ERP and COVID-19: Gauging the impact of ERP software on COVID-19 disruptions

As a global outbreak, Covid-19 has led to a continuous lockdowns, factory closures, and self-quarantines to name a few impacts. China, as the hub of the supply chain in the world, has accounted for the most extensive lockdown period. This leads to the closure of several industries, such as mobile phones, iron refineries and automobiles. In due course, COVID-19 created adverse effects on stock flow, lead-time operations and created a barrier to existing supply chain management. 

Reasons to boost the existing ERP software: 

• Enabling the technical team to work from home. 
• Uninterrupted production line 
• Controlling shifts in demand 
• Deceleration in logistics 

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​Enabling the technical team to work from home 

With work from home (WFH) becoming the new normal in 2020, businesses across the globe have been converting their office personnel, administrative units, planning and designing teams towards work from home trend with the outbreak of COVID-19. Generally, ERP technicians in many companies need to work onsite by continuously monitoring the stock flow, and lead time. Due to this pandemic, front office teams can remotely access the ERP systems with an improvised cloud platform and operate the business flexibly. So, technicians can develop and access software even from remote areas, which ultimately creates a path for outsourcing employees to work remotely on the existing ERP system. 
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Uninterrupted production line 

Companies are getting used to designate work from home for front office personnel but running the factory floor from home is entirely a new challenge this pandemic has brought on. Some small manufacturing plants have begun to shut down as a result of this outbreak, while many onsite shop floors are still running with minimal operators and material handlers. Here, the utilization of the existing human resource is a severe concern for the manufacturing entities. 
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ERP systems reduce the number of shop floor staff by precisely scheduling work, monitoring equipment for output, checking quality and maintenance issues on a real-time basis without continuous supervision. 
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Controlling shifts in demand 

COVID-19 affected many manufacturers by changing their market patterns to unexpected conditions. Some businesses have seen a decline in demand due to lockdown; several others are witnessing a unexpected surge in demand. The demand fluctuations have shifted the production inertia of many manufacturing companies.
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Companies need to re-examine their raw materials, material scheduling, equipment utility, and assign different personnel at different times. In this outbreak, offshore firms close-down manufacturers' products and components. Much work needs to be performed manually, such as stock-flow planning, rapid demand changes, and lead time management, which can take loads of time. Hence, manufacturing ERP systems helps in re-planning, rescheduling and relocating the stock flow remotely. 
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Deceleration in logistics 

The COVID-19 epidemic has been forcing several countries to shut down air transport for controlling the spread of the virus. This eventually affected the global trade and supply chain. Self-quarantines led to a decrease in air freight capacity limited to available cargo aircraft and ferry passenger flights carrying cargo. Several shipping containers got struck at the ports because of the lockdown too. At the same time, internal trade restrictions due to lockdown delayed the flow of raw materials and industrial goods into ports. Hence, shipping lines have not been working at their full potential, thereby causing the discrepancy between revenue and the operations costs.

The challenges like shortage of human resource at airline terminals, cargo facilities, and inland container depots lead to hinder the scope of supply chain movements. In these circumstances, ERP systems like SAP-SM and SAP-TM are born to play a vital role in devising the steady stream of inland logistics by reducing the operational inadequacy to confront negative revenues. 
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Conclusion: 

The ERP systems have a major role to play in these pandemic times, especially when almost every company has accepted the work from home culture as a norm, with many more opportunities to explore too. As discussed, the outbreak has impacted many sectors with severe losses, which however could be compensated (or even overcompensated) with the right utilization of ERP software. Hence, we can either look at it as an unfortunate tragedy or find ways to make optimum utilization of resources with ERP. So between ERP and COVID-19, let ERP win!

As per 2018 data, the global ERP market evaluated at 35.81 billion dollars with a CAGR of 10.2%. Once this COVID-19 crisis comes to an end (and we all certainly hope it does very soon), all the manufacturing entities need to restore their production at full capacity. This restoration, too, will indeed help the ERP software market to grow and expand the requirement for designing the ERP systems remotely. 

To know more about ERP services offered by H-Town Technologies, click here.