ERP Vs SCM: Is SCM Part Of ERP
1 November, 2021 by
ERP Vs SCM: Is SCM Part Of ERP
Ese Nikori

ERP Vs SCM

ERP Software, which is short for Enterprise Resource Planning, has been around for quite a long time now. At its most basic level, ERP Software brings together all of the information from every part of your company in a centralized database. This information can then be analyzed and used to make better business decisions concerning your entire organization.

SCM stands for supply chain management which is a part of ERP. Today ERP and SCM integration has become vital as it leads to a good performance of organizations. ERP covers several business processes including– planning, order placement, accounting, inventory management, customer relationship management and more. 


ERP typically contains capabilities for e-commerce, setting prices, order processing and fulfillment, production management, human resources management, customer relationship management (CRM), SCM and financials.


SCM is one of the most common modules in ERP. It helps companies track materials as they are created, moved through the supply chain and delivered to customers. 


The ultimate goal of SCM is to ensure that all aspects of the company’s operations remain efficient and cost-effective. But to do so, it must be integrated with ERP. So what exactly is SCM and how does it integrate with ERP?

What Is SCM?

SCM is the process of managing operations, information, and people to move goods or services that satisfy requirements for quality, cost, and delivery to the customer at the right time. It is an important module in the overall ERP package.


The SCM module involves the following functions;

1. Requisitioning: The order placement and receipt of material.

2. Scheduling: Identification of appropriate sources and scheduling for disposition.

3. Order Entry: All incoming purchase requisitions; disposition and transfer of materials; and disposition reports.

4. Material Planning: Material requirement setting for production, release of finished goods inventory, lot size determination, identification of sources for replenishment parts, repair materials, or special handling requirements.

5. Material Control: Assessment of physical inventories against both planned requirements and quantities on hand.

6. Shipping: Preparation of shipping documents.

7. Invoicing: Invoicing is the process of sending an invoice or bill to a customer for products or services that were provided.

ERP Vs SCM

ERP VS SCM: How Does ERP Integrate With SCM?

ERP is all-encompassing as it covers the entire business process, while SCM focuses on specific areas. Some key points to note are;

  • SCM is one of the most common modules in ERP. It helps companies track materials as they are created, moved through the supply chain and delivered to customers.

  • Businesses may customize an ERP system to fit what's needed because its applications have better structure.

Put simply, Supply Chain Management is the section in an ERP system that deals with managing how goods and services flow through a company. It generally refers to the coordination and control of production and logistics processes and related information.

Why An ERP System?

Why choose a part when you can get a whole. The idea is to use ERP to organize all core business processes for a company, including supply chain management.

If you are interested in ERP, SCM is a rather large part of it. But the value of an ERP solution is derived from many aspects, not just SCM. 

ERP is the best solution for the small business to run their business smoothly and efficiently, because it can give one complete view of all parts of the company, including production processes, sales activities, warehousing operations, purchasing, financial transactions, customers records etc.

Getting Started With Odoo ERP

Odoo is one of today's most popular software ERP applications. It offers a plethora of features and benefits for all business sizes and industries including SME's, eCommerce, non-profit organizations as well as larger corporations. It is a business application that helps you with inventory management, accounting, customer relationship management, purchasing and production planning, shipping and receiving purchases as well as many other functions. There are many systems that offer similar specific functions as described above, but Odoo is a complete ERP system with specific modules for different tasks.

You can use it to manage your day-to-day activities and turn your paper-based systems into an automated system.

To begin your journey with Odoo, click here to request a demo.

Final Takeaway 

SCM is often a part of ERP, which also contains the other essential elements of a manufacturing process. In some cases, it's all rolled up into one system. In others, the ERP is the backbone on top of which the SCM portion sits.


ERP Vs SCM: Is SCM Part Of ERP
Ese Nikori
1 November, 2021
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