What is ERP Software?
ERP stands for Enterprise Resource Planning and this type of software was first created in the ’90s. At that time, that software was created to be a straightforward industrial tool that was used to index, track, and manage resources throughout the manufacturing process. Individual products, raw materials for production, and the people involved in the manufacturing process are the main resources that ERPs were initially designed to keep track of.
As the needs of the apparel industry grew and the process of automating and digitally managing your business became more prominent, those base systems were expanded. Most of the time these additional tools are referred to as modules. Some of these are in the form of standalone tools, such as Sage or Quickbooks for accounting, and they are integrated with the original ERP systems. There are also newer ERP systems that act as a hub for a variety of these tools. This type of software is what most apparel businesses rely on even today. The most common practice is to select an ERP and then expand on that with a variety of other software tools through integration.
Some ERP software products allow users to customize the tools that they subscribe to or purchase as part of a package whereas others just include a set of features without any options for customization. As you read before, each of these different tools within the ERP base system is called a module and across all different ERP systems, there are a few modules that almost always appear and a few that don’t appear as often as would benefit an apparel company.
Accounting and Financial Management
This is unfortunately an area where most ERP programs fall short. Many of them market themselves as a fully-equipped solution but will not have a native module that can handle the accounting in your apparel business. Accounts payable, accounts receivable, a general ledger, and all sorts of other financial tools are necessary to help you keep track of your resources and monitor the financial health of your business.
Having all of your financial information in one place is a surefire way to help reduce errors, decrease redundancy, and help you to create a more hands-off approach to handling your books. Because this is an area that many ERP solutions fall short, this is something that having an all-in-one software can help to solve.
Decoration
Apparel decorating software has moved from being a standalone product to being integrated into a lot of different ERPs. There are also still programs that function on their own and can be integrated into an ERP as well. This type of module is designed to help streamline the process of decorating orders and keeping up with their maintenance. Decoration modules are similar to order entry modules but they take that process one step further by keeping all of the decoration information in one place and keeping track of those orders from the time you receive them to the time that you deliver the product. These can be used completely in-house or if you send these types of orders out to a third-party.
Decoration modules within an ERP will help you keep all of the information related to an order in one place, manage where the proofs are going to go and will manage the workflow overall to help make sure that there are no errors and that everything is functioning smoothly. Sometimes these can be combined into the order entry modules or just work on their own.
Inventory Management
Managing your inventory as an apparel company is extremely important. Apparel is unique in that you’re going to have more inventory than almost any other type of business because of the sheer variety of products that you will be selling. There are different styles, sizes, and colors that all need to be kept up with. This type of module or specific software is designed to allow information to be shared across multiple platforms to keep it accessible.
You will be able to keep track of your inventory and keep it organized by SKU, size, color, or style. Regardless of which organization method is the most effective for your business, this aspect of ERP software was created to help you to maintain that. Having a very solid inventory management system in place will also help you to reduce your costs. The best tool for you is going to give you insight into your supply chain so that you can work towards reducing your minimums to be more in line with what you’re actually selling.
Manufacturing
The manufacturing module in an ERP software suite serves as a way to completely monitor and control all of the supply chain processes. Automating the supply chain process is going to help you to improve visibility and so much more. Having all of the appropriate manufacturing information in one place can help keep more accounting information available and it can also help you plan more accurately. Understanding the manufacturing process at this level will allow you to understand the materials that are being used and how much you’ll require for certain production runs.
Most of the manufacturing tools out there are designed to help manage multiple workflows, different bills of materials, and you can even monitor different workflows within one production run of a single style. These tend to be very full-featured, especially because this is one of the main components of an ERP.
Order Processing
Order processing is sometimes called the order lifecycle. This is the process that traces a product from the moment that it is ordered until the moment it is delivered. A lot of the time, the decoration module is combined with this but they can exist separately. This part of the software will trace an order from a quote, through the fulfillment process, and finally to the consumer. It is designed to ensure that invoicing, deliveries, and even managing backorders can be carried out more efficiently.
Using a software product like this or ensuring that your selected ERP has this module will help you improve your delivery times and will help you manage customer satisfaction more effectively. A lot of full-featured order processing modules will allow your customers to see what is in stock in real-time and can even help your business process returns.
Purchasing
The final module that is present in most ERP software is the purchasing module. Forecasting your purchases is necessary to help you manage your resources as effectively as possible. This module will help you keep track of sales and understand what is selling and help you to pick out trends in your products. This will help you to understand how much material you need to purchase for your production runs, which will ensure that you have everything you need on hand and won’t leave your customers waiting. Also, they will help you to forecast what is popular and when that way you do not run into the problem of wasting any of your resources.
This entire module is designed to help you predict your needs so that you can have what your customers want on hand and won’t have dead stock building up during lower points for certain products that you sell. Additionally, this module can serve as a direct connection between the purchase orders you make and the accounting modules, so that all of the information is accurate, streamlined, and updates in real-time.
Where Do ERPs Fall Short?
Apart from accounting, there are certain things that ERP software just can’t offer. All industries, apparel in particular, are experiencing a surge of online business. People are turning to their computers to order their clothing rather than going out to a store as they may have done in the past. When your market expands globally, that means that there is a surge of customers that can now purchase from you that may not have had access before. Just that alone is enough to make your business pick up significantly.
Because there are some ways that ERP modules don’t fit into one another as seamlessly as an all-in-one product would, you may run into some hiccups along the way. If you don’t have all of your tools properly integrated when your business starts to scale, it can be hard to keep track of all of the information and data that is going to be flowing through your business as the orders start rolling in.
Another way that ERP falls short is that they often fail to include e-commerce, CRM, and other key features that help your business run more smoothly in the digital world that we live in. These tools can be integrated with some of the more popular ERPs; however, with an all-in-one like ApparelMagic, all of those other key software tools are all right there and at the ready. This can lead to you spending less to get the tools you need, your tools can work together more seamlessly, and all of your information is going to be in one centralized location. Keeping control of all your data is very valuable when you’re growing.