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Automation in ERP information systems as a source of competitive predominance

Company gaining a competitive advantage means today, above all, the ability to function in a constantly changing market conditions. Environment enforces the accuracy of decision making and fast responses to signals coming from the market and enterprises. In the case of production enterprises, adapting to changes depends to a large extent on effective management of warehouse and information flow of the organization.  The efficient and competitive production enterprise relates to effective management of business processes and integrated information system supporting production planning, organization and management.

One of the main factors of competitive advantage is automation of logistics processes. Companies looking for savings upgrade processes, automating them, thanks to which they gain:

  •  reduced work costs
    •    reduced material consumption
    •    increased rate of processing
    •    reduced error rate
    •    improved quality

These factors depending on branch and type of business have different impact on company costs. It is not surprising that modern partnerships are looking for improvements in this area. The solution is the ERP information system for management. It has various functionalities which allow for process automation in the company starting from distribution, production, through finances, projects, renovations, ending in payrolls and personnel. One of the most interesting functionalities of this system is KOMIS which gives possibilities of:

  •  purchasing the item as a property of the deliverer
    •    administering the item bought in this way analogically to an item bought in a standard way – as a property of the company
    •    making stock of such an item
    •    shifting between warehouses
    •    returning to the deliverer for, for example, an exchange

Thanks to this functionality at the moment of purchasing there is no commitment towards the deliverer. The bought item belongs at the moment of buying to the deliverer and only the place of its storing changes. Just the consumption of the item for company’s needs by e.g. its sale, using it in the production process or other internal consumption causes automatic transfer of goods from the property of the deliverer to the property of the company. Extremely important is the fact that the commitment concerns only used amount of the item from KOMIS, not the whole delivery. Thanks to this, the payment for the goods is maximally postponed and the company gains better financial liquidity. The system automatically makes transactions and does accounting required for service of this process. In an efficient and fast way and without any mistakes it supports current accounting actions.

The second of the interesting applications are NARZUTY ZAKUPOWE (PURCHASE MARGINS). Margins may be related to e.g. transport costs, insurances, certificates, etc. These costs are mostly distributed later by the finance department of the company and this is usually a very labour-intensive action. Systems of ERP may automatically add margins to the order. Each margin may have one of the possibilities of its automatic distribution allocated, e.g.:

  •  proportionally to the item weight on the purchase order
    •    proportionally to the item volume on the purchase order,
    •    proportionally to the line value on the purchase order,
    •    or e.g. proportionally to any line of the purchase order.

When accepting the item from the purchase order to the warehouse the system automatically accounts it according to abovementioned possibilities. Proper preparation of the purchase order with related margins reduces significantly the work of the finance department which can then be focused mainly on controlling without a necessity of hand accounting invoices for different kinds of margins. Additionally, this functionality is related also to the intrastate report. Each business entity which imports or exports goods abroad is obliged to submit an intrastate declaration every month to a competent state authority. Such reports are also automatically generated by the ERP system and their generating only takes a moment. Intrastate reports can be printed or generated in the form of a file. The file considerably facilitates and expedites sending the report by Celina program. What is important, ERP systems have also a possibility of automatic division of transport costs into the national and abroad section. Thanks to work automation by the system, enterprises reduce costs and time needed to complete those tasks.

As it can be seen on a few examples the possibility of process automation inside the company is huge. It gives a great possibility of improvement and optimization of business processes. Therefore, it is worth following what is happening on ERP market and looking for the best opportunities for you. These systems regularly, from year to year, develop their functionalities and work on their ergonomics and optimization.

Advanced Business Solutions Sp. z o. o company, a provider of ERP software attentively monitors and traces the market needs so as to offer to their customers up-to-date worldwide novelties of solutions for companies from different sectors.

Biznes Benchmark Magazyn #11/12/2014


Author: Piotr Łatko, Advanced Business Solutions

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