking
• Product returns
• Quality control

What are the benefits of an ERP system?

Traditionally, separate software would have been needed for each business process; however, an ERP system allows for the integration of various functions, giving everyone in the company complete visibility.

ERP uses real-time data so different departments can stay informed on each aspect of the business. It is advantageous in terms of warehouse fulfilment so that all staff can be in the know regarding the order and stock updates.

Data analysis

An ERP system allows e-commerce businesses to monitor stock levels, giving you an insight into what items are selling well, helping you to identify trends in customer purchases.

Automating processes

One of the most significant benefits to an ERP system is its ability to automate tasks, which can reduce the risk of human error. This benefit is profitable for labour-intensive tasks such as inventory counting.

End to end efficiency

From the moment stock enters the warehouse, to being picked, packed and shipped, an ERP system can track each stage of the order fulfilment process, maximising efficiency and ensuring a complete end to end visibility.

Grow your business

E-commerce business that outsources their order fulfilment to a 3PL (third-party logistics provider) can benefit from improved customer service, having peace of mind that orders will be delivered promptly and efficiently. As a result, this allows you to focus on other areas of priority and growth within your business, such as marketing.

How does an ERP differ from a WMS?

In addition to an ERP, many warehouses also use a WMS (Warehouse Management System) to help make the order fulfilment process as efficient as possible. Though many people may use the terms interchangeably, both an ERP and WMS are separate systems.

A WMS is primarily used to organise movements within a warehouse, strictly inventory management, storage of goods, picking, packing and shipping. The aim of a WMS is that items can be stored and located as quickly as possible, encouraging fast shipments to customers and reducing the likelihood of errors.

Whilst an ERP also includes these functions; it can incorporate all other aspects of the business, so everything is accessible under one system.

What prevents businesses from using an ERP system?

Many businesses have various concerns when it comes to ERP implementation. Some of the main hesitations are as follows:

How do I choose the right ERP for my business?

There are many ERP system providers on the market, which can leave businesses confused about which is the right system for them. Companies must conduct a full review of their processes to fully understand what they want to achieve from their ERP system and assess if the benefits will outweigh the costs.

ERP systems are too expensive

Whilst investing in an ERP system isn’t cheap, businesses can customise their software, so it’s entirely suited to their needs, preventing any unnecessary costs. Many software companies allow for subscription plans, paying on a monthly or annual basis, with the ability to increase or reduce your price tier depending on your business needs.

I don’t want to learn a new system

The beauty of an ERP system is that it allows businesses to take their existing network and processes and consolidate it into one easily accessible software. The aim is to make working life more straightforward and efficient.

If you think your business could benefit from outsourcing your order fulfilment with automated solutions and innovative technology, please give Pointbid a call on 0121 326 7368.

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