What is ERP?

 

Enterprise Resource Planning (ERP) is a set of integrated technologies for linking all aspects of a business. It brings together all the disparate elements of an organisation under one single business management solution. While traditionally organisations have had separate systems for each of their key areas, ERP systems incorporate every area.

When you consider the core processes of a typical business, it’s easy to see what the benefits of this may be. For instance, the resources used by Finance, Farming and Production, Sales and Purchasing, Operations and Warehousing departments are likely to overlap but using an ERP system makes sharing a single source of this information easier and more streamlined.

However, ERP provides a far more comprehensive set of benefits than just the sharing of resources. Rather, it should be considered a powerful way of using technology to improve efficiency and productivity. ERP software brings together ‘islands’ of data into one central database which forms the foundation of the system; this allows organisations to streamline their processes and make progress quicker.

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One common experience

ERP software implements a standard experience across an entire company. In practice, this takes shape in a few ways.

With ERP, a single interface means there is one common look and feel to all the applications used company-wide which improves the efficiency of interactions between different departments. Additionally, every part of the organisation is working from one core database which means there is only one version of the truth and data can be shared and acted upon, in real time. This stops duplication of resources and provides consistency and transparency across the business.

Better insights

ERP software is designed to improve data flows, with a centralised database making analysis as up-to-date and accessible as possible. Information can be fed in from every area of the organisation, which helps create comprehensive reports on performance.

Systems are designed with the presentation of data in mind. Modern companies are capable of collecting copious amounts of information. If this data isn’t organised, it can be a huge burden. Bringing this information onto one platform can be very beneficial for gaining business insights, and aiding informed management decision making.

Managing regulatory compliance

All organisations are bound by red tape. Making sure all activities are compliant with the ever-growing list of rules can be a laborious process which only increases the workload of those responsible and eats away at their time.

ERP software is capable of reducing these pressures on organisations and their staff. The central database stores all the information needed to meet directives and connects the compliance process across all departments. Naturally, this makes the reporting of compliance information and auditing a far easier task. This is because ERP systems hold all historical data in one place and provide the tools to interrogate and present the data clearly and quickly.

ERP systems also allow for better traceability. The challenge of accounting for the provenance of products in supply chains is coming under greater levels of scrutiny. ERP can make the process more effective and more transparent. Furthermore, technology such as Blockchain is becoming increasingly prevalent and important for traceability. This is particularly pertinent for the fresh produce market, where LINKFRESH operate. Blockchain acts as an immutable ledger for everything in a supply chain, and its presence in ERP systems will only grow in importance.

ERP in the Fresh Produce sector

The usefulness of ERP is especially apparent in the fresh produce sector. This is largely because of technology advancements in the industry and the need for producers to keep pace with them. New stock-tracking or pH-measuring technology is likely to have little benefit if there is no organised system to manage the data they collect and create. Using one database to measure outcomes makes the transition far more straightforward.

The management of resources is arguably the most important factor in the success of a fresh produce business. A supply chain needs to be as efficient as possible to avoid wastage and lost revenue. As demand continues to rocket, fresh produce companies are under pressure to provide more than ever. Streamlining processes is vital to achieving this and more and more businesses are turning to ERP software for the solution.

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The progression of ERP

ERP software has superseded the services of traditional Material Requirements Planning (MRP) systems by offering significantly superior levels of integration, insight and efficiency. MRP systems proved useful for managing production and other operational processes but, beyond this, they only fulfilled a limited number of functions - often financial in nature.

ERP has been built on the advances of MRP systems, allowing businesses to take a more holistic view of their operations. The greatest advancements have been made in automation.

Modern ERP software is far less restricted to manufacturing processes than MRP. Supply chain management in particular has been a big beneficiary of this. Meanwhile, ERP has potential uses for most larger, multi-departmental companies regardless of industry. ERP systems also aren’t as geared towards only performing “back-office” tasks with marketing, sales and customer service tasks, to name a few, now also well served by the technology.

The majority of ERP systems are still “on premises” - in other words, the software is completely housed on the company's hardware. However, the advancement of technology means the uptake of cloud-based ERP software has seen a marked increase.

The “Evergreen” nature of Cloud-based ERP holds certain advantages over its locally-installed counterpart. Legacy ERP systems have the disadvantage of needing to be replaced every few years. Meanwhile, the need for maintenance is expensive and inconvenient.

Companies paying for the cloud-based software do not encounter these problems as they are dealt with by the provider. Cloud ERP is usually more affordable than traditional ERP because of the lack of these upfront expenses. It also allows users remote access to the system across different devices, from any location, and has standardised functionality for ease of upgrade. Many companies opt for a “hybrid” system. This is a combination of on premises and cloud-based ERP software which takes the advantages of both.

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