Understanding ERP that makes it easier to manage business data

ERP or Enterprise Resource Planning is a system designed to manage all aspects of an organization's business in one integrated platform. With this, companies can automate various business functions such as finance, human resources, production, supply chain, services, and others.

The ERP concept developed from Material Requirements Planning (MRP) which first appeared in the 1960s. MRP focuses on production planning and control. As information technology developed, in the early 1990s, MRP evolved into ERP, covering not only manufacturing functions but also entire business processes.

This system aims to increase efficiency, reduce costs, and provide better insights through integrated, real-time data. Want to understand more about ERP and its use in business? Read this article until the end!

What is ERP?

ERP or Enterprise Resource Planning is a data collection and organization system carried out by integrated software. An ERP system is a solution to make it easier for businesses to manage daily data.

The data that can be managed is quite diverse, such as; accounting, manufacturing, marketing and HR data. With this system, data can be synchronized and move automatically, making it easier for managers to monitor the business as a whole.

ERP applications facilitate easier communication and exchange of information between departments across the company. This system collects information about the activities of various divisions, so that the information is available to other departments and can be used productively.

How ERP Works

After understanding the meaning, of course it will be very interesting to know how it works. In terms of process, ERP will help collect all data in the organization which is then stored in one central database.

After that, the data will be analyzed by the system to optimize business processes in an organization or company. The goal is to automate tasks, improve team collaboration, and better supervision and control.

Please note that ERP is a new digital tool that currently aims to be a data management solution. However, it is possible that the system will develop and provide various other solutions for running a business in terms of data management.

Types of ERP

With a dynamic system, of course ERP also has several types that can be used. The types of implementation are also quite varied according to the needs of the organization or company that wants to use it.

Here are the types of ERP systems based on their implementation:

Cloud Based

For those who want real-time data, using cloud-based ERP could be an option. This implementation system is available through cloud hosting services.

This cloud-based system is generally suitable for large-scale organizations or companies. This is because the larger the organization, the greater the need for real-time data analysis for business optimization.

On Premise

For this type, the system is used in a device directly in an organization or company. On-premise ERP systems are designed for all sizes of business, but are usually used by small and medium-sized organizations or companies.

Open Source

Just like other open source software, this ERP system allows companies to examine, modify and change the source code. The benefit of using open source is that it can make applications more suited to the organization or company.

Hybrid

This type of system combines two implementations, namely cloud and on premise. The use of this system allows it to be modified according to data needs and how much data is managed.

Benefits of ERP for Business

Various types of ERP system implementation open our eyes to the fact that currently there are systems that are easy and customizable. However, what benefits does using this system actually provide for business development in an organization or company?

The following are some of the benefits of an ERP system for business purposes:

Data analysis

In making a decision, of course there must be a valid data source to support it. This is where the function of the ERP system can help provide valid data both in quantity and quality.

Apart from that, with this system, daily data analysis can be carried out to help the production system quickly and precisely.

Workflow Effectiveness

Before ERP systems, you might update data by calling other departments by telephone. With this system, data updates can be done quickly and save communication time.

In other words, this system is able to provide effective benefits in workflow and communication efficiency.

Work Scheduling

Another benefit of having an ERP system in a company is in work scheduling. Companies can arrange employee work shifts, inventory delivery times, and manage time for maintenance within the company, both facilities and infrastructure.

An ERP system is a solution to make communication and data management more efficient. The system will definitely develop more sophisticated and provide other benefits for running an organization or company effectively.

Make sure your organization or company uses the type of ERP that suits your needs and is able to help with daily business activities.

Apart from ERP systems, there are also other ways to manage organizations or companies, namely understanding strategic management. Currently Prasmul-Eli has a short strategic management program that you can follow.

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Inventory is a form of asset that shows that a company has products to produce and sell. Inventory management is not arbitrary, because it will affect the number of sales.

Inventory also has various shapes and types, depending on the industry the company operates in. Therefore, get to know what inventory is and how to manage it in this article!

What is Inventory?

Inventory is the material or raw materials for making a product. Sometimes, according to Investopedia, inventory can also be the main product sold. Inventory must be recorded neatly and in detail in the company's books.

The correct inventory management process will help companies save operational and production costs. Below, we explain the goals, benefits, challenges, and how to manage company inventory.

Goals of Managing Inventory

Not only to ensure the company has materials for production, here are some of the purposes of managing inventory, summarized from Easyecom:

1. Ensure that the quantity of goods is sufficient for production and sale.
2. Avoid miscalculations.
3. Maximize production duration.
4. Optimize budgets and business plans.
5. Ensure the accuracy of goods purchased by consumers.

Benefits of Managing Inventory

Once you know the purpose, you must also understand the benefits of managing inventory properly:

More efficient

During the process of managing inventory, you will definitely learn about prices and available stock of goods. By knowing this, you can calculate the stock available at several locations. That way, the company only needs to order goods once and spread the stock to several locations. This will help companies save on shipping and operational costs.

Improving the quality of cash flow

By cutting operational costs, the company's cash flow will certainly get better. Especially when sales continue to repeat and increase income and profits.

Consumers become satisfied and loyal

By having stock in several locations or warehouses, you can speed up the process of sending products to consumers. Of course, while maintaining the quality of the product or goods ordered. Customers will become more loyal.

Automate tasks in the warehouse

Inventory management can be done with the help of applications. This will automate many management processes. That way, workers can focus on other things and production runs more effectively.

Improve worker performance

With the automation process, workers have a more focused work scope. They will have more time to complete major obligations. In addition, productivity and production effectiveness will increase.

Challenges of Managing Inventory

Quoting NetSuite, here are some of the challenges in managing inventory:

1. Ensure inventory figures are accurate.
2. Without the help of automation, manual processes will take a long time.
3. Changing consumer needs mean that inventory must be updated.
4. Maximize the warehouse so that inventory is neatly organized and products continue to run.

Types and Examples of Inventory

Raw/raw materials

As the name suggests, the items in this type of inventory are the main materials for making a product. For example:

• flour and eggs for making bread
• coffee beans and coffee filters to make coffee
• rice, eggs, oil, onions, meat for stalls or restaurants

Items still in production

Usually there is a special inventory to ensure goods have not finished production. Later, the goods production process will continue to become new products. For example:

• Cake dough that is stored overnight to rise.
• Casings, engines and other components to make cellphones.

Finished goods/products ready to sell

This type of inventory consists of finished and ready-to-sell goods. So there is no need for a production process or to have gone through it. Example:

• tissue inventory
• milk inventory
• new HP inventory
• new motorbike inventory

Component

This type of inventory is also goods sold by the company. For example:

• Engines, bodies, seats, wheels, rims, exhausts, chains and lights for motorbike production.

Operational and maintenance/repair tools

This inventory is usually stored in the same warehouse as the production site. All tools that must be used or used by workers to carry out production, for example:

• various production machines
• gloves
• face mask
• hard hats
• cleaning tool

Packaging materials

As the name suggests, there is a special inventory for product packaging materials. For example:

• bubble wrap
• plastic wrapping
• wrapping paper
• packing box

Inventory for refill items

This inventory is usually needed in restaurants or hospitals, because it must be ready to be refilled when it runs out. For example:

• tissue
• dish soap
• toothpick
• hand sanitizer
• disposable mask and gloves

Extra inventory

This type of inventory is kept for goods that are difficult to find on the market or whose prices fluctuate. So per

Businesses will buy 2-3 products at once. For example:

• motorbike engine components
• chemicals
• special machinery

Transit inventory

The goods included in this inventory will not last long in the warehouse. Because these items are only staying overnight or are being stored temporarily to be moved again. Example:

• The workshop will order machine components directly from the factory, then these components will be entrusted to the factory's branch or shop so they can be picked up later.

Reserve inventory

The difference with extra inventory is that for this type of inventory the items stored are often sought after or run out quickly. So companies will buy them in larger quantities to continue to meet consumer needs when there is a shortage. For example:

• cat litter
• motorbike outer tire
• new rims
• motorbike glass
• motorbike seat
• packaging raw materials

Leftover/unsold inventory

As the name suggests, this inventory stores leftover and unsold items. Usually also items that are out of season. For example:

• seasonal clothing or special collaborations
• seasonal food or drink
• bath and beauty products that don't sell out

How to Manage Inventory

Monitoring the availability of goods

First, of course, you have to monitor the number of goods and stock in inventory. Make sure the quantity is sufficient for production. Make a dose per week or per month.

Using online or cloud-based inventory

Today inventory can be managed and monitored with the touch of a finger. You can work with an online inventory service provider and access it via computer or cellphone.

Calculation for replenishment inventory

If you work in the service industry, of course calculating refill inventory will be very helpful. Make weekly or even daily calculations to maintain stock.

Create a batch system

To support the refill or restock process, create batches where you will make purchases within a certain time period. You can also divide what items are purchased in each batch.

Use a barcode system

The barcode system will make it easier for you to calculate stock and availability of goods.

The ability to manage inventory can be developed by learning directly from experts.
You can take our short training program to learn about inventory management by clicking here now!

The question of what consignment is is becoming more common as the business becomes more popular. Consignment has become a business model that is considered effective in various industrial sectors.

Basically, consignment is a selling concept where one party entrusts the goods he is selling to another party.

In order to expand market share, the consignment concept is being implemented by several business owners. This concept requires in-depth research to determine people's potential needs for the product.

What is the consignment concept like? For those of you who want to know more, read this article until the end!

Definition of Consignment

Consignment is a collaboration between two parties, both the owner of the goods and also the party who wants to help sell it. This consignment concept is when the consignor (consignor) entrusts goods to the entrusted person (consignee) and promotes them through any channel.

The purpose of this consignment concept is actually to expand the market for the products or goods being sold, but profits can still be obtained in large amounts.

Usually the consignment concept will be used for business people who have large-scale production and want to expand the market to various groups. Meanwhile, consignees also vary from shops or individuals.

So, how does the consignee make a profit from this business? There are two ways, namely; profit sharing system or increasing the selling price of the goods that have been entrusted.

How Consignment Works

After understanding the concept of what consignment is, then how does it work? Usually before taking an item to try to sell it as a whole, the consignee will do research.

The research carried out aims to find out the right sales and promotion locations. In this consignment concept, knowing the market and the people who potentially need the product or goods you want to sell is very important.

Once the consignor is sure, he will contact the consignee to deliver the goods and make a business agreement. Make sure you keep your business agreements in writing so that you don't miss anything in the agreement.

Benefits for Consignees

So what advantages does it provide for those of you who want to start a business with this consignment concept? There are several advantages that will benefit you as a beginner businessman, namely:

Power Capital

Consignees only have capital to promote and sell goods or products. In a consignment system, the consignee acts as a field seller where what is needed is the sales strategy itself. As a consignee, the capital required is also not large because it does not require a lot of production costs.

Minimal Losses

By doing business with a consignment concept, you don't need to think about fantastic losses. As a consignee you only need to pay the consignor when you have sold the goods. Quite interesting, right?

Collaboration with Various Parties

As a consignee, you are free to determine who will be the consignor. In this case you benefit from the connection side.

The more you get to know potential consignors, the wider your connections in business will be. This will increase effectiveness in sales without spending a fantastic amount of capital.

Disadvantages for Consignees

Even though it has its own advantages, the consignment concept also has disadvantages. For those of you who want to try becoming a consignee, first understand the disadvantages below:

No Sales, No Profit

In the consignment concept, what you need to know is that you will not get income if the product or goods are not sold.

Because you only take or entrust the goods, profits will be taken from profit sharing or you will increase the price of the product or goods. Therefore, in the consignment business concept you need to be diligent in promoting and understanding the market.

Not as Much Profits as Consignors

This definitely happens, especially in a profit sharing system. The consignor will definitely take a higher percentage of profits on the grounds that they incur production costs for making the product.

So, as a consignee, you are the one who just sells the product, it is very fair that the percentage given is lower than what the consignor gets.

Risk of Losing Consignor

As a consignee, you need to know that you could lose the consignor even though you have sold the product. The consignor has the right to determine which consignee he thinks is most suitable to sell the products or goods they make.

If it is felt that it is not suitable for the consignee, the product or goods will be withdrawn and they will look for a consignee that is more suitable for their purposes.

You also need to know that business performance is very dynamic and of course there are advantages and disadvantages to it. For those of you who want to start a business without fantastic capital, you can try the consignment concept.

However, you also need to think about interesting promotions and how to sell goods or products from the consignor you want. So are you interested in trying a business with a consignment concept?

Before starting, you need more knowledge regarding consignment concepts, especially about large-scale supply chain systems. Taking the Supply Chain Management training program from prasmul-eli could be the solution!

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