ERP for logistics companies: key features, benefits & considerations
June 7, 2024
ERP for logistics helps logistics companies automate essential business processes, such as fleet, asset, warehouse, finance, sales, customer, and HR management, improving operational efficiency, customer service, and decision-making.
Itransition assists logistics companies with implementing ERP software to help them gain greater visibility into their business workflows, automate repetitive tasks, and plan their business processes more accurately and efficiently.
Key capabilities of ERP for logistics
An ERP system consists of multiple software modules, each of which covers a specific functional area or business process. And although the functional scope of such a solution varies depending on a company's needs and requirements, we can outline key modules that are typically found in ERP systems for logistics organizations.
Getting a comprehensive view of a company’s fleet, optimizing fleet vehicle performance, and reducing delivery time, all while minimizing fuel, labor, and other operational costs.
- Real-time vehicle tracking
- Fuel management
- Route optimization and planning
- Fleet management cost tracking and optimization
Maintenance management
Optimizing fleet maintenance operations, increasing vehicle uptime, and reducing maintenance costs.
- Vehicle maintenance planning and scheduling
- Managing scheduled and unscheduled repairs
- IoT-powered predictive maintenance
- Vehicle parts inventory management
- Maintenance costs tracking and budgeting
- Creating, assigning, and tracking maintenance work orders
Warehouse management
Enhancing inventory visibility across warehouses and creating robust strategies for order putaway and picking to optimize warehousing operations, maximize space utilization, improve order accuracy, and ensure timely shipments.
- Tracking inventory in real time as goods arrive, move, and leave the warehouse with barcode scanning
- Warehouse layout planning
- Inventory management and optimization
- Labor management
Procurement management
Gaining visibility and control over the procurement process, measuring procurement spending and identifying cost-saving opportunities, tracking vendor performance and building stronger relationships with them.
- Procurement planning
- Supplier management
- Invoice processing
- Order fulfillment monitoring
- Procurement data consolidation (supplier data, contracts, invoices, and company spending)
- Expenditure tracking and analysis
Financial management
Performing payments, speeding up financial close and budgeting, getting real-time visibility into a company’s financial performance, and ensuring security and compliance with the required regulatory frameworks.
- General ledger management
- Accounts payable and accounts receivable
- Cash flow control
- Budgeting and forecasting
- Tax management
- Financial reporting
- Asset management
- Lease process management
Order management
Automating order-to-cash process management from order capture to fulfillment to quickly resolve any issues, provide better service, and meet customer expectations.
- Multi-channel order processing
- Order fulfillment tracking
- Automated invoice generation
- Pricing management
Document management
Optimizing the storage and management of contracts, invoices, shipping documents, purchase orders, and other documents, ensuring quick database navigation and easy document retrieval.
- Centralized document storage
- Document version control
- Document archiving, backup, and disaster recovery
- Multi-user collaboration on documents
- Electronic signature integration
HR management
Automating HR administrative tasks and gaining insights into employee performance to ensure better workforce planning, make recruitment more effective, and increase employee engagement.
- Employee data storage and management
- Recruitment and onboarding management
- Working shifts and attendance tracking
- Training programs management
- Automated payroll calculation
Sales & marketing
Getting real-time visibility into the sales pipeline, tracking customer interactions, and automating marketing and sales campaigns to improve sales performance and increase customer retention and loyalty.
- Lead and sales management
- Opportunity management
- Sales forecasting
- Customer relationship management
- Marketing campaign management
Analytics & reporting
Transforming raw enterprise data into valuable insights across various business aspects, including fleet efficiency, sales levels, market trends, and a company’s financial health.
- Enterprise-wide data consolidation
- Root cause analysis
- Scenario planning
- Predictive and prescriptive analytics
- Scheduled and ad-hoc reporting
- Real-time data visualization via interactive custom dashboards and reports
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Key logistics ERP integrations
To get real-time access to accurate consolidated information across the company’s departments, logistics businesses should integrate their enterprise resource planning system with the existing IT environment. Here, we share a list of software solutions that can be connected with the ERP software for logistics to eliminate data silos and facilitate streamlined order fulfillment, accurate transportation process planning, and efficient supply chain management.
Transportation management system
By integrating an ERP solution with a transportation management system, logistics companies can gain insights into logistics operations performance, generate accurate delivery forecasts, optimize freight costs, and accelerate order fulfillment.
Data sent from TMS to ERP
- Transportation schedules
- Loads and delivery routes
- Freight costs
Data sent from ERP to TMS
- Shipping orders
- Customer data (delivery addresses, contact details)
- Inventory details (product availability and location)
- Transportation and shipping cost info
CRM software
By connecting ERP with a customer relationship management (CRM) system, logistics businesses can ensure that customer, sales, financial, and inventory data is synchronized across all departments. This facilitates reduced manual data entries, streamlined order fulfillment, and personalized service delivery.
Data sent from CRM to ERP
- Customer data
- Sales forecasts
- New orders
Data sent from ERP to CRM
- Order status updates
- On-hand inventory data
- Payment statuses
- Shipping pricing lists
BI software
Logistics companies can use business intelligence (BI) tools to analyze vast amounts of data stored in the ERP system to get better visibility over logistics operations and, thus, optimize routes, reduce transportation costs, and improve delivery times. With BI predictive analytics capabilities, companies can forecast demand, anticipate service delivery disruptions, and plan for future growth.
Data sent from ERP to BI
- Financial data
- Customer orders
- Order details
- Transportation information (shipping costs, delivery times, routes)
- Employee KPIs
- Asset data (utilization and depreciation data, maintenance schedules, and costs)
EDI software
By integrating electronic data exchange (EDI) software with ERP, logistics companies can automate document exchange with their partners, clients, and suppliers, thus ensuring the accuracy of the shared data and real-time visibility into transaction statuses.
Data sent from ERP to EDI
- Invoices
- Order & delivery confirmations
- Shipping notices
Data sent from EDI to ERP
- Purchase orders
- Payment confirmations
- Contracts
IoT
By integrating IoT devices installed in vehicles, cargo, and other corporate assets with ERP software, logistics companies can gain real-time visibility into transportation operations, fuel consumption, and fleet performance and optimize delivery routes and resource allocation accordingly.
Data sent from IoT to ERP
- Real-time vehicle & shipment location
- Fuel levels
- Engine health
- Cargo temperature
- Humidity
- Pressure
Benefits of ERP for logistics businesses
Unified data storage
With logistics ERP, companies consolidate information on finances, customers, fleets, and freights into a single trusted source of truth and eliminate data silos existing between multiple departments, ensuring data accuracy and ease of access.
Data-driven decision-making
Businesses make informed decisions and fine-tune logistics processes by utilizing tailored reports and dashboards that cover everything from how vehicles are used and managed to how well employees are performing.
Workflow automation
Logistics ERP helps boost operational efficiency and cut costs by automating time-consuming and tedious tasks such as financial report and invoice generation, order processing, vehicle maintenance scheduling, etc.
Reduced transportation expenses
Logistics organizations use ERP to track, analyze, and optimize fleet performance and fuel consumption, load distribution, maintenance schedules, and resource allocation in real time to lower operational costs.
Better compliance
Logistics companies achieve compliance with transportation, customs, safety, and environmental regulations on local and international levels by keeping comprehensive documentation on all logistics operations and complete audit trails at hand.
ERP implementation roadmap
Implementing an ERP system involves consolidating various business functions and integrating third-party systems, and any misstep can lead to operational disruptions and lost revenues. That is why ERP implementation requires careful planning. Here, we outline a general roadmap for implementing logistics ERP software.
1
Business analysis
Business case identification
Technology environment analysis
ERP requirements elicitation
2
Design
ERP architecture design
UX/UI design
Technology stack selection
3
Planning
Defining project scope and deliverables for each development stage
Project budgeting and scheduling
Risk management strategy outline
4
Customization/Development
Setting up development and testing environments and CI/CD pipelines
Customizing an off-the-shelf ERP solution or developing custom ERP modules
Platform integration
5
Testing
ERP functional testing
ERP security, performance, and usability testing
Issue resolution
6
Deployment
Deployment to the production environment
Data migrationÂ
User acceptance testing
User onboarding and training
7
Post-launch support
ERP user support
ERP infrastructure maintenance
Software upgrades
Factors to consider when implementing ERP for the logistics industry
Custom vs off-the-shelf
When implementing an ERP solution, companies have to choose between developing an ERP platform from scratch and configuring/customizing off-the-shelf software according to their business needs and specifics. Both custom-built and ready-made ERP software options have their benefits and drawbacks. Thus, you have to choose based on your initial budget, timelines, and the required functionality.
Out-of-the-box ERP
An off-the-shelf ERP solution offers sets of predefined features that, when properly configured and customized, can fully cover a logistics company's most common business needs. Most modern ready-made ERP systems incur lower initial investments and can be implemented faster since they don’t require the development effort associated with custom solutions. However, as off-the-shelf ERP platforms can lack logistics-specific functionality, you need to make sure the application offers robust integration and customization capabilities to address industry-specific needs and facilitate ERP interoperability.
Custom ERP
When opting for custom ERP development, logistics companies cover both generic and industry-specific business workflows, as well as smoothly integrate ERP with any third-party systems. However, custom ERP solutions imply higher initial investments, take longer to develop and implement, and can be expensive to scale up. Moreover, logistics companies bear full responsibility for maintaining and securing the ERP environment, which requires having a team of experts to support and upgrade the solution, conduct thorough security assessments, and set up advanced security measures.
Deployment model
ERP adopters have several deployment options to consider. To choose the ERP deployment model, you need to consider your business needs, the company’s technological capacity, and the type of ERP software you want to implement.
On-premises ERP
On-premises ERP systems are hosted within the organization's local IT infrastructure. Therefore, the performance of the ERP software directly depends on the capacity of the internal servers. When opting for on-premises ERP, logistics companies should make sure their servers can scale along with the company’s business needs and still maintain a high speed of operations.
Cloud ERP
Cloud ERP solutions do not require local hardware infrastructure and can be easily deployed and scaled along with a company’s needs. However, subscription fees for cloud enterprise resource planning systems can accumulate over time, leading to higher TCO compared to on-premises ERP solutions.
Hybrid ERP
Hybrid ERPs allow businesses to scale their operations using cloud resources while maintaining key ERP modules on their premises for security or performance reasons. Implementing a hybrid ERP solution requires profound technical expertise to ensure interoperability between cloud and on-premises ERP infrastructure components.
Top providers of ERP software for logistics businesses
With the multiple ERP options on the market today, choosing an out-of-the-box ERP platform that will suit a company’s needs is rather challenging. It can be reasonable to partner up with a professional ERP consultant to select the optimal technology, thus minimizing TCO and increasing technology ROI. We recommend you start your evaluation process by considering the following systems featured as leaders in Gartner’s Magic Quadrant for Cloud ERP for Service-Centric Enterprises.
Microsoft Dynamics 365 Business Central
Microsoft Dynamics 365 Business Central is a cloud end-to-end business solution capable of automating core business operations.
Key features
- Financial management
- Customer relationship management
- Project management
- Supply chain management
- Human resources management
- Warehouse management
Best for
- Small companies
- Mid-sized companies
Limitations
The implementation vendor ecosystem is too large
A cloud-based ERP suite for various businesses, including transportation and logistics companies, that offers ease of integration, deployment, and administration.
Key features
- Finance management and accounting
- Customer relationship management
- Inventory management
- Order management
- HR management
- Advanced analytics with BI
Best for
Companies of all sizes
Limitations
High costs in the long run
Odoo is an open-source flexible ERP platform that offers extensive customization and integration options.
Key features
- Finance and accounting
- Inventory and warehouse management
- Fleet control
- Procurement management
- Order and contract management
- Document management
- CRM
- HR management
- Ecommerce
Best for
- Small companies
- Medium-sized companies
Limitations
Requires significant technical expertise to set up due to its open-source nature
Acumatica
Acumatica is a cloud-based ERP solution with a special distribution module for managing supply chain and logistics activities.
Key features
- Finance management
- Project management
- CRM
- Inventory management
- Warehouse management
- Order management
Best for
- Small companies
- Mid-sized companies
Limitations
Initial setup and customization require profound IT skills
SAP S4/HANA
SAP S4/HANA is an ERP solution with cloud, on-premise, or hybrid deployment options.
Key features
- Finance management
- CRM
- HR management
- Inventory management
- Integration with SAP Transportation Management
- Integration with SAP Business Network for Logistics management
Best for
Mid-sized companies and enterprises
Limitations
- Complex customization process
- Possible vendor lock-in
Implement ERP for your logistics business with Itransition
Whether you are still considering ERP software or have already decided to implement one, we are ready to assist you. With solid hands-on experience in ERP development and implementation, we rely on our ERP best practices to deliver robust ERP systems that help your business grow.
We help logistics companies plan out ERP implementation or optimize an existing solution to better align it with new business needs and requirements.
- Business needs, workflows, and technology ecosystem analysis
- ERP solution conceptualization, architecture design, and tech stack selection
- ERP implementation/optimization strategy outline
Our team takes on the entire ERP implementation process while ensuring customers maintain project control, enabling logistics companies to streamline operations and accelerate growth.
- ERP architecture design
- ERP development, configuration, or customization
- ERP integration
- QA and testing
- Post-launch support
Looking for a vendor to implement your ERP project?
About Itransition
In software development services since 1999
10+ years of experience in delivering custom and platform-based ERP solutions
50+ successfully implemented ERP projects
An Odoo Silver Partner and Oracle NetSuite Solution Partner
A Microsoft Solution Partner and AWS Advanced Consulting Partner
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