There was a time when supply chain software was tightly focused on managing the transactions that went into processing orders. The software providers were specialized in EDI transactions - data files formatted according to the Electronic Data Interchange (EDI) standard. EDI files associated with logistics have become integral to the process. These electronic documents were originally separate from inventory control, shipping manifests, and payment processing, but the volume of transactions and the number of companies doing business electronically has made integration between supply chain logistics and ERP systems more common than ever.
It’s a natural progression for ERP providers to integrate with supply chain systems because processing orders and handling their logistics is both a product of ERP functions and the results become part of ERP. Gartner reports that supply chain management software revenue grew nearly 14 percent in 2017 underscoring the importance of the category.
When supply chain software was a more independent segment of the software market this growth was important in itself, but a quick review of the companies represented in Gartner’s analysis shows that companies including SAP, Oracle, JDA, and other ERP software companies are now included in the supply chain software category.
Moving the goods and the data
Integrating logistics management with ERP functions is emerging as a necessity as data resulting from those operations grows and becomes more important as analytical fodder. The combination of financial data across all business operations is helping guide supply chain decisions and inform logistics management as the landscape becomes more complex and time frames shorten.
This mix of concerns needs wide ranging data sets and even with advanced analytics will cause logistics managers to push the limits of their understanding and management capabilities. They include -
- Visibility from end to end of the process
- Regulatory compliance across multiple governmental domains
- Sustainability concerns
- Multi-channel sourcing and multi-channel sales/delivery
- Near shoring labor and transport cost changes
- Changes in globalization
- Increasing reliance on technology like IoT
Each of these areas has its own variables and affect logistics in different ways. It’s hard to imagine supply chain and logistics managers would be able to effectively deal with these issues with the limited scope of information that makes up the traditional view of supply chain data. Just like full end-to-end visibility of the supply chain enables companies to better manage the delivery of their goods, effective logistics management needs end-to-end visibility of the data that drives the company as a whole. And that data is available through the company’s ERP when supply chain logistics is integrated.