An ERP system works in such a way that it gets data from several sources and integrates it in a unified system that will work in a large organization. Take for an example Supply Chain Management. Supply Chain Management is a system that encompasses different functions such as planning of materials (otherwise known as material forecasting), work-in-process inventory, returns authorization, finished goods to name a few.
Others call SCM as Logistics, while the others consider is as exactly the same or interchangeable. Supply Chain Management addresses the following issues such as Distribution Network Configuration which includes the names and locations of suppliers, plants or warehouses, distribution channels, customers. Another factor is the strategy of distribution which includes transportation or freight (air, sea, ground, LTL, TL, parcel, etc). This is usually determined according to customer’s needs. For any logistics, planning of materials is an important factor. Forecasting crucial as to whether the company can deliver whenever there is an order. Unexpected matters like large or urgent orders must be anticipated. With an ERP system that can synchronize most of the problems addressed above, it is more efficient and cost effective for the company.
Lets take a look at an example of a Battery Supply Chain for Company B. Company provides battery replacement for different companies that have battery cabinets. A customer will send an email requesting for a quotation. A battery specialist can do this in an ERP system that is used by Company B to check battery supply, cost, freight and disposal with just a few clicks of buttons.
To summarize, a good ERP database in Supply Chain Management is very useful and efficient in a large or even small operations.