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NETWORKED ERP ERP and improved business efficiency

Jun 28, 2022

For manufacturing organisations to comply with Industry 4.0, networked Enterprise Resource Planning (ERP) is essential for management and processes coordination. ERP systems can efficiently automate and streamline business processes for increased performance. This article explains how networked ERP is transforming businesses. - Kamlesh Kumar, CEO, Zumbido

ERP or Enterprise Resource Planning is a common term in industries across the spectrum. Planning the resources involves continuous transfer of information and data between multiple points and entities. This keeps the businesses functioning well and ensures that everything is synchronised. The traditional ERP model served an important purpose of managing the businesses in the past when internet and digitalisation were not so common. However, it had its own set of challenges because it required the data for each transaction to be entered at multiple points and required maintaining a paper trail.

Such a model makes the process of data management extremely cumbersome, and leads to duplication, errors and delays or losses due to lack of updated data on various occasions. Therefore, to increase productivity and reduction of human hours that are wasted due to these challenges, it is pertinent to move towards new technologies. Continuing with the traditional process can cause large and wasteful inventory build-ups as well because all the stakeholders’ data does not get updated simultaneously. Information does not flow smoothly between departments, or amongst external stakeholders, thus causing differences in results and inefficiencies.

Going digital

While the old, manual system worked well for industries in the past, the intermediate digitised version with the use of computers helped transfer data from manual or paper form to electronic formats. But, the changing demands of the current world scenario beg for a digital transformation of not just data formats, but of complete processes. The latest solution to this need is the network ERP which transforms processes by which information is shared with all stakeholders. Digitalised data entered at any one point of origin gets shared across all stakeholders & systems of the organisation, its suppliers, buyers, etc while the organisation retains the controls of disclosing that information at its discretion.

Digitalisation and smart networks can therefore solve some of the biggest problems faced by the businesses today. Through digitalisation, data, discussions and documents, amongst other things, can be shared and updated simultaneously across all stakeholders – internal & external – obviating the need to update business transaction data or scan and store transaction documents multiple times at each end, which previously resulted in data discrepancies, delays, duplication, and wasted time and effort. In order to simplify access and exchange with business partners, smooth data sharing is the future of corporate scalability and profitability.

Wider connectivity

It basically means that if data is fed into the system by one stakeholder or a department, it automatically gets updated across all the departments within the organisation and also gets updated with the stakeholders’ databases at the discretion of the organisation. Therefore, it completely removes all the challenges that occur from the use of old processes, streamlines the entire organisation, and ensures that updates are shared with everyone in real-time. Having a networked ERP ensures that data transparency is maintained across the organisation for all the stakeholders. The organisation can manage its data and control the flow to the best of its interests.

The immediate impact of this transparency is that everyone is aware of the required information, even gaps between the demand and supply verticals, and they can work towards filling those gaps. By adopting the digitalisation process with smart networks, organisations can have a networked ERP system. ERP software is a corporate management system that integrates and manages data across multiple departments. It lacks, however, the agility and flexibility required to satisfy the needs of dynamic corporate environments. Because traditional ERP methods often handle and retain data within an enterprise, different databases are kept for each transaction at various nodes of the supply chain or business ecosystem.

Standardised procedures, data sets and document generation are included in virtual SCM ERPs, resulting in a universal data sets, easy data sharing, analysis and forecasting, as well as in-depth industry research and data trend projections that are critical for strategic decision-making. Smart networking minimises the need to manage several software and data sets and simplifies the management of business activities such as customers, vendors, human resources, financial transactions, order processing, procurement and inventories.

Improving performance

Businesses that implement networked ERP benefit from scalable and high-performance design, zero data duplication, classification of item and supplier master data, holistic and integrated decision-making and less dependency on paper trails, thus reducing security risks. This is why a virtual SCM ERP is necessary, which establishes a smart network of information and data that connects a company’s complete ecosystem. Small businesses that can use digitalisation and networked ERP to streamline the majority of their manpower and processes can create efficiencies and increase profitability.

A smart and connected network can handle manufacturing, inventory management, supply chain, customer relationship management, audit trail, product management, warehouse management, sales management, distribution management, and many more difficult processes. At the same time, the system can help maintain accountability, security and efficiencies. Additionally, because all stocks are visible across the entire chain, inventory and stocks may be optimised, and redirected if necessary, using networked ERP, reducing time for all parties and lowering inventory expenses. As a result, the cost of goods sold is reduced and profitability improves. This saves both time and money for the party that needs these supplies, as well as the cost of inventory build-up for the party that has excess supplies but no need for them. It therefore generates tremendous business synergies and goodwill for all parties. Industry 4.0 guidelines emphasise data communication and integration as well. As a result, for manufacturing organisations to comply with Industry 4.0, a networked ERP is essential. In addition to the manufacturing industry, the service industry benefits greatly from a networked ERP system, saving money and time, increasing profitability and goodwill, and helping in business expansion.

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  • Kamlesh Kumar

    CEO

    Zumbido

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