How Interaction Between ERP and IBP Systems Improves Inventory Forecasting Accuracy
Enterprise resource planning (ERP) systems are the workhorses of operations. They can store and process masses of transactional data – from budgets and invoices to inventory and tracking information – and provide benefits to enterprises at scale. What ERP systems typically lack, however, is predictive inventory forecasting and supply chain management.
Gartner defines ERP as: Enterprise resource planning (ERP) is defined as the ability to deliver an integrated suite of business applications. ERP tools share a common process and data model, covering broad and deep operational end-to-end processes, such as those found in finance, HR, distribution, manufacturing, service and the supply chain.
A true integrated business planning (IBP) system complements the bulky ERP counterpart perfectly. It takes on transactional data and collaborative intel from all functional departments and translates them into key predictions and recommendations using a combination of artificial intelligence, probabilistic forecasting, robust rules engine, and advanced workflows. The planning system should act as a puppeteer for the ERP providing feedback and guidance to support the ERP in its (otherwise obtuse) way of producing end deliverables – like purchase orders. The results reflect strategic inventory forecasting improvements, like ordering the right amount of materials at the right time to meet a spike in regional demand despite numerous supply constraints.
Planning systems allow supply chain teams to look ahead and eliminate future problems rather than fight fires as they arise. With the right planning system, you can plan proactively with an accurate vision of the future. Vanguard Predictive Planning is a cloud-native integrated business planning (IBP) platform powered by probabilistic inventory forecasting. Schedule a demo to see it in action.