ERP FOR LOGISTICS AND SUPPLY CHAIN MANAGEMENT

ENTERPRISE RESOURCE PLANNING
MBA LOGISTICS AND SUPPLYCHAIN
ERP IN LOGISITICS AND SUPPLYCHAIN
PRESENTATION BY:SAVVYASACHIN VARMA

UNDERSTANDING SCOPE OF ERP THROUGH
SUPPLY CHAIN MANAGEMENT
• Supply chain management is a complex process that consists of multiple elements
and prospects including but not limited to distributors, retailers, warehousing,
customers, manufacturing and the rather obvious supplier
• With an ERP system in place, most of the redundant tasks can be fought off
through automation leaving your staff productive and with enough time that can
be reallocated to tasks that require immediate attention.
• Linking supply chain process with an ERP software allows the business owner to
gain better clarity and improve productivity within the whole cycle/process.
Everything from purchasing raw materials to selecting manufacturers can be a
dreaded task if they were to be done manually since they take up a ton of time
and usually leave no room for tasks that require your attention

Here are a few of many reasons as to why businesses into
supply chain are moving into the cloud
•Agility and distributed workload due to tasks being equally distributed
among staff at all levels
•Cost-effectiveness, which also is one of the major USP’s of ERP is another
reason for its popularity within in SCM sector
• Flexible solutions are crucial for an industry as diverse and ever-evolving as
SCM

Operating in real-time with the ability to be interconnected
with departments throughout the organization is vital for
running an effective SCM business
here is what you must look for in an ERP software before taking
the plunge

• Visibility: When all employees are on the same level of understanding within an
organization, growth can be achieved at a rate faster than imagined. SCM
workflow involves a range of diverse people from multiple groups, warehousing,
inventory, procurement, etc. who may have a hard time trying to stay unified
without an effective erp software in place. ERP allows for all business processes to
be streamlined and uniform ensuring employees on all level have access to the
data at every point in a business day. This allows for key decisions to be taken
quickly without the fuss of having to go through each department for approval and
queries.
• ERP Compatibility with SCM Industry: Briefly, Supply chain management will
include procurement, supply/receiving of goods, inventory management and much
more. Many ERP software’s. Most ERP software’s in finance are equipped to
handle these processes. However, a business that may have a specific requirement
should analyze and demand a customized module that fits their needs best.
• Procurement and Purchase solutions: Influx and outflow of materials/good are a
redundant yet undoubtedly the core process of the business, equipping the
process with ERP helps streamline the process ensuring it happens in an optimal
manner.

In a nutshell
• As mentioned earlier the inter-departmental nature of the supply chain business
makes it a tough one to maintain uniformity without an ERP software in place.
Strategically in order to grow any business, it is vital to allocate attention to all
areas within the business.
• ERP, through automation and a multitude of its feature, makes way for more focus
to be allocated to areas within the supply chain that requires more attention and
effort while taking care of the redundant tasks for you.

Value Chain Analysis
• Value chain analysis is a process of dividing various activities of the business in
primary and support activities and analyzing them, keeping in mind, their
contribution towards value creation to the final product. And to do so, inputs
consumed by the activity and outputs generated are studied, so as to decrease
costs and increase differentiation.
• Value chain analysis is used as a tool for identifying activities, within and around
the firm and relating these activities to an assessment of competitive strength.

As shown in the figure, Michael Porter classified the entire value chain into nine
activities which are interrelated to one another. While primary activities include the
activities that are performed to satisfy external demand, secondary activities are
those which are performed to satisfy internal requirements.

Classification of Value Chain Analysis
Value Chain Analysis is grouped into primary or line activities, and support activities

PRIMARY ACTIVITIES
The functions which are directly concerned with the conversion of input
into output and distribution activities are called primary activities. It
includes:
• Inbound Logistics: It includes a range of activities like receiving, storing,
distributing, etc. which make available goods and services for operational
processes. Some of those activities are material handling, transportation,
stock control, etc.
• Operations: The activity of transforming input raw material to final
product ready for sale, is termed as operation. Machining, assembling,
packaging are the activities covered under operations.
• Outbound Logistics: As the name suggests, the activities that help in
collecting, storage and delivering the product to the customer is outbound
logistics.
• Marketing and Sales: All the activities like advertising, promotion, sales,
marketing research, public relations, etc. performed to make the customer
aware of the product or service and create demand for it, comes under
marketing.
• Service: Service means service provided to the customer so as to improve
or maintain the value of the product. It includes financing service, after-
sales service and so on.

SUPPORT ACTIVITIES
Those activities which assist primary activities in accomplishment, are
support activities. These are:
• Procurement: This activity serves the organization, by supplying all the
necessary inputs like material, machinery or other consumable items, that
required by the organization for performing primary activities.
• Technology Development: At present, technology development requires
heavy investment, which takes years for research and development.
However, its benefits can be enjoyed for several years and by a multitude
of users in the organization.
• Human Resource Management: It is the most common plus important
activity which excel all primary activities of the organization. It
encompasses overseeing the selection, retention, promotion, transfer,
appraisal and dismissal of staff.
• Infrastructure: This is the management system, which provides, its
services to the whole organization and includes planning, finance,
information management, quality control, legal, government affairs, etc.

In the fast paced world, the main focus of
the organization is customer satisfaction, and value chain
analysis is the technique that helps to attain that level.
Under this, each business activity is considered as
essential, which contributes value and is constantly
analyzed, to increase value as regards the cost incurred.

ISSUES IN SELECTION AND IMPLEMENTATION OF
SUPPLY CHAIN SOLUTIONS
The pace of change is accelerating in the world, leaving supply
chain organizations that rely on legacy and manual processes
unable to keep up. Add in the possibility of disruptions like a
pandemic or a recession, and it’s no wonder that more and
more companies are embracing cutting-edge supply chain
management software to digitize and efficiently run their
supply networks.

Selecting a SCM System
Never has so much technology been developed to help organizations improve
supply chain performance. Yet, the performance of most supply chains has never
been worse. Due to poor coordination and planning, dysfunctional industry
practices, and high costs resulting from adversarial relations among partners, most
supply chain organizations generate low profit margins, surviving, not thriving. To
help you choose the right SCM system for your company, the rest of this post
delineates the steps you should follow in the selection process.
Assess Your Needs
When choosing supply chain technology, it’s imperative to understand your
organization”s needs. Although most SCM systems deliver a complex set of
modules, allowing companies to manage different business areas, ranging from
financials, manufacturing, inventory, transportation, marketing, and sales to
human resources and customer management, not all solutions are the same. What
can you do to choose a solution that best suits your organization? Instead of
developing a time-consuming list of features your organization may need, you
should create SCM narratives by verifying how your employees perform their daily
tasks. This approach will provide a lot more context for the features you need in
order to achieve specific short- and long-term objectives regarding productivity,
revenue, cost, and customer service.

Understand the Impact of Technology
Implementing a SCM system into your organization will have a significant impact
on different areas, affecting business growth. Will the solution deliver powerful yet
user-friendly functionality? Is it scalable and flexible enough to support horizontal
and vertical growth? Can it help you streamline processes, improve productivity,
increase efficiency, and reduce costs to boost revenue and profit? Although your
organization will be affected by competition, trends in the industry, and volatility
of the global market, asking yourself all these questions is imperative to find a
solution that delivers exceptional agility so that you can offer your customers
unparalleled service.
Read Unbiased Reviews
Most vendors will provide you with comprehensive information about the supply
chain technology they sell only if you know what questions to ask. If you know
very little about SCM systems, the best thing you can do is to read reviews and
case studies published by unbiased sources. Some topics to research include the
capabilities, benefits, and drawbacks of the SCM system you plan to get; vendor
costs for data migration, customization, training, and support; software licensing
options and hardware requirements; and the reasons why SCM implementation
fails.

When searching for the right supply chain technology, a few
additional factors you should consider include:
• Visibility – Getting in-depth insight into the business operations not only allows
you to control different processes, but also gives you the confidence that the best
decisions are made at the most opportune moment.
• Collaboration – Opting for a SCM solution that encourages collaboration enable
employees to work in a pleasant yet productive environment.
• Flexibility – A SCM system should support feature selection, module development,
and policy and formulas modifications.
• Scalability – To facilitate growth, a SCM solution should provide a reliable scalable
infrastructure, functioning both on premise and in the cloud.

Challenges with implementation of new software commonly include:
• Software can play an important part in improving supply chain
processes. However, taking on new technology generally brings with it
some level of risk, especially if it challenges existing processes and
business culture.
• Challenges with implementation of new software commonly include:
• suppliers and partners unwilling to compromise
• staff struggling to adjust to new processes and tools
• lack of practice and training before implementation
• difficulties with communication internally and externally
• customers concerns, issues and poor experience
• To avoid these risks, you should consult, negotiate and communicate
with all members of the supply chain before the new system goes live.

E-BUSINESS AND ERP
• E-business has changed the definition of enterprise systems.ERP focuses on core
business functions, while E-business pushes the ERP from inside core of the
organizations to the network edge.
• By making use of E-business approaches, organizations can have the ERP
integration benefits of flexibility, reduction in cost, more effective and quick
responses etc.
• By integrating ERP with E-business, a new extended ERP system emerges that
creates business which is more lively, more focused and highly competitive than
traditionally structured business.
• By using Internet and WWW services, organizations are implementing
PDM(Product Data Management),SCM (Supply-Chain Management) and
CRM(Customer Relation-Management capabilities.
• These systems enable companies to link their operations seamlessly with
customers and suppliers.

• The use of the Internet for communication, collaboration, and trading with
customers and business partners is causing a fundamental shift in how
organizations define and manage their business processes. As a result business
systems and processes can no longer remain isolated and disparate; they must
consider their trading partners and customers ,As a result they need systems that
support e-business transactions.
• ERP systems make use of Internet technology and the component-based
architectures of the newer software to simplify the purchasing process, new ways
of entering sales order building an shipping products.
• In addition, Internet and web-based procurement give benefits to companies,
allowing them to reduce costs by controlling purchasing habits, leveraging total
spending power, and reducing the number of suppliers they must manage.
• The companies were using web based interfaces with outside parties and integrate
modules such as SCM, CRM ect. Thus we have eSCM, B2B, eProcurement and
customer relationship management (CRM).
• Research shows that ERP systems can improve efficiency, information integration
for better decision making, and faster response time to customer queries and
reduces costs to organizations and enforce a discipline of best practice and
consistency.
• Many companies were developing their system designed by integrating ERP
systems with Ebusiness.

The initial ERP systems were standalone systems that contained the modules
like Financial, Manufacturing, Human Resource, Material Management,
Production planning etc. Slowly technologies like SCM, CRM, PLM, BI etc began
to be interfaced with ERP systems to improve efficiency, effectiveness and
competitiveness of the systems.

• Product data management (PDM) is the use of software or other tools to track and
control data related to a particular product. The data tracked usually involves the
technical specifications of the product, specifications for manufacture and
development, and the types of materials that will be required to produce goods. The
use of product data management allows a company to track the various costs
associated with the creation and launch of a product.
• Customer Relationship Management (CRM) is a new type of management system
aimed at improving the relationship between enterprises and customers. The main
purposes of CRM is customer relationship setting up, development and maintenance
.So it is just the objects that they focused on are different. CRM is more concerned
about markets and customers compared with ERP.
• Product life cycle management (PLM) is the succession of strategies used by
business management as a product goes through its life cycle. The conditions in
which a product is sold (advertising, saturation) changes over time and must be
managed as it moves through its succession of stages.
• Supply chain management is the systemic, strategic coordination of the traditional
business functions and the tactics across these business functions within a particular
company and across businesses within the supply chain, for the purposes of
improving the long-term performance of the individual companies and the supply
chain as a whole

• The main focus of E-business is on efficiency and effectiveness of external, cross
enterprise processes.
• While ERP systems support business strategy, new strategic opportunities are
made accessible E -business , which makes ERP to take one step further to move
from the standalone ERP system model to the extended ERP system model.
• The bridge between companies and their business partners is provided by Web
technology to make E-business possible, while E-business makes the ERP system
more transparent and outward.
• Instead of thinking about ERP within a company, we may view the ERP system
along the value chain of companies in the same industry, or across industries.
• Organizations are now rotating their attention outward to engage in business with
customers, suppliers and business partners through the use of the Internet and
WWW services.
• As most of the core business processes are being carried out on Web so, ERP
functionality has to move onto the Web.

SOFTWARE AS A SERVICE
(S.A.A.S)
• Software-as-a-Service (SaaS) is a software licensing model in which access to the
software is provided on a subscription basis, with the software being located on
external servers rather than on servers located in-house.
• Software-as-a-Service is typically accessed through a web browser, with users
logging into the system using a username and password. Instead of each user
having to install the software on their computer, the user is able to access the
program via the internet.
• Software-as-a-Service (SaaS) is a software licensing model, which allows access to
software a subscription basis using external servers.
• SaaS allows each user to access programs via the internet, instead of having to
install the software on the user's computer.

• SaaS has many business applications, including file sharing, email, calendars,
customer retention management, and human resources.
• SaaS is easy to implement, easy to update and debug, and can be less expensive
(or at least have lower up-front costs) since users pay for SaaS as they go instead of
purchasing multiple software licenses for multiple computers.
• Drawbacks to the adoption of SaaS center around data security, speed of delivery,
and lack of control.
SaaS has numerous applications, including:
• Email services
• Auditing functions
• Automating sign-up for products and services
• Managing documents, including file sharing and document collaboration
• Shared company calendars, which can be used for scheduling events
• Customer relationship management systems, which are essentially a database of
client and prospect information. SaaS-based CRMs can be used to hold company
contact information, business activity, products purchased as well as track leads.

SaaS Advantages
• Accessible from Anywhere
• Cost Effective
• Easy to Implement, Update,
and Debug
• Easy to Scale
SaaS Disadvantages
• Increased Security Risks
• Slower Speed
• Loss of Control
• Lack of Customization

BUSINESS MODELS OF ERP
• Each ERP module is designed for specific business functions, providing the data
and supporting the processes that will help those employees do their jobs. Every
module plugs into the ERP system, so the system provides a single source of
accurate data, even as the business adds new modules. If the ERP system is the
toolbox, the modules are the screwdriver, wrench, hammer and other tools in the
box that each have specific uses.
How Do ERP Modules Help Businesses?
• The modular design of ERP allows it to meet the shifting needs of a business and is
a big reason this software has become ubiquitous. An organization can purchase
only the modules relevant to its business model, operations and key challenges. It
can then add ERP modules to address new needs or challenges as the organization
evolves.

1. Finance
• The finance and accounting module is the most important ERP module because it
allows businesses to understand their current financial state and future outlook.
Key features of this module include tracking accounts payable (AP)and accounts
receivable (AR) and managing the general ledger. It also creates and stores crucial
financial documents like balance sheets, payment receipts and tax statements.
• The finance module can automate tasks related to billing, vendor payments and
account reconciliation, helping the accounting department close the books in a
timely manner and comply with current revenue recognition standards. It also has
the data that financial planning and analysis employees need to prepare key
reports, including profit and loss (P&L) statements and board reports, and run
scenario plans.
2. Procurement
• The procurement module, also known as the purchasing module, helps an
organization secure the materials or products it needs to manufacture and/or sell
goods. Companies can keep a list of approved vendors in this module and tie those
suppliers to certain items. The module can automate requests for a quote, then
track and analyze the quotes that come in.
• Once a company accepts a quote, the procurement module helps the purchasing
department prepare and send out purchase orders. It can then track that purchase
order as the seller turns it into a sales order and ships the goods, automatically
updating inventory levels once the order arrives.

3. Manufacturing
• The earliest version of ERP, material requirements planning (MRP) systems, were
designed for manufacturers, and manufacturing remains a key piece of ERP. Today,
ERP systems typically have a production management or manufacturing execution
system (MES). The manufacturing module helps manufacturers plan production
and make sure they have everything they need for planned production runs, like
raw materials and machinery capacity. During the manufacturing process, it can
update the status of goods-in-progress and help companies track actual output
against forecasted production. It also provides a real-time picture of the shop floor,
capturing real-time information on items in progress and finished goods. It can
calculate the average time to produce an item and then compare supply with
forecasted demand to plan adequate production.
4. Inventory Management
• The inventory management module enables inventory control by tracking item
quantities and location down to individual SKUs. This module offers a complete
picture of not only current but also incoming inventory, through an integration
with the procurement tool. This piece of software helps businesses manage
inventory costs, making sure they have sufficient stock without tying up too much
cash in inventory. An inventory management application can weigh sales trends
against available product to helps companies make informed decisions that boost
margins and increase inventory turn (a measure of how often inventory is sold
over a certain period). It can help prevent stockouts and delays, which enhances
customer service.

5. Order Management
• An order management module tracks orders from receipt to delivery. This piece of
the ERP feeds all orders to the warehouse, distribution centre or retail store after
customers place them and tracks their status as they’re prepared, fulfilled and
shipped to the customer. The order management module prevents orders from
being lost and boosts on-time delivery rates to keep customers happy and cut
unnecessary expenses for expedited shipping.
• More advanced order management applications can help a company determine
the most cost-effective option for fulfilling an order—a store vs. a warehouse vs. a
third-party fulfilment partner, for example—based on available inventory and the
buyer’s location.
6. Warehouse Management
• A warehouse management module can deliver a rapid return on investment for
businesses that operate their own warehouses. This application can efficiently
guide warehouse employees through all warehouse processes based on the layout
of the facility, from put away when shipments arrive to picking to packing and
shipping. It can also help companies plan labour based on expected order volume.
The warehouse management module can support different picking strategies like
batch picking, wave picking and zone picking depending on which is most efficient
for a given business, and some modules can show employees the most efficient
pick path.
• When the warehouse management module is integrated with inventory
management and order management applications, employees can quickly find the
right products and get shipments out the door quickly. Faster delivery ultimately
increases customer satisfaction.

7. Supply Chain Management
• A supply chain management module tracks each step in the movement of supplies
and goods throughout the supply chain, from sub-suppliers to suppliers to
manufacturers to distributors to retailers or consumers. It can also manage any
materials or products returned for refund or replacement.
• As noted earlier, supply chain management can include a wide array of modules
like procurement, inventory management, manufacturing, order management and
warehouse management. However, it may have functionality beyond the core
capabilities of those modules.
8. Customer Relationship Management (CRM)
• The customer relationship management (CRM) module stores all customer and
prospect information. That includes the company’s communication history with a
person—the date and time of calls and emails, for example—and their purchase
history. A CRM improves customer service because staffers can easily access all the
information they need when working with a customer.
• Many businesses also use CRM to manage sales leads and opportunities. It can
track communication with prospects and suggest which customers should be
targeted for certain promotions or cross-sell opportunities. More robust CRM
modules may support customer segmentation (enabling more targeted marketing)
and advanced contact managers and reporting tools.

9. Professional Services Automation (Service Resource Management)
• A professional services automation (PSA) module, also called a service resource
management module, allows an organization to plan and manage projects.
Services-based businesses often use this module. The application tracks the status
of projects, managing human and capital resources throughout, and allows
managers to approve expenses and timesheets. It facilitates collaboration between
teams by keeping all related documents in a shared place. Additionally, the PSA
module can automatically prepare and send bills to clients based on rules around
the billing cycle.
10. Workforce Management
• A workforce management module is similar to a human resource management
module but is designed for companies with more hourly than salaried employees.
It can monitor workers’ attendance and hours and measure things like employee
productivity and absenteeism.
• Payroll could also fall under the workforce management module. A payroll sub-
module automatically distributes pay checks to employees on a set schedule with
the appropriate taxes deducted and handles expense reimbursement. It can also
provide reports on payroll expenses, total overtime hours and similar KPIs.

11. Human Resources Management
• A human resource management (HRM) or human capital management
(HCM) module usually encompasses all the features of workforce management
application and offers additional capabilities. HRM could be viewed as CRM for
employees. This popular module has detailed records on all employees and stores
documents like performance reviews, job descriptions and offer letters. It tracks
not only hours worked but also paid time off (PTO)/sick days and benefits
information.
• Since the HRM module stores a vast amount of information on every employee
across the organization, it eliminates a lot of duplicate or inaccurate data that
many organizations store in various spreadsheets.
12. Ecommerce
• Certain ERP vendors offer an ecommerce module for businesses that want to sell
online. This module allows companies to quickly launch a business-to-business
(B2B) or business-to-consumer (B2C) ecommerce website. Leading commerce
applications include user-friendly tools that allow employees to easily add new
items, update product content (item descriptions, titles, specs, images, etc.) and
change the look and feel of the website.
• When the ecommerce application is integrated with other ERP applications, all
payment, order and inventory information feeds [from the ecommerce module]
into the shared database. That ensures all transactions are added to the ledger,
out-of-stock items are removed from the site and orders ship on time.

13. Marketing Automation
• Like with ecommerce, certain software providers have developed a marketing
automation module. A marketing module manages marketing campaigns across
digital channels like email, web, social media and SMS. It can automate email
sends based on campaign rules and has advanced customer segmentation
features, so customers only receive relevant messages.
• Marketing automation software, whether part of the ERP system or a separate
solution, can provide detailed reports on the performance of campaigns to shape
future marketing plans and spend. These applications increase leads, customer
loyalty and, over time, sales.

Choosing the Right ERP Modules for Your Business
• While the ERP modules a business should invest in will vary based on business
model, industry, current obstacles and other factors, there are a few modules that
makes sense for most organizations. Every company needs a finance and
accounting module to operate, monitor its financial health and ensure its bills are
paid. It’s difficult to run a business without software that can provide financial
information and execute basic accounting tasks.
• Though not as critical as finance and accounting, almost every company—
regardless of industry, and whether it’s product- or services-based—depends on
some type of customer, so CRM is another module that would benefit most
businesses. Similarly, the workforce management or HRM module is a worthy
investment for most companies with more than a few employees. Employees must
be paid on time, and employers need a central place to track their information and
career development.
• Any products company—a category that includes almost all manufacturers,
distributors and retailers—will benefit from a supply chain management module.
Most organizations start with inventory and order management modules, since
those are crucial to daily operations, and might later add solutions for
manufacturing, warehouse management and procurement.
• Services businesses like consultancies, agencies and maintenance and repair
companies could realize a fast return on investment with a project management
module. It automates complex, time-intensive billing processes and simplifies
resource planning for projects.

SECURITY AND PRIVACY ISSUES IN ERP
• To be a leading entrepreneur and to increase a business, one should focus on
processing their business with proper planning and execution. The best way is to
analyze the data and strategize accordingly for better results. But it is difficult
sometimes to store so much of data and hence the data gets misplaced. So we
have ERP.
• Enterprise Resource Planning (ERP) is a software solution that provides
manufacturers with the information necessary to effectively manage their business
processing. ERP is a fully integrated real-time system giving the information
needed to grow business. ERP connects agility by collecting information from
every department, every process throughout the entire enterprise. This means, up
to the moment, seamless communication and accurate picture of the valuable
resources and tools with better project plans. This is total business intelligence
with quote to figure out management potential and sleek office automation. ERP
equips you with ability to instantaneously track orders and monitor the acquisition
of raw materials, parts, services and labour.

Here are some security and privacy issues associated with ERP:
Security Challenges
• Today, opportunity in hacking business is at peak. ERP in particular is a paramount.
ERP systems are the focal point of the businesses that use them. Pirated access can
affirm medical records, open the door to larceny at financial institutions and
undermine industrial firms.
• Hackers have deviated their focus from individuals to enterprises. An increase in
number of targeted attacks, including ones against ERP systems is expected. There
are a lot of resources on the Internet providing all the required information to
attackers to customize their techniques on the ERP’s architectures. We can say that
ERP is vulnerable.
• It is now time for firms to take ERP security on a serious note. Some of the
challenges in ERP security are as follows-
Inadequate Response Planning
• The first ERP security threat is lack of planning. Many of the businesses cannot run
properly due to lack of planning. Firms do not have effective methods in place to
detect ERP vulnerabilities and incursion. The worse scenario is that, many don’t
have an adequate incident response plan in place for when there is a suspicious
activity.
• There is often a paucity in business in a proper incident response that includes the
ERP layer. Logging for forensic purposes is not defined properly.

Ransomware Attacks
• There is no such system which is immune to the ransomware epidemic. Experts
believe that the volume of ransom attacks against ERP systems is going to rise from
here onwards.
• At present, researchers at ERPs have leaked a proof-of-concept attack against SAP
systems. A remote command execution vulnerability allows the auto loading of any
program from the server onto the workplace in SAP’s standard client application.
The cybercriminal can download malware to the device that can automatically be
installed on every endpoint with SAP graphical user interface when a user runs the
application.
Insider Threats
• One of the most widespread internal attacks is payroll fraud. Malicious workers or
former employees who still have access to the ERP system are another top security
threat. Even if it is tough to stop, businesses are already concerned about it.
Insider threats top the list of security risks.
• An employee can change its wage. A direct modification can be easily detected.
Many of these breaches by employees instead inflate the number of additional
working hours, raising total wages secretly. The fraud therefore is extremely
difficult to detect.

Poor Patch Management
• The process of repairing vulnerabilities in an infrastructure of an organization in
order to maintain network security is called as patch management. One of the
biggest ERP threats today is inactive security patches. ERP systems are not often
up-to-date. Many businesses have an inadequate process for monitoring these
updates and putting them into place. IT security teams have their own patch
management programs. These programs usually exclude ERP systems. According to
security perspective, poor patch management can be costly.
Poor ERP Security Delegation
• Defining the handling of ERP security is one of the biggest security challenges in
the current year. The consequence is that many preventive measures fall through
the cracks.
• SoD and user management are two terms which are mostly focused by security
teams inside ERP-specific departments. IT security teams mainly focus on the OS
and networking layer rather than ERP application itself. Today, the key challenge
for ERP security is the grey area between those teams. Defining the same, it is
critical in closing the gap between them.
• The information security teams are not fully aware of the importance of ERP
security in a holistic way. This not only includes a lack of awareness about basic
security practices but also more modern best practices such as scanning for
security vulnerabilities, continuous monitoring, and proper cloud security.

RECENT DEVELOPMENTS IN ERP SUPPLYCHAIN
• Enterprise resource planning (ERP) solutions have matured and expanded their
reach to support most business functions, from back-end processes like
accounting, HR, procurement and manufacturing to front-office functions such as
sales force automation (SFA), marketing automation and ecommerce. Businesses
rely on ERP to not only cut costs by eliminating redundant processes and
automating mundane tasks but also to provide employees access to critical
information to make better decisions, faster.
• As companies increasingly rely on ERP to run their businesses, these systems
continue to evolve to incorporate new technologies and support a broader range
of functions. In this article, we’ll cover eight major trends to keep an eye on in
2021 and beyond.

Key Takeaways
• Businesses continue moving to cloud ERP. The global cloud ERP market is expected
to grow 13.6% annually and reach $40.5 billion by 2025, per Statistics.
• Artificial intelligence (AI), and specifically machine learning, help optimize more
business processes, provide new insights and create personalized customer
interactions.
• ERP is further integrating with other technologies, such as internet of things (IoT)
devices and social media, to automate even more and provide greater visibility and
a better customer experience.
• A solution that can support remote work has become critical as organizations
increasingly rely on distributed workforces in the wake of the coronavirus.

RECENT DEVELOPMENTS
1. Cloud ERP
• Historically, many organizations used on-premises ERP applications and were
reluctant to entrust core business applications to the cloud, but that’s changing
rapidly. Businesses are adopting cloud ERP to take advantage of a simpler
deployment, lower costs, elasticity (i.e., the ability to only use the necessary
resources at any given time), new functionality, less need for internal IT resources,
and the ability to easily add users and functions to accommodate business growth.
• The pandemic has further illuminated the value of cloud ERP and accelerated the
shift from on-premises software, partly because cloud-based applications allow
employees to get their work done from anywhere with an internet connection—
they don’t need to be in an office. Some CFOs looking to cut costs amid the
economic uncertainty are actually increasing investment in cloud ERP to drive
savings and better support their remote workforce. A 2020 survey of finance
executives indicated that 20% expect to spend more on cloud ERP technologies.
2. Two-Tier ERP
• Historically, many companies tried to deploy a single ERP system for both the
headquarters and all regional offices and subsidiaries. But in practice, that
approach was often costly and extremely challenging to implement; subsidiaries
often had specialized requirements, didn’t need the full functionality of the
corporate system and struggled with the one-size-fits-all approach.

3. Digital Transformation
• Digital transformation refers to integrating digital technology into all business
functions to improve daily operations. This approach can often boost revenue and
competitiveness while increasing employee productivity and improving customer
service and communication.
• Since an ERP suite typically touches most areas of a company, it’s a logical place to
start to facilitate this transformation. Indeed, Accenture’s 2020 ERP Trends report
found that three-quarters of U.K. businesses are using cloud ERP as a gateway to
modernization. Several of the trends highlighted below—including the integration
of ERP with IoT devices and the adoption of AI and advanced analytics—can be
considered part of this digital transformation.
4. Other Technology Integrated With ERP
• While modern ERP is a main element in a company’s digital transformation, it is
only part of a bigger investment in technology. Companies are integrating their
business applications with other new technologies, including IoT, to improve core
processes. For example, retailers use warehouse management systems that collect
data from mobile scanners and smart conveyers to track the movement of goods
within the warehouse. Some companies integrate ERP with ecommerce to improve
online order workflows, automatically triggering order fulfillment, updating
inventory levels and recording payment.

5. Personalization
• Historically, ERP platforms with complex scripting languages were difficult to
customize to the specialized needs of each business. But organizations can now
take advantage of cloud ERP platforms designed for easier configuration, or what
analysts call “low-code” platforms. There’s also a growing range of ERP solutions
tailored to the needs of specific industries.
• As companies focus on delivering more personalized, relevant experiences to
customers, they need ERP systems that can accommodate those needs with
features like highly customizable dashboards. One emerging trend is the growing
popularity of AI-based assistive and conversational user interfaces such as
chatbots, which can interpret user voice or text input and respond to questions
using customer and order information stored within the ERP.
6. AI-Powered Insights and Improvements
• Artificial intelligence and machine learning capabilities embedded into ERP
systems work behind the scenes to help meet increased demand for
personalization and improve a broad range of business processes. While
companies could add AI functionality to some ERP systems in the past, more
vendors now offer ERP software with these capabilities built in.

7. Predictive Analytics
• The hunger for AI-infused ERP highlights organizations’ increasing desire to mine
their operational and customer data for new and relevant insights that will
increase the top and bottom lines.
• While it’s always been possible to analyze ERP data to reveal what happened in a
business’s past, a focus in 2021 and beyond is using predictive analytics to uncover
and address what is likely to happen in the future. For example, software with
machine learning capabilities can comb through a maintenance company’s data
about machine repairs to predict when breakdowns are likely to occur. The
organization can optimize maintenance schedules so it services or replaces parts
right before they cause problems.
8. Mobile ERP
• ERP providers have offered mobile support for some time, and mobile apps are
becoming the norm. ERP solutions are evolving to provide on-the-go access to
critical business data, allowing employees to conduct both back-end and front-end
tasks no matter where they are, from the warehouse floor to a retail checkout
terminal to an airport. Mobile ERP can also encourage collaboration for dispersed
workforces in different time zones.
• Mobile ERP apps designed with a user-friendly interface can help users get work
done when they’re not in front of a computer. Employees can complete tasks like
expense reporting, call logging and time tracking, and they can view the status of
critical workflows or approvals from their phones.

FUTURE AND GROWTH OF ERP IN SUPPLYCHAIN
1. A growing realization that ERP systems and associated technologies cut costs
• When the Supply Chain Management Review published its 2019 Warehouse and
Distribution Centre (DC) Operations Survey, labour 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 home grown 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.
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.
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 block chain with ERP software
• Even though many people know about block chain technology because of crypto
currency, its already proved useful in the supply chain sector. For example, block
chain 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 block chain 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 block chain’s potential.

ROLE OF ERP IN INTERNATIONAL BUSINESS
• International businesses, especially manufacturers, need an enterprise resource
planning system for the same reasons businesses based in one location do: It's a
means to integrate key business processes into one system for better management
and more efficient operations both now and in the future. The difference is that an
international manufacturing company will need a good ERP system to not only
handle the operation of one location, but many -- all with different requirements
and local needs.

Here are four reasons why global companies must invest in a high-quality ERP system
1. Centralize local and global manufacturing data and workflows into one centralized
ERP system
• A good ERP system will give you the ability to drill down into highly specific local
data for one of your locations while still making it easy to access company data in
aggregate. Your system should make it just as easy to see what's going on with one
individual business unit as it is to get the big picture status of your whole company.
An ERP provides you with this essential capability to zoom in and see the local
picture and then zoom out to see how that local picture impacts on the big picture
across your global organization.
• For example, if a U.S.-based customer places an order, and you have a
manufacturing or fabrication facility in China, your production team needs to be
able to get the data from the purchasing order - design requirements, capacity
needed, shipping info, etc. - as quickly and accurately as possible to start
manufacturing.

2. Effectively manage costs in a complex manufacturing supply chain with ERP
Systems
• One of the more underrated aspects of ERP systems is the visibility you gain into
your financials. Just as a global company needs to be able to easily pull supply
chain data for individual units and get a consolidated view of companywide
information, it's also extremely important to get a clear picture of the financial
implications of every decision as you’re making it.
• Often, the businesses that struggle to maintain profitability are the same ones that
don't really know what their costs are. They simply can’t pull up the hood and get
visibility into how the engine and its components are performing in real-time, and
this can’t make any necessary adjustments to drive efficiency and profitability. It's
difficult, if not impossible, to find ways to improve efficiency and reduce expenses
if you don't know what the problem is or even where to begin. Visibility matters a
lot.
• To that end, a good ERP system for manufacturers will let you see data, including
cost of materials, cost of finished goods and cost of goods sold, alongside your
payables and receivables. By understanding the financial performance of your
individual business units, as well as your entire global operation as a whole, you
will be in a much better position to make sound decisions for improving your
company and driving it forward into the future.

3. Break down language, currency and cultural barriers
• A global company will have to contend with handling business in different
currencies and exchange rates. An ERP system can be a powerful facilitator for
translating currencies across national borders, while still allowing users to see
financial data presented in their local currencies.
• For example, a regional manager in China will want to see his or her finances
presented in RMB when analyzing that particular unit. But if someone in the U.S.
or European corporate office needs to access that data, they can easily convert
financial data displayed as RMB into dollars or Euros. Nothing is lost in translation.
4. Foster adaptability and growth
• Perhaps most importantly, businesses with a global presence, or those that aspire
to be one, need a system that will grow with them. Many businesses enter a
period of impressive growth only to find out that their ERP systems aren't
designed to handle such a complex global operation. Thus, their inflexible ERP
system becomes a growth inhibitor and its limitations must be addressed before
growth can ensue (either by scrapping the inflexible system or finding an upgrade
or work-around).

ERP FOR LOGISTICS AND SUPPLY CHAIN MANAGEMENT

ERP FOR LOGISTICS AND SUPPLY CHAIN MANAGEMENT

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