How can eCommerce ERP improvements help supply chain management?

As eCommerce business grows, supply chain management gets more challenging and demanding – but eCommerce ERP development can help

According to the 2022 Supply Chain Challenges and Priorities Report by APQC, 46% of enterprises have missed their 2021 business goals, and 70% have become less competitive due to supply chain issues.

At Itransition, we believe that developing and adopting robust eCommerce ERP enterprises may overcome most of their supply chain challenges and thus become more competitive. This article covers the main benefits of eCommerce ERPs for supply chain management and provides three tips on where it is better to start when developing such a solution.

How can eCommerce ERP benefit your supply chain?

Typically, ERP implementation enables an organization to transform its entire enterprise resource management cycle, from manufacturing and finance to HR and logistics. For example, an eCommerce ERP may provide the following business benefits regarding supply chain management.

Improved productivity and performance

Ecommerce ERP adoption helps organizations automate most of their routine supply chain management tasks, resulting in significant productivity increases.

Assume that a consumer orders some product via an organization’s website. If integrated with an ERP, the website may notify back-office employees about order and shipping details or even automatically suggest the optimal delivery route based on customer location. In parallel, the ERP may also automatically generate an invoice and send it to the customer.

In addition, if the inventory data indicates that the ordered product is running low, the ERP may also send a purchase order to a supplier. Alternatively, if the eCommerce organization has its own manufacturing, the ERP may generate a production schedule, thus helping replenish the stock promptly.

Increased transparency and visibility

The benefits of digitalization and automation of supply chain workflows are not only limited to increased productivity. In addition, eCommerce ERP adoption allows logistics managers to get a complete overview of their supply chains, enabling more intelligent and future-proof business decisions.

For instance, ERP developers may have built-in data visualization tools and dashboards to help supply chain managers quickly identify and fix any problems and bottlenecks, whether it’s order fulfilment issues or inventory shortages. Thus, an ERP may enable an enterprise to improve its operational processes, optimize performance, and improve service quality and customer satisfaction.

Advanced reporting and analytics

Organizations may predict customer demand and behavior by developing an ERP with an in-built analytics module and empowering it with AI technology. Thus, they can replenish supplies or increase manufacturing capacities in advance, ensuring demand satisfaction.

Alternatively, organizations may implement intelligent analytics to analyze traffic, weather, and historical shipping data and thus enable real-time route optimization. In addition, equipped with machine learning technology, the system will learn to perform this and other tasks better over time.

Enhanced scalability and flexibility

An eCommerce ERP works as a unified data and technology hub. It allows organizations to support the growth of their supply chains by adding new tools and computing resources when needed. For example, an ERP based on the microservices architecture can enhance the company’s software solution with new features and capabilities by adding new services and connecting them via APIs. In parallel, an enterprise may deploy its ERP in the cloud to scale computing powers on-demand and avoid the need to maintain physical servers.

How is it better to start with eCommerce ERP adoption?

Now, after considering the main benefits of eCommerce ERP for supply chain management, it is worth discussing how to approach the development of the system.

Defining development goals and requirements

Without a clear understanding of ERP project goals and requirements, an enterprise may develop an unviable and impractical solution that cannot meet the existing supply chain challenges, thus spending time and money in vain. To avoid this situation and increase the chances of project success, we recommend that decision-makers initiate the business analysis.

To begin with, they may run meetings with corporate logistics managers and IT specialists to discuss the following questions:
• What are our main pain points in terms of supply chain management? Can eCommerce ERP development help solve them?
• Should we develop an ERP system from scratch, or is it better to initiate platform-based development?
• What KPIs should we track to evaluate the success of the project?
• Do we have enough resources and competencies to implement an ERP ourselves? Should we engage third-party ERP experts or not?

The answers to these and other questions will help get at least a basic understanding of organizational project goals and requirements. Later an organization may use this information to create a project plan or quickly communicate its idea to a software development contractor.

Determining the minimum feature set

Considering that ERP development is an expensive and complex procedure, we recommend that eCommerce enterprises not pursue quantity and develop only the minimum possible feature set. Later the developers can gradually expand its functionality when they already have an established and working ERP solution.

To identify the features that an organization may require in the first place, we would recommend mapping all logistics workflows, data sources, and interrelations between them. This way, an enterprise may identify the features with the utmost business value.

Consulting with ERP experts

If the viability and feasibility of eCommerce ERP development remain unclear, we recommend decision makers consider asking for advice from third-party experts. Professional ERP consultants may help run business analyses and validate the project idea. They can also undertake other ERP development aspects, such as coding, testing, implementation, and customization.

Final thoughts

As supply chains become more global and interconnected, eCommerce enterprises may require new tools to handle these complexities, and this is where eCommerce ERPs may come in handy. These solutions help automate most supply chain management tasks and provide transparency while enabling more intelligent and data-driven decision-making.
Despite the benefits, the development of an eCommerce ERP itself is not an easy task. However, clearly formulating business goals and requirements, defining the proper feature set, and involving third-party ERP experts may help reduce the development risks and ensure the project’s success.