Benefits of ERP for Logistics and Distribution Industries

By Lexi Wood • Updated on June 1st, 2021
LinkedIn

Logistics forms a vital part of any company regularly dealing with the multi-echelon, global supply chain. The right logistics system can manage transportation operations, track vehicle maintenance, determine optimized routes and maps for shipping, and organize warehouse workflows.

Enterprise resource planning (ERP) is one valuable tool for better managing your logistics when dealing with wholesale or distribution trades. This integrated suite of business applications automates day-to-day operations such as accounting, human resources (HR), and customer relationship management (CRM). Yet it can also improve your company’s logistics through inventory and supply chain management.

ERP software can improve logistics in several areas, including:

While some ERP options for logistics are developed and branded exclusively for companies under the logistics software term, other options may include industry-neutral ERP solutions which can provide all the tools a logistic company needs. It’s important to determine if the software you’re looking into only focuses on inventory and/or supply chain management, or has the additional modules to streamline all your business processes.

How ERP Improves Logistics

ERP software provides a single, cohesive overview of all your different business activities. This oversight allows better logistics management by covering:

Inventory and Warehouse Management

First, ERP software helps you gain control of your existing inventory with real-time tracking and management tools. The inventory management modules track all information about the items that your company builds, buys, stores or sells. This can simplify pricing products by allowing you to make adjustments based on real-time sales trends or changes to manufacturing costs.

Another important element of logistics is warehouse management (WMS). ERP systems make it easier to manage a warehouse with efficient stock control and pick/pack improvements by optimizing order management, automating purchase orders for needed goods, and tracking deliveries as they leave your facility.

Inventory systems with traceability tools can use bar-coding, serial numbers, lot numbers, or advanced RFID tracking to locate and identify different items throughout the warehouse so you can maintain the most effective stock levels possible.

Supply Chain Management

Next, manage the movement of your inventory along the multi-echelon supply chain by utilizing an ERP. Supply chain management modules make it possible to plan, control, and execute the necessary processes to assist the manufacturing and distribution of finished goods. You may find it’s more economical to keep certain products in storage at a warehouse than send them ahead to distributors. Or you might consider working with a third-party logistics company to streamline localized deliveries.

Transportation and Shipping

Transporting your products is one of the most important steps in getting your goods to paying customers. ERP systems with transportation modules plan, execute, and optimize the physical movement of goods from the manufacturer to the final destination, whether it’s a storage warehouse or directly into the customer’s hands.

Some basic advantages of using an ERP with transportation and shipping features is the ability to better plan and optimize delivery routes. For example, you may discover a faster method for transporting merchandise which can save you both time and money, yielding a higher ROI over time.

These ERP tools can also extend to basic fleet management, which works on maintaining the vehicles in your fleet, from initial procurement to final disposal. Use preventive maintenance to schedule vehicle downtime before breakdowns occur, or just ensure your entire fleet is in peak operating condition to cut down on costly wear and tear.

Financial Reporting

Finance reports can provide greater visibility into your logistics operations. ERP accounting tools track revenues and expenses in a general ledger in order to balance accounts payable (AP) with accounts receivable (AR). Automated reports custom slice and dice data based on region, location, profit center, employee, or other key performance indicators (KPI) you choose. This additional data allows decision makers along the supply chain to make more nuanced and accurate logistics processes. For instance, they can identify causes of profit loss and then plan for ways to compensate for those issues.

Budgeting and forecasting elements of ERP also aid logistics by building detailed corporate finance plans capable of estimating a company’s future revenues and expenses. The financial reporting tools from an ERP software include predictive budgeting and workforce planning.

Top 10 ERP Logistics Software Options

There are many different software options if you want an ERP to automate your logistics processes:

Best
Overall
Logi-Sys Screenshot
Logi-Sys
Covers air, land, and sea modes of transportation
Cloud-based ERP
Includes finance and customer services
Best for
Logistics
Linbis Screenshot
Linbis
Focus on freight forwarding
Bsed by consolidators, NVOCC, couriers, and more
Includes quotations
Best
ERP
SAP Business One Screenshot
SAP Business One
Integrated departmental support
For small and medium sized companies
Includes manufacturing production management
Best for
Supply Chain
Blue Yonder Luminate Screenshot
Blue Yonder Luminate
Designed for planning, logistics management, and commerce
Predictive scenario planning for complete visibility, automation and control
Delivers dynamic eCommerce experience
Best for
Transportation
Kuebix TMS Screenshot
Kuebix TMS
Made for transportation and yard management
Uses predictive analytics
Delivers rapid implementations with a low TCO
Best for
Warehouses
ASCTrac ERP Supply Chain Software and WMS Screenshot
ASCTrac ERP Supply Chain Software and WMS
Designed to solve complex supply chain challenges in distribution and manufacturing
Innovative end-to-end supply chain software
Over 30 years experience
Best for
Manufacturing
ORION Enterprise Screenshot
ORION Enterprise
Full-featured ERP Solution for process manufacturing
Scalability of formulas based on available inventory levels
Visibility to real-time, enterprise-wide data throughout the supply chain
NetSuite ERP
NetSuite ERP Screenshot
Scalable, web-based ERP software system
Hundreds of third-party add-ons available
Ramco ERP Suite
Ramco ERP Suite Screenshot
Designed for large enterprises
100% business control and transparency with lowest possible operational costs
Acumatica ERP
Acumatica ERP Screenshot
Designed for the SMB market
Covers multi-channel eCommerce

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