Harris KhanLogistics and transport market sectors connect other industries and businesses via land, water, and air paths. Companies involved in these operations provide for on-time accurate delivery of raw materials or ready products, workers, and even information.
Without proper logistics, everything can go wrong and lead to huge losses of money, time, and reputation. That’s why a top-notch ERP for transport company is highly desirable.
What is an ERP?
ERP is an acronym for Enterprise Resource Planning, but even its full name doesn’t shed much light on what ERP is or what it does. For that, you need to take a step back and think about all of the various processes that are essential to running a business, including inventory and order management, accounting, human resources, customer relationship management (CRM), and beyond.
At its most basic level, ERP software integrates these various functions into one complete system to streamline processes and information across the entire organisation.
Why Transport Companies need an ERP Solution?
An automated ERP application is a must for efficient and accurate transport management. It collects, organises, and processes all useful and critical transportation-related information from within and outside the organisation. In particular, it allows to better plan the transportation, route optimisation and tracing the transport vehicles, and makes control over the deliveries much easier, without being dependent on the specific senders. ERP does not replace transport companies traditional work process. It just makes the work easier, more efficient and more productive.
The biggest advantage of integrating a transport company’s ERP solution with a third-party mobile application is that it is totally flexible and cost effective solution. You can use the third-party mobile application when and where you want. As far as you are connected to the Internet, you can have access to your ERP application and any relevant information.
Benefits And Downsides Of ERP (Summary)
The benefits of putting ERP software to work in your transport business are obvious, but with the changing business and market conditions, there may be some aspects that cannot be handled as easily as you anticipated. Understanding these pitfalls before you buy an ERP system can save you a lot of trouble in the long-run. Forewarned is forearmed, so after reading this post you will fully comprehend the ERP issues before you dive in and have a smooth ERP implementation project is not as difficult as it may appear. Did you know that a high-quality ERP can always be good for your business?
Transport companies are helped to be more efficient and competitive on a cost basis in a long run. Some of the best examples of improvements are the following: reduced delays and transportation-related costs; safer and better cargo handling, material tracking, and cargo documentation; greater productivity and performance; improved production, inventory management, and planning; governance and compliance through traceability, faster responsiveness to customers, and so on. The list is not complete. To give a detailed description of the benefits of ERP software for the transport sector, a separate article will be required.
Business for transport companies is all about good contracts and long-term relationships with customers. For your direct customers, you should share information about contract details, shipment details, etc. so that they have a clear understanding of your services. Also, share with them standard templates of contract details, and remind them time to time that if they don’t have a fine tuned contract, your company will not be able to perform and keep any promise regarding delivery. At the same time, you should keep the contract details and other customer information confidential and print out only the relevant information.
For customers, transport companies can allow to track their shipments by using different methods such as sensors for GPS tracking, vehicle tracking devices (VTD), Web applications, Google Maps, smartphone applications, and social media such as Twitter and Facebook. All of them can help transport businesses to monitor the progress by tracking the individual shipments to giving real-time updates about the cargo and vehicles involved in the transportation.
By using special monitoring and control systems, companies can monitor any route and calculate the time in between any two geographical locations. In addition to that, the same cloud-based system can aid as a tracking system to locate any missing cargo and vehicle.
In addition, senders can track all cargo from the material source to the end location using information stored and updated by the ERP software. In addition to that, they can also track the quantities of materials along with the real-time movement of the shipments. For the purposes of the above-mentioned explanation, let’s have a look at fictitious data. Cargo shipments were created on January 26th 2015 with a total quantity of 500mt. In this case, the ERP system is updated with the following details of shipments.
The shipment is on its way from Chongqing to Hohhot through Chengdu. The first supplier is Meng and the weight is 16mt. The second company is Cheng and the weight is 15mt. Total weight of the shipment is 31mt. It will be delivered to the recipients on February 3rd. No problems were encountered in transportation.
By using this information, the sender can forecast any problems with the transportation related issues in the future. Therefore, if freight has been late, the sender will have a clear picture for any timely action without any further delay.
For the carrier, if any problem occurred with the transportation it would have provided valuable information for reviewing the situation in the future. For the same case mentioned above, here are some of the questions that could be asked by the users:
- Did the shipment arrive on time?
- Did the shipment arrive on time? Did the shipment arrive at the expected address?
- Did the shipment arrive at the expected address? Were there any missing items in the shipment?
- Were there any missing items in the shipment? Were there any misplaced items in the shipment?
- Were there any misplaced items in the shipment? Was the carrier able to deliver the shipment safely?
- Was the carrier able to deliver the shipment safely? Were you able to deliver the shipment to the correct address?
These are just some of the questions that can be asked by the start ups, medium level businesses or enterprise companies of all sizes.
You will find ERP applications with varied compatibility’s to cater to all of your business needs.
There are countless supply chain management (SCM) software packages in the market, at affordable prices, that can help you achieve competitive advantage for relatively low capital cost. The ROI from implementing an ERP system cannot be determined, but if the software is used efficiently, an organization gains efficiency, higher productivity, increased customer service, and reduced operating costs.
Finding the right software, among the huge number of ERP packages available, is not easy. You need to assess your short term goal as well as your long term goal for your business and match it with the potential of an ERP that matches your needs.
The right ERP software, when installed and configured correctly is easy to use.
Implementing an ERP solution at a Transport Company
Let’s have a look at the how to make a distribution process in the transport business more organized and streamlined by using the following steps:
Step 1: Installation/configuration of an ERP software
In order to streamline the distribution process for your company, you need to deploy a transport ERP software and make sure the software is compatible with your trucking fleet, support all drivers, and compatible with a core system. Now that the core system has been installed, the next thing is to implement an ERP package.
Step 2: Initial data migration
In the beginning, you have a lot of data that needs to be entered manually into the system. Data includes customer name, address, phone #, geographic region, product types, product sizes and warehouse storage locations. This data is fed through the system manually. Most providers have a large supply of low cost labor in certain regions of the planet so that your company can quickly onboard the data.
Step 3: Staging Data Migration
After you have successfully entered your product data, its time to enter your customer data, truck data, driver data, driver performance reports, driver statements, billing and payment data. Again, most ERP providers have the capacity to handle the amount of data that will be required by your company.
Step 4: Reporting and Analysis
Now that the software is installed and is being fed the data, you should take some time to see what’s available and how you can make use of the information you have at hand. You must understand that purchase-to-pay and inventory management are two sides of the same coin.
Step 5: Monitoring and controlling
Employees use reports to monitor productivity and customer satisfaction on the truck, schedule dispatch drivers for routes, track maintenance, auto-generate bills, track orders in process and the ones for shipment, coordinate with reservations, dispatch, and pickups. It is never too soon to start incorporating employee training into your management plan. Most organizations will have a small operating budget, but the investment will pay off into the future.
Step 6: Implement data analysis
With all of the data at hand, it is time to take advantage of it. You have the perfect ‘actionable’ data you need to improve profitability of your organization. You need to take this information and run with it.
If you decide to log into the ERP solution, you will have no problem making sense of the data you will see. But first, you need to start inventory management and purchase-to-pay functionality.
For your inventory management, you will need to enter each individual product that you sell into the inventory module. Once you have done that, you should start entering your supply chain processes.
By doing this, conversion rates are better, and you can optimize supply chains. From this time on, you should make use of the information you have at hand and make decisions based on the information at hand.
For a complete ERP System for your trucking business, you will need to review your business plan and assess what you need to do to become more efficient, what you need to do to increase your profitability. You should also assess the risk and what you need to do to decrease your risk.
Based on this assessment, you will know what level of automation you need. If you plan to implement your ERP in-house, you will need to assess where your employees are today, and where you need them to be.
When you assess this information, you should take into account that some employee’s may not be able to handle certain tasks. You should proceed and start with a few modules and then add more as your team learns how to use the system.
One thing to remember is that employee training should be ongoing. It should be seen as part of the deal when employees are hired. Employees should be trained from the very beginning about the ERP system.
It’s always great for employees knowing that quality services at the lowest prices are available to them. By having this in place, your employees will be on the look out to do things more efficiently and waste less time. Keep in mind, the employees will need to be trained in all the modules, and no one will be exempt. The goal is to get your staff to use the tools available to them in the ERP system. The better they use the system, the better off they and your business is.
Another important thing to remember is that in order to implement the ERP system effectively, you will need to evaluate your current workflow and see where a lot of time is spent. Once you are able to identify where the time is being wasted, you will need to streamline these processes.
In order to do this, you will need to set the bar high for efficiency on all levels. Once you are able to do this, you will give your customers a high level of service at the lowest price, which is exactly what you want to accomplish.
Next, you should assess your customer service and see where you can do better. This will include analyzing all of the services you provide customers such as sales, shipping, tracking, and payment.
You should start by seeing what your current customer service procedures are, what kind of infrastructure you have in place and how you are able to provide the best customer service.
The way you will be able to determine if your business is increasing profitability is by tracking the new information that is introduced into the field. You should check out how much time is being saved, track this with the new solutions, and see where savings are being made. You should review this data on a regular basis to see if there is an impact on the bottom line.
The above steps will help you implement an ERP solution at your transport business.
Should you hire an ERP Consultant?
If you are starting a new business or already have a business and still need a user’s manual for the ERP solution that will allow your employees to get the most out of it, you will need to hire an expert or at least a consultant. ERP consultants will help you through the implementation process. They will help you stay on track with the implementation process.
But don’t let consulting firms sell you the latest ERP software. Make sure you have them review the business processes that you have in place. It’s better to work with someone who is familiar with your industry and knows how the trucking industry works.
You can expect to pay anywhere from $5,000 and up to review and provide implementation guidance on your new ERP solution.
However, this will be money well spent as you will avoid countless hours of time away from revenue generating activities. If you spend time reviewing the ERP modules you can literally save thousands of dollars on outsourcing employees to have your software implemented.
Consider these factors that will come together to make the most efficient way for your company.
What to look for in an ERP solution for Transport Companies?
- All modules
Before you consider any software, you need to review the following modules usually found in any ERP software, but unique software will come with its own.
These modules are:
- Manufacturing
- Inventory management
- Service and call management
- Accounts payable software
- Accounts receivable software
- A mobile App that allows you to do the same tasks you would do on your PC with the ERP feature
An ERP solution for the transport company will almost always include some of the following modules as well, but every company has unique needs.
- Purchase-to-Pay
This module is a must have for any company that can make that happen. Many companies that have been established for years still do not know how to make this happen.
3. Payroll
This is a module you need to make sure you have set properly. A poorly set up payroll module can have a huge impact to your business.
4. Management information and reporting
This module will allow your management team to view how the company is running, it will allow you to view inventory, services, sales, service calls.
5. Financial end
This is a module that will enable your management team to make proper decisions based on facts gathered from the previous module.
6. Sales and customer management
The sales and customer management module will allow your team to produce quotes for your customers as well as invoices. It will allow you to manage your clientele at the best of your ability.
7. Inventory tracking
This module will allow you to track your entire inventory. You will know the products and services you sell, when you need to order more and when it is time to start looking for more suppliers.
8. Mobility
You will want your employees to be able to access your ERP solution from anywhere.
9. It should be scalable
The software you purchase should be scalable. Your business will grow and you will want your software to grow with you. Many small business owners add additional modules and features to their existing software as time goes on. Having an ERP solution that is scalable will give you the ability to easily upgrade your module.
10. Reporting
A good ERP solution will have plenty of different kinds of reports. You can view a general report that shows you exactly how the company is being run, day to day. You will be able to make decisions based on this, as you will be able to view equipment status and inventory levels.
11. Ease of use
You will want to find a system that you are not having to sit down for hours learning how to use. The system you choose should be easy to use. If you find you are having to teach your employees how to use it, you need to find a different system. Your employees do not have the time to waste learning a new piece of software.
12. Scalability
As your business grows, so will your software. You want to be able to grow with your software, not have to overhaul or completely change it.
13. Security
When you are managing a company, you will obviously have to handle sensitive and personal information. You will not want to have this information fall into the wrong hands. Your software will need to provide you with secure solutions that will prevent this from happening.
14. Reporting
As you can see, your software will allow you to view reports in all modules. This will allow you to see in clear detail how the company is performing. You may not like the results, but at least you will know where and how to make the necessary changes in the future.
15. Overall Service Level
The overall service level you receive for your investment in a software system will be a top factor in the decision making process you are currently going through. You will want to find out what others say about the product, as well as how long it takes the company to respond to any issues that may arise. Look at reviews of the company both on their website and on social media.
16. Financial End
You will need to look at the financial end of things, as you will want to have accurate financial reporting. You will want to be able to run monthly accounting reports to monitor the company’s performance. Make sure you look into the first two modules finances and cost accounting.
17. Supplier and Billing Management
This will be one of the most popular features of your new software as it will allow you to manage your entire network of suppliers as well as your entire network of customers. You will easily be able to manage your entire network of suppliers from receiving to payment and shipment.
18. Automation
Finally, you will want a system that is automated. You will want to know that you are only entering the information once and the information is being used correctly. As you can see, an automated system will save time. Today’s businesses need to be able to run more efficiently and save busy people time. They need to produce a product fast and at a high quality.
If you find a solution that is automated, that will be the best decision you can make. You will save plenty of time at the office in both managing personnel and tracking your company’s progress.
Primary Benefits of Transportation ERP Management Solutions
- Optimized delivery plans.
Manage distribution methods by adding or replacing them under one roof. Introduce omnichannel delivery strategies. Track the services that work for you, let the rest go to waste.
- Streamlined Operations
Minimise inefficiencies and optimize your operations. Lead-time management, real-time visibility, faster response and improved execution will drive production quality and productivity.
- Automated Accounting
Automate your accounting processes by integrating your ERP with your accounting software. Get more accurate and timely reports, and know your business, what’s working and what isn’t.
- Record-keeping for compliance
Logistics processes contain opportunities for improvement to reduce errors that may result in fines for non-compliance.
- Security
Track all company assets in one location. A centralized log of all movements, assigned to responsible parties, ensures no items are lost or mishandled.
- Improve Company Compliance
Compliance allows you to optimize your operational performance by preventing losses. Reduce manual work for compliance-related documents and improve reporting time with pre-defined templates.
- Fraud Detection
Keep your business safe by having your ERP solution’s fraud detection options in place. Have a system that will detect fraud, overbilling activity, late shipments and other signs of fraud.
- Recruitment
Build a skilled workforce and streamline internal processes with customisation tools. Easy to complete online applications, automated notifications and streamlined employee training enable you to close deals faster.
- Supporting Internal Processes
Give your personnel the tools they need to deliver consistent quality at all times by centralising all scheduling, tasks and customer information. Give your team real-time visibility into the state of all operations and customer orders.
- Increase operational efficiency
Outsource the functions you don’t need so you can focus on what you do best. Gain a competitive edge by focusing your resources on core business activities, and implement easy customizations to operate best in your industry.
- Industry specific needs
Transportation companies face unique challenges, but your ERP solution can help to remove these. Get ahead of the competition by supporting industry-specific needs such as inventory management and notifications.
- Enhanced Performance
Get the results you want and see your profits grow as your operations run smoother. With your data in one place, you can confidently take business decisions and set goals for growth.
- Scale to grow
A system that provides seamless integration of multiple channels and locations can support your company’s growth.
- Global reach
The team of experts at your disposal will help you to set up and tailor your solution to the needs of your company.
- Versatile solution
Use only the tools necessary to grow your business. Connect your ERP to the systems you already use. Customise your solution to fit your company, and gain a competitive advantage.
- Credit and Collections
Take advantage of all the modules in your scenario. Credit, collections, invoices, reporting and other financial tools allow you to see everything your business owns and owe with ease.
- Real-time visibility
Keep your business at its prime by real-time visibility into your production, customer orders, and delivery status.
- Easy to deploy
Whether you’re keen on guided installation, need your experts to walk you through it, or you want to set up the system yourself, you can get the job done in days or weeks, and not months.
- Up-to-date information
Prevent your business from delivering expired products to your customers. Simply track expiry dates, and take measures to prevent loss.
- Integrated supply chain
Extends an integrated view of the supply chain from transportation to warehousing, logistics, and customer service to create a seamless customer journey.
- Intelligent Brokerage
Reach your clients by increasing your visibility in effective data collection and sharing. Make better pricing and profit decisions and remain competitive across the board
How to pick an ERP Management Solution for your Transport Company?
An ERP management solution must be properly planned, and you need to move your business from a fragmented system to on automation software. The system must offer the transport company:
Variable tariff management system – If you are running any kind of transportation service, you must be aware of the cost involved in maintaining the vehicles. Depending upon the length of the trip, the cost of fuel is different. So with big fleets, it becomes fairly challenging to maintain the proper check of the cost. Variable tariff management system will help you to allocate the cost of vehicles based on the distance travelled.
Cash Management System – An ERP management system makes use of several modules and it plays a vital role in the robust functioning of the same. An important point to be considered here is the management of cash flow in the business. The ERP management system should allow the traders to keep a check on the inflow and outflow of cash. This will help them to avoid loss in their business transactions.
Service delivery monitoring system – The transportation company should have a way to track and manage its activity. An ERP management solution will serve this purpose. A transportation unit will use a combination of vehicles catering to various segments. An ERP management solution should be versatile enough to manage all the segment of the business.
The transportation companies are to keep a track of the records related to all the vehicles and the activities of all the drivers. On top of this, they need to have proper record of the vehicles and need to keep a track of the fuel consumption of the vehicles. The above mentioned are some of the vital areas which an ERP Transport Management Solution is needed for.
Briefly speaking, if you want to take utmost advantage of the automation that can be offered by an ERP Management solution for your transportation business, you need to know about the following:
1. Which features does the ERP management solution offers as per your requirement?
a) Does it have features like managing many segments of the business?
b) Is it capable of handling vehicle and driver handling?
c) Are there features in the ERP management system that can manage the vehicle repair and maintenance?
d) How about the functionalities like online fuel requests, etc.
e) Does the ERP management system help you manage multiple locations?
f) Is a merchandise management facility available?
g) What features does it have for credit and collections?
2. Cost factor
a) How much does the ERP management solution cost?
b) Is it supported by an ongoing support package?
c) How much is the cost of the in-house or offshore development?
d) Does the ERP management system that you are considering offer value for money?
3. Is the ERP management solution flexible?
a) Does the ERP management solution that you are looking to implement have the necessary flexibility to be customised?
b) If you have a unique requirement, you can always work with vendors to customise the product for your needs.
4. Implementation method
a) How complex is the implementation of the ERP management solution?
b) Is the vendor providing ready to use self-service deployment option?
c) Does the vendor allow pilot implementation of the product?
d) Does the vendor allow your own project management team to work on the implementation?
e) Can the vendors schedule the implementation in a phased manner?
f) Are there any long-term benefits of the ERP management solution you are planning to implement?
g) How does the solution help you manage the financials and reporting?
h) What about the user interface? Is there an existing user interface that needs to be augmented or replaced by the new one?
i) Is the new system in sync with the current functionalities?
j) Does the solution conform to the industry standards like GDSN, GS1, XDI, etc.?
k) What is the overall cost of ownership of the ERP management solution?
5. Service and Support
a) Does the provider who has been assigned to provide ongoing support to the implementation provide something like a Service Level Agreement?
b) Whenabouts due is the expiration of the service and support contract?
c) Is the service and support being provided by a company that you trust?
You need to decide if you want to take an agile, adaptable, or a custom fit solution. If you are prepared to pay more for quality, consider custom-built solutions.
If you prefer to have ready-made modules, ERP management solutions are a good option. However, these solutions are pricier and do not offer any flexibility.
As far as the services are concerned, ERP management is still a relatively newer solution and there are a few service providers providing services. Ideally, they should be able to complete the projects within the deadline. In case of any delay, you can expect the reason and a reasonable timeframe for completion. You can also expect that the updates to the software will be delivered on a regular basis. You should also query the service provider on how you’ll access the solution once it has been implemented. If you need to provide more people access to the solution, the service provider should be able to offer you a reasonable rate for providing the additional licence.
However, if at all you require the additional access beyond the basic license, you could go with the ERP management solution where users will be able to access the tools from anywhere across the globe. If you already have the software or a framework in place, then it is ideal for you to choose the custom fit options. But in case, you are starting with a clean slate, the custom fit solutions may be a bit costly. Likewise, if you are in the IT business, you can always customise the existing software to get the business in the direction you wish to go.
The decision is yours. You need to decide if you want to take an agile, adaptable, or a custom fit solution. If you are prepared to pay more for quality, consider custom-built solutions. If you want to be able to make changes to the solution, select an agile solution. The custom fit solution will offer a comprehensive solution and the user will have whole lot of features available to him. But then again, the high costs involved with this option make it less viable.
The user can decide the data sources from which he or she would like to extract the information. This can be anything from transaction data to e-mail, web reports, or actual business data like employee exchange information. The user has a wide range of control over the extent and quality of control, which they can place over the data they are extracting. If the user opts to get a whole lot of data, they can extract any data that they may need and want.
An ERP management solution is an essential part of the business operations for any transportation enterprise. The large transportation companies make use of ERP management solution to avoid any kind of inconsistency or lack of flexibility in their business operations. The ERP management solution provides an important perspective to the transportation companies by providing robust business analytics to the transportation companies. The ERP management solution is also a key an important component of the overall business operations.
