What you need to know about the rise of ERP for supply chain business needs

Supply chain visibility, the golden goose of the fashion industry, catapulted as a priority during the pandemic. Then, supply chains came under the microscope to meet UFLPA compliance while double-digit e-commerce growth demanded responsive supply chains.

Competitors with the best supply chain management technology outperform, so having the right enterprise resource planning (ERP) platform in place is vital. It helps with visibility/transparency, compliance, cost management, resilience, and the ability to reliably deliver goods on time.

Industry influencers see it the same way. “With the rise of Industry 4.0 ushering smarter manufacturing through technological advancements, the sector now has larger than ever before potential to fulfill its goals, as powered by ERP,” said ERP Today magazine’s feature article, “Manufacturing roadblocks: Turning challenges into opportunities.”

And, according to the 2024 CGS Supply Chain Trends and Technology Report*, clients are taking note:

• 65% say it is a 2024 top improvement priority to address supply chain disruptions
• 46% of companies have ERP implementations in progress or planned for the near future
• 41% of businesses have supply chain visibility and tracking IT projects underway

*Based on survey of 300+ respondents from retailers, eCommerce businesses, brands, wholesalers and manufacturers.

Here, we’ll explore why a specialized ERP is so important for complex, high-SKU fashion, apparel, footwear, retail private label, and home goods companies? We’ll look at some of environmental factors like e-commerce and sustainability compliance that are driving investment in ERP solutions. We’ll also discuss how to select an ERP that meets the requirements of customers, the C-Suite, IT and other functional departments, divisions, and supply chain partners.

What is ERP?

ERP technology is the central nervous system for core business processes. It enables companies in the fast-moving fashion industry to change and evolve with retailer and consumer requirements. ERP software empowers companies to plan, manage and synchronize daily distribution and supply chain operations, to reduce costs, increase efficiencies, and stay competitive.

Examples of CGS BlueCherry® ERP's capabilities include:

• Supply chain process standardization
• Retail visibility to vendor supply chains
• Omnichannel planning, inventory management and fulfillment
• AI-powered analytics and business intelligence
• Order management
• PLM integration
• Connectivity between design, product development, sourcing
• eCommerce connectors to Amazon, Walmart, BigCommerce, Shopify
• Purchase orders
• KPI reporting
• Order-to-cash management
• Predictive and actual costing
• Credit management
• Purchasing and receiving
• Financial management
• Production, sourcing, import management
• International tax management and compliance

Keeping up with omnichannel commerce

E-commerce is the top growth opportunity for many fashion, apparel, footwear and home goods companies. Online sales require fast-paced order management. Every e-commerce business has different processes and customer service levels, but ensuring the best customer experience in e-commerce is crucial; the penalties when a brand disappoints their customers can be severe.

The best ERP solutions support:

• Omnichannel fulfillment
• E-commerce and wholesale order and inventory management
• Connection to major players: Amazon, Shopify, Walmart, Target, and more
• Integration to Etsy, Square, Taobao, Tmall, Carrefour, Zalando and other popular online platforms
• Drop shipping to Distribution Centers, store or direct-to-consumer for Macy’s, Nordstrom, VF Corp., Levi, Ralph Lauren, TJX, Costco and other customers

“Logistics and order management are highly complicated, but a good ERP can help remove much of the chaos. From calculating shipping costs to creating a label to order processing, an ERP can automate everything and provide communication to the customer. This eases the burden on the company and provides a better customer experience,” according to BigCommerce.

Gaining supply chain visibility: Scope 3 ESG and Beyond

We’ve already established that having the right ERP solution in place is fundamental to thriving in dynamic and competitive markets in the fashion industry. But there are also compliance requirements that are pushing brands toward building for greater supply chain visibility and transparency. Retailers and brands have Scope 3 ESG in the crosshairs.

To improve their own sustainability reporting, brands must work with suppliers who prioritize ESG too. Every manufacturer in the supply chain is under scrutiny. So are third-party logistics (3PL) providers, sourcing agents, consolidators and shippers. Winning or losing business is on the line.

All are looking to their partners for lifecycle assessments (LCA), Co₂ emissions data and measurable ESG milestones.

The best ERP provides supply chain visibility that is, clear, consistent, standardized, always available, easy to access, and formatted to your ESG KPIs. Additionally, top ERP systems offer end-to-end visibility for:

• Real-time order status
• Track and trace
• Factory digitalization
• ESG documentation
• Chain of custody
• Contractor management
• Shop floor control

“An ERP system can help a company track its carbon emissions, monitor its supply chain for ethical and environmental compliance, and report on sustainability initiatives in a transparent and standardized manner,” said Eric Kimberling, CEO, Third Stage Consulting Group, in his blog, “The Role of ERP in Sustainable Business Practices.”

What factors should be considered in selecting an ERP solution?

With so much to consider, how can your business choose the best ERP solution, whether you’re in fashion, apparel, footwear, home fashions or retail? You must consider team and technology in equal parts to ensure the right fit. The software must be tailored and flexible to meet the needs of your specific business needs, and your software provider should be a trusted business partner with experience in your industry. Consider these factors when evaluating an ERP partner:  

What partner is the right fit?

1. Do they have deep experience in your industry?
2. Have they demonstrated an understanding of your specific business, including your priorities and goals
3. Have they made process improvement recommendations?
4. Have they devised the technology solution that is the right fit for you?
5. Are you confident that they can efficiently implement the solution with your team?
6. Do you believe they will remain engaged with your team over time as business needs evolve?

Is the software the right fit for my business?

1. Standardization: Consistent, well-structured, centralized data enhances supply chain visibility. It makes it easier to provide reports and real-time access to key performance indicators (KPI), which vary according to the stakeholders who need them. With the right ERP software, there is an automated path to actionable information, without siloes, visibility gaps and myriad interfaces to maintain.
2. Cloud based: Software hosted in the cloud is the preference for many brands, retailers and manufacturers. There are multiple deployment models: public cloud, private cloud, hybrid cloud and on-premises. All can be successful, depending on your unique business needs. The vendor you choose should be able to answer questions about the pros and cons of different implementation approaches, including considerations such as scalability, automatic updates, security, compliance, support and workload.
3. Cybersecurity: Protecting and securing sensitive business and consumer data is important in a world with sophisticated cybercriminals.  You must carefully interrogate your vendor’s security profile. CGS, for example, uses Infinity to provide unmatched security against fifth generation cybersecurity attacks --  across the full cloud, mobile and threat prevention spectrum.
4. Scalable and flexible: Business cycles rise and fall. Demand surges and consumer spending ebbs, sometimes unexpectedly, for various reasons. Your ERP solution should empower you to scale and flex with your company’s growth and contractions. For example, scalability is essential when taking a brand onto Amazon or Walmart.com, or when onboarding new suppliers, or adding new lines, retail programs and acquisitions. It’s also just as important to be well-positioned for downshifting inventory to avoid overstocks in the case of supplier consolidation.
5. Global capabilities, localized performance Fashion is an around-the-clock industry. Ecommerce never closes its doors, and when brick-and-mortar store doors do close for the night in one region, factories around the world still hum with activity.  Core business processes and workflows must keep moving. Look for an ERP solution with multilingual, international functionality, plus performance for the last mile to a retail distribution center or consumer delivery. 

Sunsetting or changing and ERP...

• Necessity is the mother of invention. However challenging, there comes a time when legacy ERP solutions must be sunset. Why? Eventually, they become too outdated to get the job done, the customization requirements become unwieldy, the demand on IT for maintenance and stop-gap solutions become untenable, and overall... the old solution just becomes too expensive relative to the value it provides.

Despite the high costs and drag on people, brands are often reluctant to make a change from legacy systems because of the investment of time and resources required for the transformation. The good news is that these investments in the right ERP solution will pay for themselves in due course.

BlueCherry ERP is an effective and low-friction alternative to legacy ERP systems. We have an agnostic, open software development framework, plus the most extensive pre-built database for high-SKU product portfolios. This adds up to a low-risk ERP transition path with minimal disruption, plus the option to keep your core financial system in place, whether Lawson, QuickBooks, Sage or other accounting software.

Ultimately, an ERP decision must fit within your company’s strategic plan. “Business conditions, competitive pressures, objectives, strategies and priorities change. Therefore, even if a company successfully defined a capabilities roadmap a couple of years ago, it is paramount to periodically review and update it,” said The Parker Avery Group blog, “Let’s Talk About Your Capabilities Roadmap.”

Want to learn more about BlueCherry ERP? We’d love to discuss your business challenges and growth opportunities. Contact us!