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By Sean Barbera • March 13, 2021

Supply Chain Disruption and ERP: Why Digital Connectivity Matters

Supply chains have always been a tricky business. But the complexities of today's global economy and the technology demands of the digital transformation trend coupled with a worldwide pandemic have created new disruptions and challenges.
 
At the same time, technology has facilitated interconnectivity throughout the supply chain, placing an even greater emphasis on speed, efficiency and clear communications with trading partners. To remain competitive in today's global marketplace, small to mid-sized businesses need the power that an ERP system provides.
 
Supply Chain Disruptors
 
There are a number of key challenges and disruptors to the modern supply chain. All of them are rooted in a need for better technology, whether they impact operations, customer service or communications with partners and other supply chain players.
 
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Some of the big disruptors today include:
 
Today's businesses are far from static. They require flexibility and scalability for business processes as well as information systems that will support changing business needs.
 
Business and supply chain process change happens continuously. A vigilant prioritization process integrated with key business and customer priorities must be maintained by supply chain and operations management teams.
 
Industry markets are changing and accelerating globally at a breakneck pace. Traditional supply and demand forecasting techniques, which are usually based on historic data, simply can't keep up with the pace of change.
 
Customer service is steadily transforming well beyond the product sale. Pre- and post-sale information and customer needs must be readily available to offer the best service levels possible.
 
The global nature of sourcing, production and distribution of products requires broader regulatory compliance. Stringent monitoring and control of supply and product value-chain mandates must also be adhered to.
 
The modern supply chain spans multiple production and supply chain services partners globally. The pharmaceutical, branded drug and consumer goods markets are all examples of industries that have expanded their global reach to access emerging markets.
 
Spreadsheets are not enough. Managing an SMB using spreadsheets and other outdated, manual processes in today's competitive global climate creates a significant disadvantage for any company.
 
Overcoming Challenges with a Modern Solution
 
All of the challenges and disruptors mentioned above can be addressed through technology and digital connectivity. In particular, implementing a comprehensive ERP solution can help SMBs take full advantage their supply chain data as well as share information with key supply chain partners to meet most of the above challenges.
 
One example of how a modern ERP solution can help is the case of Countrywide Tire, the largest inner tube distributor in the US. The company attempted to modify its old ERP system in 2012 to keep up with increasing demands and competitors. But it soon found that the changes broke previous customizations.
 
The company had relied on add-ons and modifications to its older system because of the large number of order customizations it offers customers. Those customizations had proven to be a competitive differentiator for Countrywide, but they were a problem from a technology standpoint.
 
So Countrywide Tire decided on a modern cloud ERP as part of its digital transformation and connectivity upgrade, choosing SAP Business ByDesign to modernize its operations, customer services and supply chain processes. Customizations and changes to the new system could be made on the fly as a result of using a modern ERP solution without the time-consuming and costly changes required of the previous system.
 
Countrywide Tire has benefitted from improved accuracy through supply chain data validation as well, and an emphasis on best practices that has tightened up the company's business processes.
 
“If you factor in cost and efficiency, it's through the roof,” says Eric Johnson, vice president of operations at Countrywide. “There’s been so much cost savings from Business ByDesign, it would be hard to even put a number on it. It really changed our data game and our ability to do tasks a lot more efficiently because we're not trying to do these workarounds to get it into an Excel format, or manually typing data in.”
 
More on Countrywide Tire’s digital transformation can be found in the case study, Rolling into the Future with the Right ERP Foundation.
 
Risk Mitigation in an Age of Disruption
 
Strengthening supply chain responsiveness and digital connectivity is a major step toward mitigating risk and improving decision making during unsettling times. A modern ERP solution offers a singular view of information across the entire business, as well as end-to-end supply chain visibility. Advanced business intelligence and analytics can be applied to real-time information, facilitating automated, data-driven decision-making.
 
A comprehensive ERP solution also promotes more forward-thinking planning processes and can anticipate fluctuating product demand and supply needs. It will also alert businesses of potential risks, bottlenecks and shortfalls.
 
SMBs have a consolidated view of all customer demands and may prioritize their execution plans, streamlining operations and creating additional efficiencies. An ERP solution also offers a window into production priorities, existing and incoming supplies and current stock to determine whether order deadlines can be met.
 
Modern ERP solutions offer a pathway to greater speed and digital access across the entire supply chain. In the complex and disruptive world of supply chains, digital connectivity is key. By aggregating supply chain data and sharing that information with key partners, SMBs can realize a host of efficiencies while remaining competitive in an increasingly aggressive global landscape.
 
Learn more about how ERP can help with supply chain management for distributors.