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You’ve probably heard the term ERP, SAP, or even SAP ERP, but what does each mean? Learn about the benefits and applications of these software solutions and how they apply to supply chain management.

What Is ERP?

Short for enterprise resource planning, ERP is the integrated management of all essential business processes, from inventory and order management to customer relation management. Integrating these business processes into one holistic system allows ERP to streamline information and processes throughout all subsets of an organization.

Employees across different divisions can also expect consistent information, as they share one central ERP database, as well as synchronized reporting and automation.

What Is SAP ERP?

Various ERP software providers exist, but the market leader is SAP (short for systems, applications, and products in data processing). SAP’s ERP software, often referred to as SAP ERP, consists of numerous modules that help companies gather, store, maintain, and interpret data from functional areas such as:

  • Financial accounting
  • Sales and distribution
  • Business intelligence
  • Manufacturing and material management
  • Logistics and warehouse management
  • Supply chain management

[Related: The Different Types of Supply Chain Management Methods and Theories]

Benefits of SAP ERP

When organizations implement SAP ERP and integrate their business processes, they can expect to enjoy the following benefits:

  • Save money and time.
  • Get instant access to real-time information.
  • Make smarter and faster decisions based on data from the software’s reporting tools.
  • Share information across all business units and eliminate data inconsistency with a single data source.
  • Track all transitions across the organization from start to finish.

SAP Supply Chain Management: How SAP ERP Benefits 3PLs

Specific business suites are available to complement SAP ERP and further meet customer requirements, including:

  • SAP PLM – SAP Product Life Cycle Management
  • SAP APO – SAP Advanced Planning and Optimization
  • SAP SCM – SAP Supply Chain Management

While the standard SAP ERP software alone is a game changer for supply chain management, third-party logistics providers (3PLs) benefit even more greatly from the SAP Supply Chain Management application, which allows them to respond efficiently and cost-effectively to changes in market conditions, supply, and demand. Specifically, the supply chain management application helps with integrated business planning.

[Related: What Elements Make a Successful Supply Chain?]

Integrated Business Planning

Demand planning becomes simpler when organizations and their 3PLs take advantage of SAP Supply Chain Management’s Integrated Business Planning software, as they have streamlined processes and visibility into tactical, strategic, operational, and external data. This software benefits 3PLs with:

  • Inventory optimization: Increase profitability while still being prepared for unexpected spikes in demand with strategic inventory targets.
  • Demand-driven replenishment: Utilize demand-driven material requirements planning (MRP) techniques to improve material flow and reduce supply chain variability.
  • Response and supply planning: Drive supply management optimization with plans based on production capacity and other constraints, allocations, and prioritized demands.
  • Sales and operations planning (S&OP): Balance profitability, service levels, and inventory using a company-wide sales and operations plan.
  • Demand forecasting and management: Carry out strategic short-, mid-, and long-term demand forecasting using machine learning algorithms, statistical modeling, and demand sensing.

[Related: Demand Forecasting: How to Forecast Your Supply Chain]

SAP ERP Integrations

SAP ERP can do a lot for organizations — but it can’t do everything. Other third-party applications will still be necessary to handle what SAP ERP wasn’t designed to accomplish.

Integrating your SAP ERP software with these other business systems is essential in order to get the full value out of both software investments. However, SAP software is quite complex, so integrating it with other systems can be challenging.

Creating an effective strategy for SAP integration requires a strong understanding of the integration options that are available with your SAP product and version (on-premise, cloud, or hybrid). From there, you can choose the integration tools and paths that are most appropriate.

[Related: How to Find the Right 3PL Partner — Fulfillment Questionnaire]

Hollingsworth’s SAP Implementation

Hollingsworth has been using SAP ERP technology to manage every aspect of the supply chain process since 2003.

Over the years, we’ve upgraded and adapted our SAP implementation to provide our clients with unmatched insight and visibility into daily operations and rapid solution deployment.

Our SAP ERP capabilities include:

  • Sales and order management
  • Customer service
  • Warehouse management
  • Logistics execution and delivery processing
  • Transportation management
  • Production planning
  • Manufacturing execution
  • Inventory management and control
  • Procurement and purchasing
  • Material requirements planning
  • Quality management
  • Information systems reporting

We also utilize high-performance industrial radio frequency-enabled computers to monitor all aspects of the supply chain network in real time, and radio frequency identification (RFID) technology to improve operation accuracy by eliminating duplicate and manual operator errors, barcode scans, and data entries. Plus, we maintain an in-house team dedicated to assisting clients with seamless business systems integrations.

For more information about Hollingsworth’s SAP ERP implementation, visit our website or contact us.

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