Logistics plays an important role in the global economy. With time, companies have looked for ways to ship products and goods faster and with more accuracy, and much of this is thanks to the technological advances that the freight forwarding industry has witnessed.
One type of tech that logistics companies should be on the watch-out for is enterprise resource planning software or ERP. The ERP software market is currently worth more than $25 Billion and continues to grow by up to 20% every year. But what is ERP and what does it do?
Enterprise resource planning is the process of integrating all aspects of a business’s operations to allow departments to work seamlessly. It’s mainly a virtual dashboard that gives a business one singular place to enter information, and thus also to get updates and progress reports. In the world of logistics, this solution could mean everything as collaboration and coordination are important keys to success when managing a freight forwarding operation.
Benefits of ERP Software to Freight Forwarding Companies
A tool’s value depends primarily on the benefits it brings to the user. What is the benefit of getting an ERP system for logistics company use? There are quite a lot of benefits, but these three are the most prominent ones:
Save on costs
The costs related to manpower, such as a logistics engineering salary or various management positions, have only gone up with time. Hence, logistics companies have to look for ways to cut costs and remain profitable. Technology like ERP software helps save costs by performing automated features and allowing a company to operate with less manpower.
Moreover, because an ERP tool can do so many things, it eliminates the need to get multiple softwares to plan and manage tactical operations. This software also provides analysis and data that could help logistics teams find more efficient ways to carry out tasks and thus save time and effort in the process too.
Streamline operations
ERP software can help streamline processes by providing one database of information, such as policies, standard operating procedures, usage reports, and many other pieces of data that can help a company stay optimized. Tools like enterprise resource planning tools give operations teams a robust system to track day-to-day operations and get real-time updates so that they see what’s going on on the ground and find ways to improve certain processes that could need a revamp.
Integrate departments seamlessly
Not many companies will admit to having a clear and seamless process to coordinate at an inter-department level. Enterprise resource planning allows that by giving the company one central place where operations, marketing, fulfillment, HR, finance, and practically all other departments can collaborate on. Being able to update one another and communicate more efficiently on one platform streamlines operations and removes bottlenecks that could be causing delays and issues.
Ways ERP Can Help Logistics Companies
Now that we know what kind of benefits ERP software brings to freight forwarding companies, let’s look at certain use-case scenarios that could help them achieve these benefits and how to maximize the software’s features.
Automate tasks and procedures.
One quite major role of ERP in logistics management is to automate systems, tasks, and procedures in a dashboard. Here are some examples of tasks that these systems can apply various automations in supply chain management such as:
- Label printing
- Identifying orders that are ready for fulfillment
- Publishing tracking numbers on portals and e-commerce solutions
- Proof of delivery sending
- Sending tracking numbers to clients
- Sales and logistics reporting
- Proof of delivery and receipt sending
Many other ERP solutions provide many other automation solutions that could save time, resources, and energy for the company and the logistics team.
Access communication features
Achieving supply chain success requires that departments and manpower communicate non-stop. Communication leads to better collaboration and allows a company to pivot and address concerns faster.
An enterprise resource planning software gives staff one place to leave and receive updates. Orders and shipment dashboards have a well-laid-out dashboard for all comments, updates, requests, or concerns for anyone in customer service, fulfillment, data science, marketing, or finance to check. With one unified platform for updates, teams can stay informed on all movements while also informing others of their activities.
Maintain an up-to-date client database
Client relationship management relies heavily on the ability to use data analytics. In freight forwarding, client databases provide companies with a deep record of all customer transactions that could make logistics much easier. Delivery staff could use a client database to keep a record of directions to a customer’s address and leave notes that could help them go the extra mile and learn more about repeat clients. Marketing teams can also use this database to blast out updates and offers to certain segments and help drive more sales in the process.
Manage logistics schedules
Time is of great essence in logistics, and using cloud-based freight forwarding software could help manage schedules better. ERP software dashboards provide real-time updates and data on package destinations and arrivals, giving companies a better idea of these schedules.
ERP software could also help in scheduling out pick-ups and deliveries more efficiently by allowing fulfillment teams to batch tasks according to sender, location, parcel size, or any other factor that could simplify logistics and save time and energy.
Streamline manpower management
Other important freight forwarding software features have to do with human resource management. Using ERP software, logistics companies can perform a slew of manpower-related tasks including:
- Staff scheduling
- Payroll management and computing
- Employee onboarding and policy management.
- Employee database management
- Employee performance and analytics tracking
- Workflows and organizational charts
In most cases, companies no longer have to use HR management solutions because an ERP can already perform all the necessary tasks, helping them save costs on having multiple softwares for the same function. Running HR department database management on a system that integrates with other departments also helps streamline collaboration and reporting and allows managers to keep better track of schedules, employee grievances, salaries, and so on.
Organize finance and tax compliance
Using web-based freight forwarding software like ERP tools can also help organize various finance and tax-related information such as sales, expenses, net income, payroll expenses, deadweight loss and so on. ERP software can automatically generate financial reports for internal use and even be used to declare income and expense statements for tax compliance purposes.
An ERP tool also provides a way to track accounts receivable and payable, especially for large business-to-business accounts. In a nutshell, the tool can help bring together all financial information to ensure budget allocation and logging stays optimal.
Cloud-based versus On-site
The rise of cloud-based technologies has allowed companies to operate at a remote level. 62.7% of organizations prefer cloud-based systems over on-premise ones because there are lesser proximity-based limits. Now, staff can work remotely because cloud-based systems provide them access wherever they may be.
But that isn’t to say that on-site ERP systems should be phased out. There are still specific scenarios that an on-site system will be preferable and more advantageous. It’s best to find out what works best for your company’s context and adopt the solution that works best for you. Remember that in technology, there is never a one-size-fits-all solution.
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