Creating a Powerful ERP for Logistics: Insider Guide

The market for logistics ERP systems keeps growing, with $78.4 billion projected by 2026.
And it makes sense. These systems help streamline logistics, improving business processes
and reducing operational costs. However, you get the most benefits out of any tool when it’s developed well, with the aim of modernizing the business and sticking to the budget.

From transportation companies to manufacturers, the benefits of optimized routing, better shipment planning, and broad data analytics are apparent. The same goes for the end-client – companies that purchase goods and need shipments from transporters regularly. ERPs can provide a benefit to the whole supply chain.

In this article, AmconSoft will share industry insights to help you decide how to best tackle the creation of an ERP for logistics. We’ll discuss the challenges that it helps overcome, the necessary features, and the advantage of custom development over using pre-made systems. Without further ado, let’s dive in.

Challenges of Logistics without an ERP System

Instead of simply promoting the benefits of ERP logistics software, we’ll directly talk about the problems caused by its absence. These, and more, are all solved by having a custom ERP solution:

• Inefficient operations;
• Difficulty tracking inventory;
• Increased risk of fraud;
• Inaccurate data.

Inefficient Operations

Optimization is key when it comes to running a business and the whole point of ERP is planning things more efficiently. Without it, your operations will always have a bit of slack that can be removed to cut the cost of daily processes.

Difficulty Tracking Inventory

The other core function of ERP in logistics is to streamline the process of inventory tracking.
This software should ideally automate any inventory movement, guaranteeing that incoming and outgoing operations are brought into the system on their own. Thus, the chance of human error is eliminated, and inventory operations are sped up substantially.

Inaccurate Data

Calculations made with specialized software will, without fail, be correct. On the flipside, data that’s entered manually and via apps that aren’t tailored to your business, has a chance of errors. Those would result in inventory discrepancies and, potentially, snowball into bigger problems. Thankfully, ERP systems in logistics help avoid this chain of events altogether.

Features of Modern ERP Solutions

So, what exactly do you need to have in your ERP tool to make it as effective as possible?
We’ll list the key features of a modern system, one that can cover all the needs of logistical processes. For example, an ERP in logistics:

• Inventory management;
• Planning tools;
• Communication features;
• Warehouse management.

Inventory Management

We went into this in the previous section. Yet, to expand, you can automate a lot of the typical inventory movement and tracking through a custom-made ERP. Specific items or types of items can be assigned to particular operations with the ability to set recurring actions. It helps with long-term contracts where the same processes occur.

Inventory managament ERP Example

Planning Tools

It’s essential to have flexible and expansive tools to plan your daily business processes. This way,
you can assess your future development and understand your next moves, all within your ERP logistics system. It’s one of the core strengths of ERP – allowing businesses to eliminate uncertainty and structure their operations down to the most important details.

Simulation planning tools in anyLogistix

Communication Features

Adding a way for ERP users to communicate across departments or even branches will help speed up their use of the software. It also keeps everything on record, in addition to making your logistics ERP system a centralized tool for all aspects of daily work.

Warehouse Management

These features will help streamline and optimize procurement and shipment, as well as account for your vehicles’ movements. They also include data collection that helps understand when repairs
and maintenance may be necessary. It’s an efficient tracking ecosystem altogether.

WMS Solution Example

ERP for Logistics: Ready-Made vs Custom

Now, is there even a big difference between going for an existing ERP or having a vendor build software for logistics that’s tailored to your business needs? We’d say yes, there’s a huge gap between the two.

For one, a custom solution can be specifically adjusted to fit your company’s processes right away. This can include very niche operations, recurring or otherwise, as well as a specific design that matches your own business structure.

In addition, a custom-made logistics ERP system will always be available to change how you see fit. As your company or the market changes, it will be easy to have the developers of the ERP add new functionality or adjust existing features.

There is, of course, the question of the cost. However, while pre-made software is cheaper initially, the long-term savings from custom development make up for that difference. You end up saving money through the utility that logistics ERP software brings.

Real-World Successful ERP Examples

To show you what ERP really does for a business, let’s highlight some examples from
world-renowned businesses.

The South Korean giant LG Electronics spent years crafting and integrating its own custom ERP system. They focused on making the application flexible, letting their regional branches have full control of their processes. Any HR employee could access relevant data for their office while other information would stay securely locked away.

Next, we’ll talk about Amazon. The marketplace giant uses SAP – an ERP system made all the way back in 1972. Despite being a ready-made platform, SAP has been evolving steadily with AI support and machine learning, boosting Amazon’s analytics.

Another giant using logistics ERP systems is Starbucks. Relying on the Oracle ERP, the company streamlined its supply chain and tracked its revenue and expenses across thousands of locations.
It’s also an example of facing the choice between ERP vs. CRM development and choosing both. Oracle integrates these systems into one product, an all-encompassing business suite.

Custom ERP Costs and Factors Which Affect Prices

We’ve already talked about the advantages of custom ERP software for the logistics industry, so let’s discuss the financial aspect of it. Let’s start by listing what goes into the price of these solutions:

• Development cost
• Implementation cost
• Infrastructure expansion
• Maintenance and support
• Training costs

This is a straightforward expense. You pay the developers to design and create your own bespoke ERP system. It’s a flexible cost, depending on how much customization you need and the functionality you want. It’s still likely to be the brunt of the budget, so plan accordingly.

There’s a number of expenses associated with actually integrating the ERP software with your company’s ecosystem. This initial setup is best left to professionals, who’ll get everything
up and running. It’s also a chance to automate certain processes right away.

You will have the ability to request regular maintenance on the system, whether to fix bugs or request updated features. Similarly, any business customer can request support for the ERP if any is needed

It’s also crucial to make sure your infrastructure actually has the hardware in place to support the logistics ERP software. If necessary, the vendor will provide an assessment of your infrastructure
and, if any issues exist, expand it to fit the scope of the ERP system

Regardless of what type of ERP system you pay for, you’ll need to train your employees to work with it. This type of software has a lot of intricacies to it, so it’s best to include the training cost in your ERP budget. A lack of proper training could result in wrong inputs and improper software usage, costing your business time and money.

Choosing the Right ERP Solution

So how does one pick the appropriate ERP app for their business?
Here’s what matters when choosing, based on AmconSoft’s own experience.

Amount of Tailoring Required

You saw the real-world examples of ERP successes and, perhaps, you spotted the pattern – huge enterprises using pre-made solutions. The reason they can do that is their huge budgets allow them to take a general market software and spend years and millions of dollars adapting it.
This isn’t something a smaller business can afford, both in terms of budget and the time
it spends to establish its ERP, making it easier to go for custom ERPs instead.

Core Feature Focus

Every business has its own needs. Some want an ERP for supply chain logistics, some just need it for analytics, while others may want deep automation. These are, potentially, three very different apps. Set your priorities for what you want the app to do and you’ll quickly narrow down potential options

Potential for Change

Pivots aren’t uncommon in business, and, as your company’s priorities or goals change, you may need your ERP to perform wholly different functions. That’s why it’s important to choose an ERP where you have control and can request new features and updates down the road. It’s one of the core reasons why we prefer custom solutions over pre-made ones.

AmconSoft as Your Custom ERP Software Development Partner

Those seeking high-quality ERP solutions can rely on AmconSoft for any custom development.
We have spent years building trust with our clients by delivering solutions to even the most challenging problems. Our portfolio includes a variety of cases, including ERP and logistics.

One of our recent projects was an ERP system to automate business processes. In addition, this system serves extensive real-time analytics, exports all relevant data, and compiles reports.
As a result, we made the client’s operations run smoother while removing a lot of manual input.
In the same vein, AmconSoft created a transport management system for a logistics business.

We completely automated data collection and processing for the client, nearly doubled vehicle load factors, and cut costs by 30%. This was a huge boost to the client’s business, all on the back of just one custom system.

Conclusion

We’ve talked about the usefulness of ERP in logistics and the advantages of custom development
vs ready-made systems. The guide also covered the cost of such systems and their real-life applications. With all that said, it’s clear that ERP software can be a big benefit to a transportation business, helping keep track of your vehicle fleet and plan resource use accordingly.

AmconSoft hopes you found this guide helpful and feel ready to modernize your company with
a powerful ERP system. If, however, you would like some more information or need a skillful team
of developers to create the ERP solution for you, you know where to turn. AmconSoft has been operating for seven years, delivering high-quality products to our worldwide network of clients.
So, start your ERP journey today with a trusted partner – contact us now.