The complex
nature of the shipping and logistics industry combined with the fierce
competition that exists in this sector brings unique challenges to the small
and medium-sized operators. This makes it imperative that freight forwarding
firms, non-vessel operating common carriers (NVOCCs), custom house agents,
international freight brokers, shipping agents and cargo agents streamline
their multifarious business operations to remain competitive. Deploying the
right ERP system dedicated to logistics and freight forwarding can help firms
efficiently realign and scale up their activities whilst being adaptable to the
rapidly changing regulatory environment.
Whilst an
ERP framework can go a long way in helping you integrate diverse business and
operational functions, choosing an ideal freight forwarding software that
allows you to manage, access, and share information coming from and going into
various departments is not easy. Before planning and deploying an ERP system,
it is important that businesses analyse their potential keeping the following
factors in mind:
Integration of all operational and accounting elements within a single platform
The most
important factor to consider is the degree of integration your ERP allows. For
instance, a small and medium-sized freight forwarding agent who uses different
applications to manage functions, including freight management, customs
brokerage, documentation, container tracking, shipment tracking and compliance
services would benefit more if all the applications are integrated into a
single master application based on Tally
ERP 9 platform. This Tally customization
makes the operation more efficient, cost effective and provides the owner with
real-time visibility of in-bound/out-bound shipments and their corresponding
payables/receivables.
Avoiding duplication due to centralization of multi-branch tasks
The second
parameter to consider is to what extent the ERP system allows the
centralization of key multi-branch tasks. Consider each branch of a
multi-location shipping agency using a separate business accounting
application. This will result in disconnected pools of data independent to each
other causing unnecessary delay, disruption and data re-keying whereas the
business owner needs real-time business and operations data monitoring. On the
other hand, if the same agency decides to partner with a Tally services provider
and deploy a centralized Tally software application, it has a greater predictability
of its operations. Since this scenario allows the master application to read,
write and edit data to and fro from each of the branch offices, it helps
business owners track shipment-wise payment, performance, profitability and
outstanding details.
Enhanced financial control and greater visibility
The ERP
system that you choose to implement should provide a greater financial control
by cross-integrating data from operational tasks and data from actual
transactions. The system should allow the owner to calculate the expected
profit per shipment and then compare it to the shipment's actual cost and
profit (using the data from transactions, receivables, payables and brokerage
expenses). This helps the owner to track each job's profitability which in turn
can help them to focus on future shipments/jobs that have a greater
profitability ratio.
Quick information access, report generation, and data archiving
Information
reporting, data archiving and data storage are all important aspects of the
logistics and shipping business. The ERP system should be able to generate and
archive reports, including balance sheets, shipping-related MIS reports,
packing lists, purchase orders and multiple invoices for different chain
partners and quotations. Furthermore, cargo documents, including Cargo Arrival
Advice (CAA), Cargo Arrival Notice (CAN), Delivery Order (DO) and House Bill of
Lading (HBL) should be directly generated from the application. This helps
business owners not only to retrieve but send these documents directly from the
system to the logistical chain partners.
