How to use ERP workflow to improve supply chain management

ERP workflows are kind of like a digital SOP. The steps we are supposed to take in our process are linked together as connected ERP transactions. Errors caused by disconnects, when one person performs a transaction and a second person makes a transaction that doesn’t fit with the first, are usually eliminated.

Purchase order management workflow

A supply chain management workflow usually relates to purchase order (PO) management. Traditionally, a buyer sees a demand from a sales order or forecast and places a PO just ahead of the lead time for the purchased item. The PO remains in place until the material shows up and we receive it in our inventory. If the delivery is perceived as late, some expediting activity might help.

Recommended Reading: Manufacturing ERP - Select the right ERP for supply chain management success

We could use an ERP workflow to create a string of reminders after the PO is released. We should expect an acknowledgement shortly after its release. We should also expect an ASN ahead of the expected delivery date. The reminders can automatically alert the buyer to watch for the expected communications and take action in the event of a problem.

We can assume that the PO matches its demand at the time it is placed. Our buyers are well trained. If the demand moves, it is for a reason, such as a sales order placed inside the lead time. Someone in production releases a work order and begins production to cherry-pick an easy operation. Once again, ERP workflows can help to manage this process.

For example, when a customer service representative tries to save the sales order inside the lead time, the sales order can be marked as “pending approval status” and sales management can be alerted. The buyer can also be alerted, and sales and material personnel can communicate immediately to resolve the situation before it becomes a problem.

Production scheduling workflow

In the same way, when a member of the production team tries to release a work order into production off schedule, ERP workflow might prevent the change and stop order processing or the allocation of charged time against the job. Alerts can go to production and material managers so they can quickly put out the fire before it spreads.

Supplier-receiver workflow

The workflow can also move from the supplier to the receiver. If they acknowledge a PO but offer delivery later than requested, the buyer can see the problem, and the affected job or sales order can be used to notify the person responsible for the demand. We then have the opportunity to move demand or find an alternative supplier right away. The ERP workflow will not let us ignore or forget that the supply and demand are out of balance.

These examples provide ideas for how you can use ERP workflows to automate processes and reduce errors in supply chain management. We have self-driving cars and trucks on our highways already. Why not have self-driving supply chain processes too?