Evolution of the Connected Supply Chain: ERPs lead the charge with smart tech

All eyes are on supply chain performance, disruption and opportunity this year, and enterprise resource planning (ERP) vendors continue to make steady progress in closing the functionality gaps between their supply chain management (SCM) modules and the traditional best-of-breed systems.

These days, ERP vendors are offering deeper integration capabilities with upstream and downstream systems; helping shippers unify data from order management to transportation to warehouse automation; and providing a “single operational view” over fulfillment, logistics and transportation.

This centralized visibility truly is the ERPs’ bread and butter. After all, the makers of these multifaceted systems virtually cut their teeth on data aggregation across previously-siloed departments. They’ve since taken that core strength out into the supply chain and logistics realm, where real-time insights and coordination have become table stakes for companies across all product-centric industries.

Never the type to rest on their laurels, ERP vendors are now using artificial intelligence (AI), machine learning, agentic AI and, more recently, edge computing (processing data closer to where it’s actually generated) to transform static supply chain planning into dynamic, real‑time execution. By running these models at the edge, for example, ERPs support faster, localized decision-making across all key supply chain nodes.

Diving a bit deeper into “edge computing” and how it works, IBM defines it as a distributed computing framework that “brings enterprise applications closer to data sources such as Internet of Things (IoT) devices or local edge servers.” This close proximity to data at its source leads to faster insights, improved response times and better bandwidth availability.

In the SCM realm, edge computing can be used for functions like real-time inventory tracking and quicker equipment diagnostics, for example, and ERPs are well positioned to make those connections and get their users’ data closer to the edge, if you will. “ERP’s integration with edge computing has been quite successful,” says Shashank Mane, vice president, sales and go to market, manufacturing and A&D at Capgemini.

According to Mane, the blend of ERP, SCM and edge helps companies both localize and speed up their decision making. With much supply chain activity taking place in the warehouse, distribution center (DC) or manufacturing plant level, bringing data storage and computations closer to those hubs helps improve response times, saves bandwidth and minimizes the constant back-and-forth with centralized systems.

Edge computing can also accelerate tasks like order fulfillment and routing adjustments, making it a “key step toward building more responsive, autonomous supply chains,” Mane points out. 

A complete picture of the supply chain

As they continue to evolve and carve out a bigger part of the SCM piece, ERPs are also learning how to “play well” with others. Using application programming interfaces (APIs), even systems that lack full SCM functionalities can easily hook into outside applications—best of breed solutions included—that do provide the deeper capabilities that shippers may be seeking.

The benefits are twofold: companies don’t have to rip and replace their ERPs in order to get the latest-and-greatest functionalities; and the ERPs themselves can leverage specialized tools without having to build every single feature from scratch.

“ERPs are integrating both downstream and upstream and using APIs to establish and enhance those various connections,” says Howard Turner, director, supply chain systems at St. Onge Co. In some cases, those connections involve best of breed warehouse management systems (WMS), for example, while others focus on business-specific warehouse automation solutions.

Regardless of which functions the integrated system addresses, the real benefit lies in the data sharing that takes place once the disparate solutions are working from the same data repository. “WMS has traditionally offered visibility within the warehouse, while ERP provides a broader view of inventory,” says Turner. “Bringing that data into a control tower and integrating vendor information helps build a more complete picture of the supply chain.”

Turner also says ERP vendors continue to extend their SCM suites by adding more functionalities to their current offerings plus WMS, transportation management systems (TMS), yard management systems (YMS) as well as other add-ons to their platforms.

This is helping them “get on par” with best of breed systems, Turner adds. “ERPs continue to invest in and build out that functionality in order to provide a single view of a company’s supply chain operations on one platform.”

From static rules to dynamic decision making

As he surveys the ERP landscape and the inroads vendors have made on the SCM front over the last few years, Rishabh Narang, director analyst at Gartner, Inc., sees agentic AI as one of the biggest “developments to watch” over the next year or two.

More specifically, Narang tells shippers to keep an eye on the role that agentic AI—systems that can accomplish a specific goal with limited supervision—will play in both the ERP and SCM applications.

“This year we began to see how these agent-based systems could really augment ERP, WMS, TMS, YMS and other SCM applications,” says Narang, whose own work often involves deep research into the AI space. Based on that research, he feels that the “next big trend to watch out for across the board in SCM is agentic AI.”

For example, when a truck breaks down or a shipment is delayed, an agentic AI could automatically assess available alternatives (e.g., rerouting through another carrier or shifting delivery windows) and initiate rescheduling without the need for manual intervention. Or, if multiple warehouse employees call out sick for the same shift, agentic AI may be able to reassign tasks among the remaining staff, adjust picking schedules and reprioritize orders based on available labor.

Narang expects agentic AI’s impact on the ERP/SCM connection to follow in the footsteps of the cloud, which has become the software delivery model of choice for most vendors and their customers. The main draw? Agentic AI’s ability to “break free” of the static, preset rules that force companies to respond to supply chain events instead of making decisions based on real-time constraints and challenges.

“From the software perspective,” says Narang, “we're going to see a continued shift from ‘static rules’ to more ‘dynamic, real-time decision-making.’”

The unification trend

The future of supply chain management clearly points towards a unified platform approach, where WMS, TMS and other SCM applications communicate via AI- and agent-enabled interactions.

Unified data views across the end-to-end supply chain and holistic operational views will both remain in high demand, and the ERPs are well positioned to do their part in helping companies hit those visibility targets, automate complex processes and make more data-driven decisions.

Narang says that the typical company hasn’t hit its end-to-end supply chain visibility targets yet, but the goal is coming into clearer focus as their systems provide more and more unified data views across multiple, integrated applications.

While ERPs, WMSs, TMSs and order management systems (OMS) may be sharing data “vertically,” Narang notes, getting the “horizontal” end-to-end supply chain data on a unified platform is “still a distant dream at this point.”

As the supply chain landscape continues to evolve, ERPs are clearly playing a pivotal role in the quest for better operational control and responsiveness. Using smart API integrations and cutting-edge technologies like edge computing and agentic AI, ERPs are helping companies eliminate data silos and shift away from reactive responses and over to more proactive, real-time decision-making.

Forging Ahead: Tuffaloy's cloud ERP journey shapes a seamless supply chain

Founded in 1937, Tuffaloy Products was born when president Sean Simmons’ great-grandfather introduced a new line of resistance welding alloys. The Greer, S.C.-based company has since expanded to six sites across the US, Canada, Mexico and Europe. It’s a stocking manufacturer and distributor of standard and custom resistance welding consumables and accessories. 

Like many organizations, Tuffaloy reached a point where its aging technology systems could no longer keep up with the company’s growth. It was using a DOS-based green-screen enterprise resource planning (ERP) system, which wasn’t built to drive growth or communicate with other platforms.

Tuffaloy was also in acquisition mode and in need of a way to bring new organizations onboard quickly and easily. “Our existing system had us boxed in,” says Simmons. Ready for a change, the company began evaluating new ERP options. Its “must have” list included integrations with existing internal and external systems; a cloud platform for remote access; and a solution specifically designed for manufacturing.  

“One vendor required a lot of customization for our made-to-stock and pick-and-pack sites. Another was not a pure plug-and-play cloud solution,” says Simmons. “Epicor was the only provider that met all of our criteria.”

Tuffaloy decided to implement Epicor Kinetic, a cloud-based ERP designed specifically for manufacturers. On the SCM front, the system includes Epicor Kinetic Warehouse (EKW) warehouse management system; a dedicated freight management solution; and transportation management capabilities as part of its SCM suite via integrated solutions.

By leveraging real-time data, Tuffaloy has been able to optimize its supply chain performance. For example, it has increased on-time delivery rates to Canada to 90% (from a previous 65%) and U.S. deliveries to 92% (from 80%). Using the ERP’s application programming interface (API) integrations, Tuffaloy can now connect directly to external applications like FedEx and UPS.

Epicor has also made Tuffaloy’s entire business more metrics driven and transparent. “The result is that employees feel more connected to our mission,” says Simmons. “Automated dashboards at all of our sites project real-time KPIs so each person can see their own impact on the business and how we are performing collectively. It’s very, very powerful.”