Enterprise Resource Planning (ERP) and Logistics Activities: Systems and Processes

The increasing competition and changing market conditions in today’s business world compel businesses to operate more efficiently and swiftly. This is precisely where Enterprise Resource Planning (ERP) systems come into play, offering significant advantages, especially in logistics activities.

Enterprise Resource Planning Systems and Their Impact Areas

Enterprise Resource Planning systems aim to influence every aspect of businesses. These systems are typically developed by globally recognized software providers such as SAP-AG, Oracle, J.D. Edwards, Peoplesoft, and Baan.

ERP systems impact the primary operational areas of businesses, including inventory management, supply chain management, sales, and distribution. These systems enable the integration of business processes, record data in a shared database, and transform it into meaningful insights through subsequent analysis.

SAP: Leader in ERP Systems

SAP, in particular, stands out as a prominent software among ERP systems. Established in Germany in 1972, SAP is one of the world’s largest software companies. Headquartered in Walldorf, SAP develops solutions that facilitate efficient data processing and information flow across organizations. SAP software contributes to accelerating workflow, improving operational efficiency, enhancing customer experiences, and increasing business profitability.

Key features of SAP software include centralizing data management, managing business processes from a single perspective, achieving cost savings, and enhancing productivity. Additionally, SAP offers customizable modules for specific functions like material management, sales and distribution, logistics execution, warehouse management, customer services, fleet management, production planning, customer relationship management, and supplier management.

Logistics Processes in ERP Systems

Procurement and Logistics Activities:

Integration between production and logistics is crucial in ERP and supply chain management. ERP software like SAP includes specialized modules for each of the production and logistics activities.

Product Development and Manufacturing:

Involves strategic planning activities such as production planning, material requirements planning, and updates to master data. Encompasses defining production processes, optimizing process flows, and identifying work areas.

Sales and Service:

The sales and distribution module continues from entering customer orders into the system to production planning and storage modules. Core data includes customer, business, and sales information, forming combinations for sales organizations, distribution channels, and sales offices based on this data.

Delivery Process:

The delivery process is an outward process where products are transported from the factory to dealers or customers. Deliveries are created based on order references, and order details are transferred to the delivery.

Shipment Management:

The shipment process involves crucial tasks in terms of financial modules, billing in the sales and distribution module, and significant operations concerning customer complaints and returns in terms of quality management.

Factors like route, type of transportation, and the carrier company affect shipment management.

Handling:

Handling activity provides information on how products to be delivered to customers should be packaged. Documents such as the picking list and loading list are created as a result of handling.

Picking List and Loading List:

The picking list is an output containing information such as which products are on which pallet and their weights. The loading list contains information on which products will be loaded onto which vehicle and transported.

Distribution:

The distribution process involves moving products from the warehouse to reach the customer. ERP systems optimize the distribution process, providing time and cost savings.

Customer Return Processes:

Customer return processes involve steps such as receiving products from customers, managing return processes, and analyzing return reasons.

In conclusion

Enterprise Resource Planning systems enhance business efficiency, reduce costs, and increase customer satisfaction by offering an integrated approach to logistics activities. Leading ERP software like SAP, when effectively utilized, contributes to businesses gaining a competitive advantage, especially in logistics processes.