Business and risk have never been good friends. Although many firms win fortunes and conquer new markets through calculated risk, they nonetheless try to avoid it. Certain risks can cause firms lost revenue, brand damage and disrupted partnerships, among other effects. So firms need to manage uncertainty and minimise risks. One of the ways they could do this is to consider using enterprise resource planning (ERP) systems. Most ERP systems come with many functions that can help your firm to manage uncertainty and minimise risk effectively. Below are seven ways that you can manage uncertainty and minimise risks with an ERP system.
Using demand-driven MRP
Supply chain reliability is essential for any business. That is why you should consider switching to demand-driven material requirement planning (MRP). Unlike traditional MRP that can only forecast demand and supply, demand-driven MRP can track your firm’s demand for materials and allow you to make adjustments in real-time. This can help reduce supply and demand discrepancies.
Automating reorders and manual tasks
Human error is a leading cause of risk for many businesses. Automation can help reduce human involvement in repetitive tasks, thereby reducing the potential for human error. You can automate most of your firm’s functions such as inventory, sales, supply chain, and order management through an ERP system.
Sharing supply buffers with your partners
You can mitigate any disruptions to your business by sharing supply chain information with partners, in turn improving your firm’s supply chain management. Using ERP will tie together your firm’s functions and enables better communication between business partners. This will help your firm keep its stock at the right levels.
Beefing up your firm's compliance management
Compliance violations can be a significant risk for your business, especially if it is in a heavily regulated industry. ERP can help you minimise the risk of compliance variance. It will do this by monitoring your firm’s processes and materials and ensuring their conformity to regulatory mandates. You can also set up alerts whenever there is an incidence of non-compliance.
Improving decision-making with a single source of data
Incomplete data may lead to poor decisions, thereby increasing business risks. ERP systems can help minimise business risk by aggregating business data to improve decision-making.
Using predictive analytics to boost risk management
With all data tied together in a single place, your firm can leverage business intelligence and predictive analytics applications to improve forecasting and risk management. You can use business intelligence tooling to perform predictive analysis to improve decision-making.
Keeping better tabs on suppliers
ERP can help you manage uncertainty and minimise risk by giving you a better insight into your firm’s potential disruptions and supply chain. ERP can minimise risk by providing a seamless way to interact and negotiate with your suppliers. Moreover, it can provide a comprehensive analysis of your suppliers’ performance for better optimisation risk prediction. It gives you a greater awareness of your suppliers’ variables as well as their production schedules.
Risk is inevitable in any business. But ERP software can help reduce the risk your firm faces in various ways. They include greater insight, compliance management, improved partner coordination, and automated processes. Although many businesses don’t fully leverage their ERP systems to reduce risk, they really should improve business productivity.
For more information on how WinMan ERP Software can help your business, contact us today.