ERP System Logistics - The Master Tool for Efficient Logistics Processes and More

If there’s a system capable of optimizing all your processes, it's ERP software. Especially in warehouse and logistics processes, it can solve many problems and create more precise operations. But what lies behind this and what specific benefits does ERP offer for your logistics? Let's take a closer look.

What does ERP mean?

ERP stands for Enterprise Resource Planning, which translates to the entrepreneurial planning of operational resources. Planning is done through a comprehensive software solution that maps, controls, and manages your processes.

An ERP system integrates different functions and departments of your company, such as finance, human resources, purchasing, sales, warehousing, and production. Through the central database and unified platform, ERP enables smooth information flow between the various areas and improves the transparency, efficiency, and productivity of your company.

ERP system, Source: own illustration

What is the purpose of an ERP system in logistics?

An ERP system also plays a crucial role in logistics and can be considered indispensable depending on the size of the company. It primarily serves to efficiently plan, control, and manage the various logistical processes within the company.

Here are some of the main functions of an ERP system in logistics:

• Inventory management
• Procurement management
• Order management
• Supply chain management
• Transportation management
• Reporting and analysis

What are the benefits of an ERP system in logistics?

The main advantage of an ERP system in warehouse logistics lies in the optimisation of processes. As a result, you can reduce the company's costs, increase customer satisfaction, and remain competitive.

In addition, the ERP system monitors the inventory. If your bestsellers are running low, an automatic reorder is triggered. If delivery times are longer, the ERP system reacts accordingly to ensure that you can deliver at any time without having costly overstocks.

If you are running an e-commerce shop, you need an efficient ordering process. The ERP system helps you to capture orders and initiate the logistics process so that the order can be picked from the warehouse and dispatched immediately.

Resource planning, dispatch, and transport also need to be planned efficiently. The software takes care of these tasks and helps you set routes and deploy vehicles, employees, and external transport service providers to ensure optimal, cost-effective utilization.

By using a logistic ERP system, the exchange of information and data occurs in real time. This means that the entire supply chain can keep track of order status and deadlines and can respond to any deviations. The system thus significantly contributes to collaboration with external service providers by enabling transparency, communication, and seamless collaboration.

Which business processes can be carried out with an ERP system in logistics?

Manual processes are time-consuming, error-prone, and outdated. The introduction of an ERP system can automate and improve these processes. Looking again at the main functions, it's easy to identify the process improvements:

Stock and warehouse management

Logistics ERP can monitor and track the entire warehouse stock. It manages incoming and outgoing goods, warehouse space management, stock control, and optimizes warehouse processes.

Procurement management

The ERP system supports the procurement process by determining the need for raw materials, components, and materials, placing orders with suppliers, tracking goods receipt, and managing invoice processing.

Order management and processing

The entire order processing process is organized and improved, including the capture of customer orders, checking product availability, processing orders, creating delivery notes and invoices, and tracking order status.

Supplier management

The ERP system manages all information about suppliers, including contact details, contract terms, delivery performance, and payment terms. It can also help you manage relationships with suppliers and optimize supplier selection.

Shipping and transport management

The business software organizes the shipping process, including planning, monitoring, and managing transport. It enables route optimization, shipment tracking, freight handling, and management of transport documents.

Tracking and traceability

Warehouse logistics ERP can ensure product traceability along the supply chain. It keeps track of batch information, serial numbers, expiry dates, and other relevant data to ensure quality assurance and compliance with legal regulations.

Reporting and analysis

The software captures and analyzes data on logistic processes to generate reports and analyses. This allows your company to monitor performance indicators, identify bottlenecks, make efficiency improvements, and make informed decisions.

Logistics processes, Source: startupwissen.biz

What should be considered when implementing an ERP system in logistics?

If you're currently deciding to implement a ERP system for your logistics processes, you should proceed as follows:

1. Requirement analysis and requirement catalogue:

Perform a thorough analysis of the specific requirements of your company and your logistics department. Understand the existing processes, problems, bottlenecks, and objectives, to define which requirements the ERP system must fulfil for your logistics department.

2. Selection of the right ERP system:

There are different ERP systems available on the market with different functionality, scalability, and adaptability. Choose a system that is specifically tailored to the requirements of the logistics industry and offers the necessary functions and modules.

3. Integration with existing systems:

Check which systems need to communicate with the ERP tool. Make sure that inventory management systems, warehouse management systems, or transport management systems have suitable interfaces to ensure data consistency and smooth information flow.

4. Training and change management:

Training for the employees is critical to ensure the system is used effectively. Also develop change management strategies to ensure employees' acceptance and cooperation. Clear communication about the system's benefits and associated changes is also important.

5. Data migration:
Make sure that the migration of data from existing systems to the new ERP system is smooth and retains data integrity and quality. Consider both historical data and ongoing transactions.

6. Customization and configuration:
Warehouse logistic ERP should be flexible enough to adapt to specific and changing needs of the logistics and the organization. Check and configure the processes regularly. Reports, dashboards, and other system settings should be user-friendly and customizable.

7. Continuous monitoring and optimization:

Monitor the system continuously to identify problems and make improvements. Ensure that the system meets changing requirements and business processes. This also applies to aspects such as security and data protection.

What are the costs of ERP introduction?

The costs of an ERP introduction can vary greatly and depend on several factors, such as the size of your company, the complexity of the ERP system, desired functionalities, customization to the specific needs of the company, and the chosen implementation method.

Costs also arise from data migration, consulting, training, and subsequent maintenance. So you're not just acquiring a software license, but contributing to the restructuring of your company. Therefore, establish a realistic budget and seek advice. With successful implementation, you can significantly improve operational efficiency and thus save time and resources.

Which ERP system logistics tools are suitable?

The following systems are available as for your logistics ERP system:

Billbee

microtech büro+

DreamRobot

weclapp

SAP S/4HANA Cloud, public edition

Sage 100

Xentral ERP

JTL

SAP Business One

Microsoft Dynamics 365 Business Central

On OMR Reviews you’ll find extensive information about each ERP software, including manufacturer data, price and cost details, a summary of the main features, user reviews, and suitable alternatives.

The ERP-Briefing also gives you an overview of different systems. In addition to ERP systems, the focus is also on ERP-related tools that specifically support digital commerce and show typical business transactions in this area.

Conclusion: Give your logistics the necessary upgrade

The warehousing and logistics industry has undergone remarkable development due to e-commerce and mail order business. Therefore, it's even more important to ensure agile and efficient logistics processes to meet the demands of this demanding industry. An ERP system provides the necessary foundation to support you in your dynamic environment. It not only gives the entire logistics a new impetus, but also increases productivity and lays the foundation for a successful future.