The Fast-Moving Consumer Goods (FMCG) industry needs to maintain a high volume of both sales and production to thrive in today’s competitive market. Additionally, the companies must operate at low-to-medium margins while facing the risk of global supply chain disruptions.

Today, Enterprise Resource Planning or ERP for the FMCG industry is replacing manual or repetitive processes to help companies counter common challenges. A complete ERP system such as SAP can seamlessly automate FMCG-specific processes such as inventory, supply chain, and customer management.

As FMCG companies recover from the aftershocks of the 2020 pandemic, they can no longer rely on inefficient manual processes that can cause human errors. How can you make the most of an ERP solution in your FMCG company? Let’s discuss this.

ERP for FMCG Business

What is ERP in FMCG?

For a fast-moving industry like the FMCG industry, ERP solutions are imperative to expand business operations and automate its various processes. Among the main use cases, ERP solutions enable FMCG companies to adapt quickly to changing consumer demands and achieve customer satisfaction.

Also Read: How SAP Business One Solutions Improve the B2B Experience for Your Customers

Even more, ERP solutions can streamline their inventory and supply chains, thus avoiding substantial losses in the event of any external disruption. To boost effective decision-making, ERP modules provide shared access to real-time data across business functions.

Here are some of the ERP capabilities that are transforming the FMCG sector:

  • Accurate demand forecasting or estimating the time of the year when it is best to promote any FMCG product.
  • Supply forecasting or managing an efficient supply chain to determine the best time for procuring raw materials.
  • Integration of business operations across geographical locations makes it possible for FMCG companies to manage their global business operations using a single ERP system.
  • Seamless order management integrates all order-related processes right from procurement, assembling, invoicing, and shipping.

How can any FMCG company make the most of its investment in an ERP solution? Let’s discuss that next.

How to Make the Most of Your ERP System

There is little doubt about the business value that ERP solutions offer to FMCG companies. For instance, the SAP ERP solution can improve the performance and efficiency of any FMCG manufacturer while reducing operational costs.

Here are five ways in which they can leverage the most benefits from their ERP investment:

1. Optimize Inventory Management

In today’s economic situation, inventory management is core to the success of any FMCG company. A streamlined inventory system ensures that companies can meet growing customer demands without exceeding their inventory-related expenses.

You can optimize your inventory management using the best ERP for FMCG solutions. ERP tools can store and provide real-time information about the inventory or stock levels along with details of individual stock items and when they need restocking.

Additionally, you can configure your ERP solution to dynamically adjust to changing customer behaviors.

2. Improve Customer Management

In the B2C industry, consumers love personalized offerings that cater to their specific needs. An ERP system helps in improving customer management by identifying any bottlenecks to an optimum customer experience.

By collecting and analyzing customer data from various sources, an ERP tool can help in identifying patterns or trends in customer behavior. Through its customer relationship management (CRM) module, ERP tools can facilitate collaboration among various FMCG functions. This helps in improving business strategies for order management and production.

3. Enhance the Efficiency of Supply Chains

For any FMCG company, an optimized supply chain is crucial for smooth production. ERP solutions improve supply chain management with real-time tracing and tracking of required materials. You can also use the ERP supply chain module to improve communication among global suppliers and partners. This ensures the on-time procurement of raw materials and timely delivery.

ERP-based supply chains are also useful for eliminating any waste of raw materials and improving the workflow from start to finish.

4. Implement Robust Warehouse Management

A robust warehouse management system is essential for any FMCG company to deliver optimum efficiency across all business departments. You can use your ERP solution to streamline warehouse operations by creating a customized process flow.

Using ERP, FMCG companies can align the following warehouse-specific processes to perform without any disruptions:

  • Picking process by using an ERP-enabled barcode system to pick up the right warehouse items and the correct order.
  • Packing process by using ERP-based label generation to automatically label goods with the necessary information.
  • Shipping process by using an ERP solution along with transport management to select the right shipping method at the right cost.

5. Improve Sales

FMCG companies offer customer value through low-cost items that are purchased frequently by their consumers. A high sales volume is crucial to the market success of any FMCG brand. With ERP solutions, FMCG companies can estimate future product demand through detailed market analysis and sales reports.

ERP sales module enables FMCG companies to optimize their production process for immediate demands and also identify new market opportunities for increasing sales revenues. With quality testing, FMCG brands can also increase sales by delivering high volumes of high-quality products to the market.

Next, let’s discuss why SAP is the best ERP software for the FMCG sector.

Why is SAP ERP the Best Solution for FMCG

With growing competition, the FMCG industry is facing a host of challenges such as changing customer behavior, lack of operational visibility, and traditional sales practices. Using the SAP ERP system, FMCG companies can overcome these challenges and boost productivity by:

  • Generating better insights using SAP’s analytical functionalities.
  • Understanding customer expectations and redefining their marketing strategies.
  • Boosting their predictive capabilities using real-time data.
  • Improving their decision-making process.

With an ERP solution such as SAP Business One or SAP B1, FMCG companies can integrate various functions like supply chain management, accounting & financials, production planning, and materials procurement. For instance, SAP B1 can help in managing your financials including your sales invoices, payments, accounting, and applicable taxes.

On the production side, SAP B1 helps in creating and managing Bills of Materials (BOMs) as well as defining the optimum product price. For efficient supply chain management, SAP B1 integrates processes including the materials flow, procurement, warehouse & inventory management, and production.

Also Read: SAP Business One Helps In Implementing Best Practices Of Inventory Management

Apart from improving financial operations, the SAP ERP solution for FMCG facilitates smoother communication and information sharing among employees and managers even when they are located across geographical locations.

Conclusion

ERP solutions are transforming business environments across industry domains and FMCG is not an exception. To stay relevant and competitive, FMCG needs to invest in ERP solutions like SAP Business One which is ideally suited for small and growing companies.

On their own, FMCG companies often fail to maximize their returns from investing in an SAP ERP solution. This is why they should consider partnering with an ERP solution provider like Praxis Infosolutions.

At Praxis, we have developed expertise in implementing SAP B1 solutions for a variety of industries including manufacturing, retail, and FMCG. Our team of ERP experts can work closely with you to understand your business environment and how ERP can solve business challenges.

We can help you leverage your investment in the SAP ERP solution. Contact us today with your business requirements.

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