What is Supply Chain Management (SCM) in ERP?

Supply Chain Management
Reading Time: 8 minutes

Summary: Supply chain management is a crucial segment of any industry. Monitoring the entire process of the supply chain is intricate and time-consuming. Plus, the methods followed for the supply chain’s efficient function are constantly evolving. The intervention of technology has paved multiple ways for the supply chain network to function with more agility and efficiency. ERP Software has been a supportive tool for the manufacturing industries to work more effectively. Now ERP System has undergone a lot of updation so that business operations can be conducted with more integrity, transparency and accuracy, saving a lot of time.


What is Supply Chain Management (SCM)?

SCM or supply chain management is the process of monitoring the entire supply chain network, from the procurement of raw materials to delivering the finished product to the customer. The main focus of SCM is to ensure maximum quality of the goods, safe and on-time delivery, best customer experience and significant profitability. In addition, the executives must monitor the continuous flow of goods, data and finances to prevent blockage and confusion. The impact of the supply chain’s actions is reflected in the business, whether positive or negative—better supply chain management results in achieving happy customers and ROI.

Examples of Supply Chain Management

Two examples of supply chain management are explained below : 

Generic Supply Chain Management

  1. Sourcing and selection of raw materials.
  2. Raw materials are collected by the logistics provider and given to the supplier(wholesaler).
  3. Later the raw materials are supplied to a manufacturer, wherein it undergoes a manufacturing process and is converted into a finished product that the consumer can use.
  4. The product is then distributed to the wholesaler, who sells it to the retailer.
  5. The retailer sells the product to the customer completing the entire cycle. Again the same process is repeated.


Supply chain for an e-commerce company

  1. The supply chain management of e-commerce is different from the generic module. E-commerce company sell their products using online platforms.
  2. The customer places an order for the product on the website. Then the product order is processed by checkout cart or third party product such as Shopify.
  3. Then the customer uses payment processors like G pay to pay for the product. Then the function of the SCM gets into action.
  4. As soon as the order is placed, the warehouse is notified and prepares the product to be taken by the logistics provider or in-house.
  5. The logistics provider then ships it to the shipping company, who then delivers it to the customer at their doorstep.

Supply Chain Management

Components of Supply Chain Management

Supply chain management functions are based on five major components :

  • Planning 

In supply chain management, planning the entire supply chain process is essential. Plan to execute effective supply strategies to match customer demands. Create a framework to maintain continuous supply and flow of raw materials to meet manufacturing demands. Large manufacturing industries rely on ERP systems to predict future supply chain requirements and plans.

  • Sourcing

Sourcing raw materials for the manufacturing process is a complex task:

  1. The raw materials have to meet the set quality demands.
  2. The price of the raw materials should meet market value.
  3. The supplier should assure a continuous supply of raw materials even during unforeseen events.

Make sure that the vendor supplies the raw materials on time. Especially when sourcing perishable goods, the vendor must be cautious. So, choose a vendor complying with your company’s supply chain needs.

  • Manufacturing

Manufacturing is an integral part of supply chain management. In this process, the raw materials are blended and transformed by using machinery, labour or other forces into a finished product that the consumer can use. But, manufacturing the finished product is not the final step of SCM. The next step is to assemble the product, inspect its quality and features and finally pack it carefully.

  • Delivery and logistics

In this stage, products are finally packed, ready to be shipped and delivered to the customer. A company should have robust logistic capabilities and delivery channels to reflect its brand image. Always plan to have a backup in case of any temporary distribution emergency.

  • Returning

The final part of the supply chain process is receiving product returns. Customers usually return the product if it is found to be defective. If the error is on the company’s part, it reflects the brand’s image. So this return process is called reverse logistics. Companies should be prepared with a plan to collect the product and return the customer’s refund.

However, it must be noted that customer returns are not just interactions between the customer and the company. Customer returns indicate the company inspects the defective, expired and non-conforming goods. Find out how many faulty products have reached the customer. It is the company’s responsibility to recall the product to save brand image.

<<<Also read: What are the main Features of Supply Chain Management?>>>

Challenges of Supply chain Management

1. Cost Hike

Throughout the supply chain management channel, costs have been increased, and profit margins are under sheer pressure. There is a lack of visibility and accountability, which apparently increases operational costs. Also, many factors are responsible for this price hike, including an increase in fuel price and commodity prices and high labor costs from manufacturers and suppliers.

Some complicated international logistics are shifting towards high charges for quick transfer and storage of product management. Also, commodity prices are on a hike due to the increasing cost of raw materials.

2. Complexities due to Multi-Channels

Customers prefer buying products through multiple channels. As the market expands, the supply chain should adapt. Hence, supply chain managers are required to generate variations on functions to address every channel. Also, it has become mandatory for managers to manage multiple supply chains, varied organizations, and third parties. This would ensure a better customer experience irrespective of how customers receive and order products. The rising complexities in the supply chain owing to multiple channels are a significant challenge for the sectors. 

Today, eCommerce websites are selling products to customers directly, requiring local logistics and quick delivery. Also, traditional wholesalers need large storage spaces near metro areas and precise inventory control. This will ensure that the products are available in ample amounts during the supply chain process.

3. Risk Factors in Supply Chain

Environmental fluctuations, economic pressures, international complexities, and trade-related conflicts directly or indirectly pressure the supply chain sector. However, these pressures can turn into risks and issues through networks. And this causes significant problems. 

Today, customers and clients are spread across the globe, which needs keen coordination and management. However, creating additional steps to the supply chain produces high complexities for downstream and upstream members. In terms of compliance, regulations, and quality management requires rigid agreements, controls, and contracts, which is a difficult challenge to overcome. Supply chain management managers are advised to produce contingencies along with mitigation action strategies to eliminate risks and manage them efficiently. 

4. Volatile Nature

Complexities and volatile nature create problems in supply chain management while also affecting the entire infrastructure. Dealing with these issues promptly is one of the tough challenges for managers before developing bottlenecks and more. The increase in the number of internationally sourced goods is causing port congestion. It pressurizes trains, ships, and trucks that require loading, unloading, and more functionalities. 

Some political situations are responsible for making tariffs throughout trade routes. It has resulted in additional fees and increased processing time of customs. Moreover, there has been a shortage of skilled drivers in trucking capacity. Due to the increasing pressure on the drivers, they are finding less lucrative jobs. And hence, logistics are facing difficulty attracting or retaining the right persons.   

5. Accountability & Compliance

Organizations are bound to consider social compliance while doing business across the globe. But, the supply chain sector is currently facing several unethical practices, including child labor practices, low wages, and more. Over time, verifying supply chain management partners to follow the standards has become essential. 

Managing risk-related issues is one of the top concerns for managers. The problems include legal issues and brand damage that causes irreparable damage to businesses affecting profit.

6. Quality Defects & Language Restrictions

Quality defects are pretty hard to manage since there are a lot of differences in accepting the defect stages in different countries. It is necessary to check the quality level and the ratio of acceptable defects in the coming time. 

Also, various countries conduct daily operations in different languages, which is again a challenge in the industry. To resolve these issues, supply chain management businesses should hire professional interpreters having skilled knowledge. This way, the language barriers can be eliminated.

<<<Learn more: Explained: Logistics vs Supply Chain >>>

Sage X3 ERP

Sage X3 ERP for Supply Chain Management is a feature-rich ERP Software solution that adds real essence to the complete supply chain management, including inventory management, material procurement, end-to-end customer product delivery, and more. The enterprise resource planning software has the potential to coordinate and integrate significant flows, including information flows, material flows, and financial flows. Make precise execution, control, planning, and monitoring in the supply chain management with Sage X3

How does Sage X3 combat the challenges mentioned above?

Inventory Management

Easily track and manage the availability of raw materials, spare parts, and stocked goods. Get updated asset management, future inventory, barcode integration, price prediction, and more with this supply chain management feature.

Track logistics and shipping

Coordinate appropriately with transportation channels, enhance customer satisfaction, and improve delivery management with an ERP system.

The logistics and shipping feature of Sage X3 supply chain management software helps with storage optimization, labor management, labouring, and much more functions.

Precise forecasting

With the specific forecasting feature of this supply chain management software, you can easily predict customer demands while planning the procurement and production processes accurately.

Eradicates the need to buy unnecessary raw materials or to store additional finished products in warehouses. This way, it reduces the overall cost of management.

Real-Time KPI

Sage X3 offers team members instant and latest updates on customer orders, inventory levels, and additional key factors. It aids businesses in tracking and monitoring supply chain problems which would help make quick decisions.

Moreover, by integrating ERP in supply chain management, Sage X3 supply chain management software would offer you the ability to analyse real-time KPIs. This helps check opportunities and concerns to make respective process adjustments and improve results.

Full Automation

Sage X3 enterprise resource planning software offers high-tech automation with which your supply chain business can save a lot of time. Your team can work more efficaciously by automating data inputs and other business functions while dedicating more to the most crucial tasks of the supply chain business.

With the highly integrated supply chain management SCM software solution, your business can make software needs simplified while minimizing human errors.

How does Supply Chain Management Software increase productivity?

In addition to effective planning, forecasting, and simple collaboration, an ERP is a boon in boosting supply chain efficiency in business disruption. We know that market disruptor are tough to compete in every industry, and if one hits your business, you should be able to get these changes quickly to complete the job.

Critical issues such as pandemics have shown how essential it is to have proper responsiveness and preparation to stay abreast of the competition. Today, businesses have been focusing on supply chain adaptability, speed, and risk management while not considering cost savings as a significant factor. Their goal has been to respond to customers’ requirements through flexible sourcing or connected supply chain networks. 

Sage X3

Sage Software Solutions is a leading IT company with an array of advanced ERP software solutions. Our proprietary products — Sage X3 and Sage 300 will help you cut your operational expenses, improve business productivity, increase operational efficiency, forge robust customer relationships, and strengthen association with vendors, suppliers, and distributors. So, if you are looking to reinforce your business fundamentals and emerge as an industry leader, then please schedule a call with one of our sales representatives.

ERP Sales Modules and its 8 Powerful Features

ERP sales modules
Reading Time: 5 minutes

Summary- Today, with the rising competition in the market, organizations have been focusing on deploying ERP to attain success and desirable profits. However, it has become essential to understand various ERP sales modules and deploy them to carry out respective business operations. So, let us see the 8 core features of ERP sales modules you should consider. 

ERP sales modules

ERP sales modules is one of the most essential elements of a business since it helps handle all business activities for export/ domestic sales of an organization. The customer, as well as product databases, are stored and well-maintained in the ERP sales modules. However, the ERP sales modules also involves a few steps including sales and marketing, order placement, dispatching, getting inquiries, and order scheduling. 

Let us learn about the 8 important core features of ERP sales module in this post. 

1. User Database 

Usually, the account name with which your business is associated is classified as ERP prospect, suspect, or customer. However, the users can easily be grouped within the ERP database in order to create a baseline. On the other hand, advanced delivery tools would encompass tools such as prospecting tools, connected customers, and sales pipelines. 

2. Quotations 

The basic structure of quotes in the case of ERP sales modules is quite similar as per the order. While there has been no agreement to deliver. However, quotes usually get a closure date once the quote is not valid. After the completion of the negotiation period, the ERP sales module would help convert a quote into an order. 

3. Credit Limitations 

Whenever orders are to be delivered prior to payment, a company can set a credit limit for every customer. However, this would call for an alert in the ERP system whenever orders are exhausted. The system limit can call for shipments to be conducted till payment is received for those orders that are shipped and are yet to be paid. 

<<Also Read: Add-on modules in ERP Software and their benefits>>

4. Multi-layered sales order 

It is another important sales module. When an order is taken, there is some product description mentioned along with the sales amount. However, these description lines can be divided into releases where a small piece of description may have various delivery dates along with different quantities. Also, a sales order might have a request date wherever the customer would need that product. 

An ERP system can also aid multi-layered configuration while setting up correctly. However, the approved date can also be set in ERP like a shipping/ delivered date along with the transmitting process. 

ERP sales modules

5. Forecasting sales 

The sales prediction is another aspect of the sales module. It includes expected future sales by the consumer. A lot of ERP systems involve a number of statistical models to showcase the future from previous sales patterns. However, these models should project future sales as per the previous past patterns. These predictions are made based on the order history, growth projections of customers, supply chain type, and more. Also, forecasts are implemented to forecast order demands required to schedule future capacity or even component purchases. 

6. Backlog 

An ERP software should offer a database that will be query-able regarding all open orders. This is all sequenced by the due timings. Additionally, those orders to be executed in the next month might not have any systematic or immediate plan and this is exactly where the quality, as well as production control models, comes to the scene. 

7. Sales region 

It is an important element of ERP sales modules. An ERP software can offer geographic or even similar sales breakages through a salesperson. Also, every person who is selling will take a specific territory in the system. The person will be solely responsible for bookings, orders, as well as, backlog in that particular region. 

Even if you do not have at all a sales-driven business, fetching knowledge of the tremendous efficiencies connected with ERP sales modules can give an immense impact on the ROI system. 

8. Return Material Authorization

While choosing an ERP software, you should also look if it offers RMA i.e. return material authorization. Whenever a customer demands to return a particular shipment, they will be asked for authorization which is typical for negative orders. 

The Topmost Benefits of ERP Sales Modules

  1. Database organization- The sales modules help fetch comprehensive details of your customers while also offering sales, marketing, and customer service data in an organized manner. Moreover, it offers you real-time data as well as accurate decision-making power.
  2. Error-free sales forecast- The modules can record data efficiently with important factors to consider. The crucial real-time data aids the sales section to perform accurate sales forecasts.
  3. Sales process layout- It helps build a sales team to see all required information at a single place. This will help salespersons track, monitor, and manage all sales function stages according to the status.
  4. Improves performance- ERP sales modules can update data, can schedule work, and can easily follow up on notifications regarding the sales process. This way, sales representatives can focus more on making more sales while enhancing the business performance.
  5. Enhanced internal cooperation- The ERP sales module helps salespeople work together flawlessly. It collects data on every work and shows it in a presentable way. This makes it even easier for everyone to work together. Moreover, the modules help fetch data quite easily while also aiding in decreasing the time required by skipping unnecessary meetings and collaboration.

ERP sales modules

ERP Sales Module Process

Now., let us see more about the ERP sales module process and how it works. 

  1. At first, the customer starts an RFP (Request for a proposal). 
  2. Then, after receiving the proposal, the sales team reviews it thoroughly. 
  3. During the review process, the sales team sees whether they can offer a proposal to meet customer needs.
  4. If the requirements are matched, the ERP sales modules team develops a proposal and then sent it to the customer. 
  5. Now, the customer would examine the proposal and would decide to move forward or not. 
  6. With the approval of the customer, the sales team would develop the respective contract and can send it to the customer.
  7. Again, the customer would review the contract and can decide to move ahead or not. 
  8. On the approval, the customer can start an RPF (Request for a proposal). 

<<Also Read: ERP Reporting: 7 Features to Consider for Your System>>

Down the Line 

Here, we have seen the core 8 features of the ERP system sales module and how they are benefitting the businesses. An ERP system implementation, as well as its purchase, might be an exciting task at the beginning. But, choosing the right ERP system for your business can make the foundations work well and help you grow your business with the passing time. The best ERP sales modules for your company can meet the requirements while helping you confront the prominent challenges as well as opportunities to showcase growth. 


Explained: Logistics vs Supply Chain

Logistics vs Supply Chain
Reading Time: 5 minutes

Summary- Supply chain management involves sourcing, manufacturing, processing, and delivering products/ goods to the customers. On the other hand, logistics means moving and storing the products/goods in various supply chain businesses. Let us learn what logistics vs Supply chain is in this blog post.

Logistics vs Supply Chain

Logistics and supply chain management possess several similarities, but there exist some significant differences that make them distinctive. Understanding their roles can help companies build operational improvements, develop competitive benefits, and improve customer services on a large scale. 

In this post, let us dig into detail about logistics vs supply chain and find the difference between logistics and supply chain. 

Also Read: <<10 Interesting Questions Related to Supply Chain Management>>

What is Supply Chain Logistics?

Supply chain logistics precisely track the shipping and storage of services and goods throughout the supply chain. The process initiates with raw materials, proceeds with the manufacturing and distribution, and ends with the successful delivery of the product/service to the customers. 

Salient points to consider:

  • Supply chain management revolves around competitive benefits. 
  • Supply chain management brings the accurate coordination and movements of the supply chains of an organization.
  • It is the modernized method of delivering goods/services to all types of end customers.
  • It is an extensive term that correlates the connection between the distributors/suppliers and high-end customers.
  • Supply chain management SCM is a series of internally connected activities such as moving raw materials to finished goods until it is delivered to the end-user
  • If executed properly, Supply chain management and logistics both can offer incredibly competitive benefits to the companies. 

What is Supply Chain Management?

It embraces the activities to create final goods from raw materials and then deliver them to the consumers. 

If you want to refine and optimize supply chain management in your business continuously, it is critical to have visibility throughout the supply chain. This would help organizations track every movement of services and goods through every stage of the supply chain. It makes it simple to follow whether everything is running as per the plans. Moreover, if there are any disruptions or obstacles midway through these operations, then SCM allows decision-makers to take enough time to reply back. 

Also Read: <<What is the correlation between Supply Chain Management Software & ERP Solution?>>

What are Logistics? 

Logistics embraces executing and planning the storage and shifting of goods between various points in the supply chain. It also includes coordinating people, facilities, and other resources to ensure that the products are moving and there is enough required space for them to store at the next centre. What more falls under the term logistics include transport, fleet management, material handling, demand planning, and order fulfilment. 

Logistics vs Supply Chain

Logistics vs Supply Chain In Short 

SCM is nothing but a high-standard process that involves sourcing and purchasing raw materials and then generating completely finished goods. It leverages logistics to execute the delivery of goods to the customers. It also emphasizes developing supply chain functions that can benefit not only the business partners but also the customers. 

Supply chain management SCM helps set routine logistics activities in warehouses, factories, local shipping stores, etc. 

On the other hand, logistics is one facet of the supply chain that delivers and stores final goods/products to the customer irrespective of manufacturer, consumer, and distributor. Its prime aim is to deliver goods/products on time to consumers at an affordable price. 

Also Read: <<The 4-Step Approach to Better Supply Chain Management>>

Why is Logistics so crucial for Supply chain management? 

In supply chain management, logistics looks after the proper movement and storage of services/goods, documents, and reports that files every activity across the product journey to the customer. Logistics include different transportation methods that take inventory from one level to another level. It is one of the aspects that check out where the goods can be stored and what strategies are required for efficacious supply chain management of the business. 

Logistics vs Supply Chain
What are the critical differences between logistics and supply chain management? 

Learning logistics vs supply chain is essential for businesses. So, let us have a quick look at some prime aspects of logistics that support the supply chain at its best-

  • Delivering the right goods/products at the appropriate time 
  • Retaining consumers and adding value to loyalty
  • Offering unique value for businesses
  • The decreasing cost and increasing efficiency of the process
  • Providing a proper means to deliver goods from the most feasible location for manufacturing to the consumer’s location

Supply chain management and logistics focus primarily on good product flow from the starting to end. However, these concepts need precise coordination of labour, facilities, and supply so that products move in the appropriate place and time. 

Also Read: << Top inventory management techniques SMEs must follow>>

Let’s see the significant difference between logistics and supply chain management i.e. logistics vs supply chain now.

Logistics is one of the factors of SCM. SCM includes various activities such as inventory planning, production planning, facilities & material management, labour planning, delivery of goods/services, and manufacturing.

Logistics v/s Supply Chain
One of the best points to consider about logistics vs supply chain is that logistics focus more on accomplishing customer demands and needs. While SCM functions toward enhancing processes to generate more significant benefits for the businesses.

Logistics emphasize cost-efficient product delivery to the customers, while supply chain management manipulates the overall development of raw materials in final products. These products are sent from the supplier to the manufacturer, to the warehouse, and finally to the consumers/ retailers. 

Also Read: <<Top 6 Ways to Tackle Supply Chain Complexities>>

Logistics term was introduced with the military long back when Alexander the Great was born in 356 B.C. He was considered as a logistics master. On the other hand, the advanced practice of SCM was initiated in the 20th century. He was logistician Keith Oliver who introduced the concept of supply chain management in the 1980s. 

Procurement meaning and process explained

Procurement meaning and process
Reading Time: 5 minutes

Summary: Procurement constitutes the transactional part of the business. It involves buying raw materials from vendors & suppliers at the most affordable rates. Although the techniques and methods of procurement have drastically changed over the years, the general principle remains the same i.e. getting essential supplies at the cheapest rates and on time. Therefore, qualified professionals need to monitor each component of the procurement process as it directly impacts a business’s bottom line.

Procurement quote

What is Procurement?

Generally speaking, procurement is a collection of multiple processes and activities allowing businesses to acquire the best quality raw materials at competitive prices and within the stipulated deadline. 

However, different companies define procurement differently. 

For example, for company A, procurement might mean determining business needs, identifying suppliers, generating & tracking receipts of goods, and redefining, updating, and negotiating payment terms based on the inputs collected from involved parties.

On the other hand, company B might have a narrower view of procurement, including only the generation of purchase orders and making the final payment.

Why is Procurement critical to your business?

A well-managed procurement process helps identify reliable vendors and suppliers. A reliable vendor ensures you get essential supplies at the most competitive rates and within the specified date and time. 

Many companies waste significant time, resources, and money dealing with inefficient suppliers. As a result, they get substandard materials. 

Another challenge is that many suppliers either don’t keep records or use traditional methods like pen and paper. They don’t use automated solutions like ERP systems to maintain and update records which wastes significant time and leads to human-induced errors. 

A well-managed procurement process solves the following challenges:

  • Helps identify reliable vendors and suppliers.
  • Reduce the cost of purchase of raw materials.
  • Ensures materials are delivered on time.
  • Maintains procurement records safely in ERP software.

<<<Also Read: Difference between Procurement and Purchasing>>>

Types of Procurement

Procurement can be categorized as direct and indirect based on how the company will use the items after procuring them. 

  •  Direct Procurement

It refers to procuring raw materials required to manufacture an end product. For example, a tyre manufacturer would procure rubber for producing tyres. Or a retailer would procure sugar from a wholesaler to further sell it to customers.

  • Indirect Procurement

It includes materials that don’t directly contribute to the company’s bottom line but play a significant role in executing day-to-day business operations. Examples include office supplies such as furniture, equipment maintenance, after-sales service, and running ads on social media.

Procurement can also be classified as goods and services based on the type of items being procured.

  • Goods procurement

It refers to procuring physical items & equipment but can also include digital products like software subscriptions. An efficient supply chain plays an important role, without which you might get low-quality products and experience a delay in receiving goods. Most importantly, both direct and indirect procurement form a crucial part of goods procurement.

  • Services procurement

This category includes people-based services. It differs from company to company, but it generally consists of:

a. After-sales executives

b. On-site laborers

c. Individual contractors

d. On-site security services

Both direct and indirect procurement form a critical part of services procurement.

Procurement statistic

9 critical parts of the procurement process

Although the procurement process greatly varies from one company to another, it consists of all or some of the points mentioned below:

1. Identifying products and services critical to a business

Initially, a company should identify the products and services it requires based on its needs and requirements. For example, it might include a brand new product that the company hasn’t previously purchased, restocking supplies of existing products, or renewing a service.

Here’s what you must take care of:

  • Type of material/service
  • The exact quantity of products
  • Precise technical specifications of products 
  • Service characteristics
  • Part numbers

It’s best to consult all business departments before making the final purchase, ensuring the procured item fulfills the needs of each department.

2. Submit a purchase request

Making a formal purchase request, also known as purchase requisition, makes sense if you want to purchase a large number of items or services in one go.

Usually, the procurement department manager creates a purchase request listing down the department’s needs and the technical specifications of the product specified. It includes:

  • Price format
  • Time duration
  • Quantity required
  • Size/dimensions
  • Installation
  • Performance
  • Supplier experience

The purchase request is finally sent to the finance & accounting department, which decides to approve or deny it. 

If approved, the procurement team can start the vendor selection process. If denied, both teams can sit together to identify & eliminate unrequired expenses and only pay for items critical to the department’s functioning.

3. Identify and select the best vendor

After the finance & accounting department approves the purchase request, it’s time to identify the best vendor and submit a Request for Quote (RFQ). 

The procurement team sends the RFQ to potential suppliers to receive a quote. And therefore, the RFQ should provide a detailed description of your business needs to the vendors. 

Here’s what you should focus on during the vendor assessment process:

  • Quality, Cost, and Delivery (QCD)
  • Total Quality Performance (TQP)
  • Regulatory compliance risk
  • Financial Stability
  • Past industry experience
  • Service quality
  • Delivery time
  • Cyber risk

Today, many retailers take pride in implementing eco-friendly policies. Therefore, it would be best if you tie up with a supplier that stands with environmental sustainability issues. This way, you can strengthen your corporate identity and build a brand in the market.

<<<Also Read: Top 10 ERP Vendor Evaluation & Selection Criteria>>>

4. Working out the price and terms

The industry practice is to get at least 3 quotes from suppliers before reaching the final decision. You should critically analyze each quote and identify clauses where you can negotiate to get a better deal. If you aren’t satisfied with the procurement terms, have several alternate suppliers before calling it quits. And if you agree to go ahead with the supplier, ensure that you create a written document mentioning all terms and clauses.

5. Generate a purchase order

Create and fill a Purchase Order (PO) and forward it to the supplier. Ensure that the PO contains all details regarding the goods and services you need and the stipulated time within which the supplier should fulfill the order. 

6. Examine the received goods

Once you receive the deliveries in your warehouse, check for any discrepancies, damage, or errors. Ensure that you have received each item mentioned in the PO and also check their quality — substandard, average, or excellent.  

7. Perform three-way matching

To avoid discrepancies or errors, the accounts payable team should perform three-way matching, which includes comparing the order receipt (packing list), purchase order, and invoice. The primary objective of this step is to ensure you don’t pay for inaccurate or unauthorized invoices. 

8. Make the final payment

If there are no discrepancies in the three-way matching process and everything is accurate, you should pay the invoice. An error-free account payable process helps verify that any payments you make match the invoice. This process ensures that payments are always made on time, helping build robust and long-lasting supplier relationships and preventing late fees.

 9. Record keeping

Storing and maintaining records for the entire procurement process, from identifying essential materials and generating purchase orders to creating RFQ and paying invoices, is beneficial for multiple reasons.

They help:

  • Reordering goods at competitive prices in the future.
  • Calculate taxes
  • Assist in the auditing process
  • Resolve potential issues that might arise in the future

ERP for supply chain


What is Financial Management ?

financial management
Reading Time: 6 minutes

Summary: Financial management comprises methods and techniques for handling a company’s financial assets. It helps the business track its expenses & profits and, more importantly, allows it to adhere to government rules and regulations. It often requires brainstorming effective financial strategies & high-level plans and sticking with them for a sustained period.

financial management quotes

What is financial management?

At its very basic, financial management is about brainstorming and implementing a financial plan and ensuring that each department sticks to it for the pre-decided time frame. An error-less financial plan allows key stakeholders to:

  • Make solid strategies based on factual facts, figures, and market realities.
  • Make investments in financially-sound start-ups.
  • Evaluate a company’s financial performance based on metrics such as price-earnings (P/E), Capital ratio, Return on equity (ROE), etc.

Financial management ERP software allows companies to get a comprehensive picture of their financial performance through a single window. In addition, they can quickly learn about multiple financial functions, including revenue recognition, accounting, payment processing, and fixed-asset management that facilitate the smooth functioning of a business. 

In short, a financial management system provides real-time status of a company’s finances and helps carry out day-to-day operations like period-end closing. 


Why is Financial management crucial for your business?

The three essential pillars of financial management are:

1. Strategizing

Companies need to identify their short and long-term financial goals. Moreover, the senior management requires access to valuable insights for scenario planning. 

2. Decision-making

Decision-makers make high-level decisions based on factual reports and relevant KPIs.

3. Controlling

Business leaders must ensure that each department is aligned with the strategy and operating within the set budget.

Effective financial management allows the workforce to understand the company’s financial performance and its long-term vision, mission, and values. 

financial management

What are the objectives of financial management?

Based on the pillars mentioned above, financial managers help companies achieve the following objectives of financial management:

  1. Complying with state, central, and industry-specific regulations.
  2. Tracking cash flow to ensure the organization has enough funds to fulfill its financial obligations.
  3. Maximizing profits by offering valuable insights on, for example, rising transportation costs that might increase the cost of finished goods.
  4. Developing multiple financial scenarios based on the changing market conditions, customer preferences, and the business’s current financial state.
<<<Also Read: The Objective of Financial Management>>>

What is the scope of financial management?

Financial management comprises four crucial areas:

1. Budgeting

The financial manager assigns available funds to meet operational expenses, including employee salaries and T&E, rents, mortgages, raw material costs, and transportation costs. They also need to set aside some money to explore new market opportunities and deal with emergencies.

Budgets are of two types — Static and flexible.

Static Budget Flexible Budget
Remains constant even if there are substantial changes in the assumptions made during the planning phase. Adjusts if the assumptions made during the planning phase change.

Analyzing and managing risk

Business executives depend on financial managers to understand various business risks and how to control them. The following points tell how:

1. Credit risk

If customers fail to pay on time, the business might face difficulties running its day-to-day operations. It will not have enough cash to meet its financial obligations, adversely impacting its creditworthiness and significantly reducing its ability to take loans at favorable rates. 

2. Operational risk

Examples of operational risk include the probability of a machine breaking down and signing a periodic machine maintenance contract with a vendor. It also includes planning and investing for:

  • Disaster recovery 
  • Crisis management
  • Business continuity

3. Market risk

Depicts the amount of risk that exists in a particular industry. For example, the impact of the COVID-19 pandemic on the hospitality industry. 

4. Liquidity risk

The financial management team has to track a company’s cash flow in real-time to identify the weak spots where most of the money flows out without generating any ROI. It also involves determining future cash needs and freeing up working capital for uncalled expenses.

<<<Also Read: The Scope of Financial Management>>>

What procedures does the financial manager follow? 

The financial manager creates a list of procedures that guide the financial management team in generating and distributing financial data, including payments, invoices, and reports, accurately while ensuring security at all times.

These procedures also define each stakeholder’s responsibility and determine the ultimate signatory authority. 

A set of procedures offers companies a tried and tested way of doing things faster and more efficiently. They don’t have to start everything from scratch. Instead, they can align their strategies with the rules and regulations mentioned in the procedures and expedite the process.  

Sage X3 for financial management

What is the role of a financial manager?

A financial manager manages the functioning of a company’s financial department. The list below provides their daily work routine:

1. Creating a capital structure

One of the crucial tasks of the financial management team is to generate a capital structure after estimating the amount of capital. This process involves short and long-term debt-equity analysis. The capital structure is based on the amount of capital the company owns and the amount to be raised from external stakeholders.

2. Assigning profits

If a company makes significant profits in a financial year, the financial manager must assign them for:

  • Contingency measures
  • Purchasing machines
  • Expanding to new markets
  • Investing in research and development
  • Product innovation
  • Paying dividends to shareholders

3. Financial control

Organizing & obtaining funds from multiple sources and controlling expenses constitute the most important tasks of a financial manager. They can use ratio analysis, cost control, risk management, profit management, and financial forecasting methods to manage their finances well.

financial management quotes

4. Estimating the required capital 

A crucial task of financial management is to estimate the amount of capital required by the company to manage its day-to-day operations. This step involves estimating the amount needed for purchasing and maintaining machines. A financial manager has to ensure that estimates are done in a way that eventually helps the company make profits. 

5. Judicious capital investments

A financial manager has to make intelligent investment decisions. Therefore, finding promising start-ups and identifying excellent investment opportunities is one of the essential functions of the financial management team. 

6. Managing money appropriately

Efficient administration of money allows the financial management to distribute salaries, meet financial obligations, pay taxes, maintain appropriate stocks in the warehouse, and purchase materials and equipment necessary for the proper functioning of the manufacturing facility.

An illustrative example of financial management

Consider the following example. A perfume manufacturer wants to release a new perfume in the market. The CEO calls a meeting to decide the total cost of manufacturing a thousand bottles. After the meeting, he asks the finance manager to determine where the funds will be obtained from, for example, external investors, bank loans, commercial mortgages, etc.

Then, the finance manager contacts several stakeholders to ask for funds. After receiving the funds, he ensures those funds are allocated to each department in the organization cost-effectively based on their needs.

After a month, when the sales data is revealed, the finance manager decides whether to invest the money in:

  • Manufacturing more perfume bottles of the same type.
  • Start a new line of perfume to cater to a different target segment.
  • Distribute extra cash to the stakeholders in the form of dividends.

While the whole manufacturing process is going on, the finance manager also needs to ensure that the workers are being paid on time. Further, creating and analyzing real-time finance reports is also crucial to determine whether the company is making the same amount of profits as was initially planned during the brainstorming sessions.

financial management


Subscribe To Our Newsletter

  • This field is for validation purposes and should be left unchanged.

At Sage Software Solutions (P) Ltd., we are home to world-class ERP software and CRM software that will solidify your business tech support fundamentals and enable you to build a customer-centric organization. You can also write to us at sales@sagesoftware.co.in.

Disclaimer: All the information, views, and opinions expressed in this blog are those of the authors and their respective web sources and in no way reflect the principles, views, or objectives of Sage Software Solutions (P) Ltd.

The Scope of Financial Management

Scope of Financial Management
Reading Time: 5 minutes

Summary- Finance management plays a vital role in all kinds of businesses and it is the backbone of any organization. Various factors, including profit or loss, are closely related to financial management. Let us discuss the scope of financial management in this post. 

Scope of Financial Management

Let us first learn what financial management is?

Financial management is all about organizing, directing, strategic planning, and manipulating financial rules in a company. It also embraces deploying management principles to the economic features of an organization. It is a pivotal part and is considered the backbone of all businesses. Financial management has the modern approach that makes sure that required funds are always available from different sources in organizations while also helping organizations to earn high ROI.

In this post, we will discuss the scope of financial management in detail.

So, the prime scopes of financial management include:

  1. Investment decision
  2. Working capital decision
  3. Dividend decision
  4. Assures liquidity
  5. Profit management
  6. Financing decision

Let us discuss each of the scope of financial management in detail.

Investment decision

The primary objectives of financial management are thoroughly involved in managing a company’s investment decisions. This includes determining and measuring the capital cost, predicting the benefits of a specific project, evaluating risks, and more. It is the topmost scope of financial management. Here, the economic managers/ executives discuss and decide how much funds should be invested into the company’s current or fixed assets to gain the highest returns. 

Scope of Financial Management

The two main factors of investment decisions are liquidity and capital budgeting. Capital budgeting is related to capital allocation and switching funds in permanent assets that could give greater returns in the near future. It is a crucial decision to be taken since the company’s long-term success depends on that. But, it is also a very tough task to execute since it involves cost benefits and estimations, which are pretty uncertain. 

<<Also Read: The Objective of Financial Management>>

Working capital decision 

Making informed and working capital decision is another essential scope of financial management. However, these decisions are related to the company’s investment in current assets or liabilities. This type of decision includes short-term and working capital financing. The existing assets include receivables, inventories, short-term securities, cash, etc. On the other hand, current liabilities include overdrafts, bills, creditors, and payable. 

<< Also Read: Financial Management: The Ultimate Guide (2022)>>

Dividend decision 

Making dividend decisions is a significant scope of financial management which is all about taking all dividend decisions of the organization. These decisions include building an appropriate dividend policy as per the retaining and distribution of company success/ profits. To carry out this process, the financial manager/ senior finance executive should decide on a maximum dividend payout ratio from the available gain of the business. 

Assures liquidity 

Maintaining proper liquidity of the business is a significant scope of financial management that makes sure that the supply of funds to the organization is regular. Here, the finance manager assures and tracks cash inflows and outflows while also avoiding situations like overflow and underflow of cash. This way, businesses can track the optimum level of liquidity.

Profit management 

The most critical scope of financial management is profit management since its primary aim is to profit the organization. This scope of financial management works to lower the cost of different activities via appropriate tracking. Also, it helps set a reasonable price policy in a single shot. Here, the financial manager tracks and measures the cost of capital while choosing inexpensive sources of capital. It is done by checking the different available resources. 

<< Also Read: Top 3 key features of ERP financial management systems>>

 Financing decision

This scope of financial management means deciding how and when the required funds should be made available from the current short/long term sources. The finance manager should develop an appropriate capital structure for the organization or even a finance mix to increase its value. To follow this cope properly, the finance manager should maintain a better balance between the debt and equity in order to offer high returns to the customers. 

One thing to remember is that the utilization of debt and leveraging the company’s finance impacts both the risk and returns to the equity customers. When the risk and return are accurately matched-up, the market values for every share are increased. Scope of Financial Management

Hence, the finance team should always decide the perfect time to raise funds while ensuring all securities.

Why is financial management critical? 

  • It helps companies in acquiring funds and doing better financial planning. 
  • Helps businesses efficiently use and assign received funds 
  • Improves the organization’s value 
  • Offers economic stability 
  • Aids businesses in making quick and crucial financial decisions

Scope of Financial Management

The Nature of Financial Management

Undoubtedly, financial management is any business’s natural and most needed function. It is highly needed to get the required physical resources and streamline production functions. Let us now see the nature of financial management through different definitions. 


  1. Finance is the foundation pillar of all economic activities of the organization. In any organization, the person who manages and controls all company finance is the finance manager. 
  2. The nature and scope of financial management should be studied in detail to avoid any finance-related losses. Financial management is responsible for the company’s overall growth, success, and risk-prone nature.
  3. Finance management is one of the best forms of education which got realized across the globe.  Many people have made their careers in financial management considering the dire need for businesses to grow. 
  4. Financial management is not an individual entity. Hence, an operational manager or a functional manager must take this responsibility to manage finance. 
  5. Multi-discipline is one of the natures of financial management. It totally depends upon different factors, including inflation, economy, accounting, banking, and much more. Considering these factors results in the appropriate use of business functions and finances as well. 
  6. Financial management has such a nature that not only relates to business functioning but also acts as the backbone of the economic, industrial, and commerce background. 


scope of financial management


Down the line 

For enhanced experience and profits, businesses must ensure that the modern approach to financial management closely deals with the fund’s availability, management, and allocation. Also, it should ensure where and how these funds should be invested, monitoring and planning the estimated ROI, working capital, and more. If an effective financial management plan is deployed in an organization, its profit and growth are certain. 


Subscribe To Our Newsletter

  • This field is for validation purposes and should be left unchanged.

At Sage Software Solutions (P) Ltd., we are home to world-class ERP software and CRM software that will solidify your business tech support fundamentals and enable you to build a customer-centric organization. You can also write to us at sales@sagesoftware.co.in.

Disclaimer: All the information, views, and opinions expressed in this blog are those of the authors and their respective web sources and in no way reflect the principles, views, or objectives of Sage Software Solutions (P) Ltd.

Top 6 Ways to Tackle Supply Chain Complexities

Supply Chain Complexities
Reading Time: 4 minutes

Summary: Supply chain complexities are the most difficult to handle. Companies have been looking for effective ways to tackle supply chain complexities. Let us see some brilliant ways that can help you develop flawless supply chain management.

Supply Chain Complexities

Today, supply chain complexities are spread widely and are affecting several industries hugely. In the case of small businesses, it has become too difficult to keep the most popular products in stock and to deal with impulsive customers. 

Let us learn a few efficacious ways in this post that can help you manage supply chain complexities with utmost preciseness. 

Constantly track your stocks

During the toughest times, it is crucial to track the inventory of your business.  If frequent supply chain shortages have been occurring, then in this case it becomes quintessential to track what stock do you have inside and which stock needs to be replenished. Tracking is more important because it helps get a view of the most popular items that are running out.

Moreover, you can also leverage buffer capacity in order to enhance resilience. Though buffers are quite expensive, you can still think of getting them. Several companies have been using buffers in terms of surge capacity for every new service/product launched.

Supply Chain Complexities

Enhance your inventory as & when possible 

If you are having limited resources, then it won’t be always possible for you to invest in lots of inventory. In terms of budgetary concerns, you should consider time, the amount of physical space, and labor. There are several ways in which you can easily upgrade and increase your inventory. 

Let us see some of them. 

  • Depending upon the popularity of the items, start buying them as much as possible as per your set budgets
  • You can look upon discounted items to stock up on items in your inventory 
  • Look for sponsorships in order to invest in the right inventory 
  • Focus on expanding your warehouse space
  • Make use of outsourcing solutions for shipping, or packaging purposes. 

<< Also Read: What is the correlation between Supply Chain Management Software & ERP Solution? >>

Get some better alternatives 

In the case of an uncertain supply chain, you might not know when a particular item would become unavailable and especially at very short notice. Hence, it is highly recommended by the industry experts to stay proactive and look for better alternatives. Think of some alternative suppliers that belong to various locations and that can solve some supply chain complexities.

In this way, you can always stock up on things well before time even if your supplier could not fulfill your needs in a rare case. Focus more on offering creative alternatives to your customers.

Supply Chain Complexities

Use the most advanced tools 

Utilizing the latest automation tools would be the best way to stay abreast of the competition and also to manage the supply chain efficiently. At present, supply chain management ERP software is widely sued by businesses that deal with varied departments, domains, as well as, locations.

In the case when supply chain issues are very common, even small businesses can get benefit from SCM software. Through the software, tracking inventory, updating the items as well as managing the shipping becomes quite simple and easy. 

<< Also Read: 10 Supply Chain Tips to Effectively Manage a Product Recall>>

Stay loyal to your customer base 

Today, supply chain issues are constantly getting quite pressurized. That is why people are also keenly aware of the fact that few products/services might be unavailable for some time. At this point, you should always prefer being loyal and honest with your customers.

You can either contact your customers via email or phone or even can showcase the same on your website that a few products are unavailable and might get back in stock in some days. Stay transparent with customers so that there will be higher chances of customer retention.

supply chain complexities


Stay totally updated

Supply chain disturbances might occur at any time in a day and in most cases, these situations are predictable. Though, the situation might be very different depending on the industry type and location. Remember that supply chains can get affected badly due to changing climate, economical conditions, and politics as well. Hence, you should always stay updated with the latest news related to your industry. 

If your supply chain is undergoing a shortage, you must make some effective steps to find better stocks alternatives. It is so obvious that you cannot predict future supply chain disruptions but definitely you can prevent some issues by staying rigorously updated. 

Down the line 

We all know that the future of the supply chain is quite unpredictable. Numerous factors including pandemics, changing climatic conditions, politics, and many across the globe contribute to developing supply chain complexities. Secondly, challenging developments like blockchain management of supply chains might develop creative strategies in the coming time.

When we speak about small businesses, they need to focus more on getting prepared for every outcome that might come. Getting the best outputs finally depends upon how you study your data, get your alternatives, and how you keep customers completely satisfied. 



Subscribe To Our Newsletter

  • This field is for validation purposes and should be left unchanged.


At Sage Software Solutions (P) Ltd., we are home to world-class ERP software and CRM software that will solidify your business tech support fundamentals and enable you to build a customer-centric organization. You can also write to us at sales@sagesoftware.co.in.

Disclaimer: All the information, views, and opinions expressed in this blog are those of the authors and their respective web sources and in no way reflect the principles, views, or objectives of Sage Software Solutions (P) Ltd.

Top 5 ways to drive a successful multi-company ERP implementation

multi-company ERP implementation.
Reading Time: 7 minutes

Summary: Today, companies of all sizes, whether conglomerates or small and mid-sized companies, require ERP software to facilitate business processes and get their work done. Moreover, many organizations are looking to expand their domain by opening offices in different locations, requiring a multi-company ERP implementation that can simultaneously manage numerous operations. But the implementation process can be very challenging as it requires a continuous interplay between various forces, including business departments, core team members, vendors, external consultants, and end-users. As a result, many companies fail to implement the ERP system effectively and incur significant losses. On the other hand, those who succeed during this challenging phase open a sea of opportunities. 



A multi-company ERP implementation is one of the most costly and risky projects that your company will ever undertake. 

It can cost millions of dollars and can take many years. 

Therefore it requires assistance from all departments. Employees need to devote about 50% of their time to re-engineer business processes, test systems, migrate data, and train others

Another essential point is that the project must be finished within the stipulated time and budget that requires a system of checks and balances. 

Let’s see 5 ways of how you can do multi-company ERP implementation:

5 essential things for driving successful multi-company ERP implementation


1. Have a clearly defined corporate structure.

Different companies adhere to different corporate structures. 

Some companies have multiple entities that exercise varying degrees of centralized or decentralized business functions. 

Some organizations have all entities functioning in the same country and others have business operations spread across many countries

Some enterprises apply varying costing methods to different business units but have standard master data files that facilitate intercompany buy-sell relationships

At the outset, it’s essential to define the relationship between the parent company and the business units. This helps define ERP software requirements relating to master data, security, intercompany transactions, organizational structure, and administration.

You can select any one of the five business structures for ERP implementation:

5 business structures for ERP implementation

a. Parent company exercises less control

In this structure, small business units in any part of the globe have total autonomy regarding systems, administration, and structures. The parent company exercises minimal or no control over how the business unit functions. As a result, the business unit can implement a separate ERP system if it desires to.

b. Parent company has a say only in financial reporting

In this case, the parent company gives total autonomy to business units except financial accounting and reporting. Business units are free to keep a separate ERP system for managing their daily operations. The parent company only manages the financial part of the business.

c. Parent company exercises control in intercompany transfers

Under this model, different business units are given autonomy for carrying out daily operations. However, the parent company manages the global supply chain by purchasing inventories, fulfilling requirements, and monitoring production schedules. It also fixes the incongruencies in ERP systems of different business units. 

d. Different business units operate together

In this model, different business units can access each other’s data. Therefore there is a minor degree of centralization from the top. As a result, this model is suitable for business units with a certain degree of product-market overlap. In addition, it provides increased coordination and a better framework for applying common standards. 

e. Parent company exercises total control

In this model, the parent company has complete control over the local business unit’s operations. It standardizes the business processes of the local unit and decides which ERP system it should use. This model shares a long history of massive failures and has an excellent track record for efficiencies and cost-benefit. 

2. Map high-level system capabilities to the corporate structure you have selected. 

Keep in mind that different corporate structures have been developed for diverse purposes. Some have strong capabilities that are better suited to satisfy the requirements of conglomerates, which have business units spread across multiple countries. Others are responsible for companies that follow simpler business structures. 

After you have selected the desired corporate structure, it’s time to choose an appropriate ERP configuration. 

Following are the four common types of ERP configurations with respect to the corporate structures we have discussed in the previous point.

4 common types of ERP configurations

a. Single financial/single operation.

Geographically centralized companies use single-site ERP configurations. Conglomerates with several business units spread across diverse regions might also use this configuration if:

i. They operate as a single entity within a single country. For example, if they don’t have to prepare different sets of financial records for taxation purposes. 

ii. They follow the same set of processes within their distribution centers and plants. 

iii. The headquarter manages the flow of goods and materials for each business unit. 

b. Single financial/multiple operations.

Some conglomerates operate as a single financial entity that comprises multiple operational entities. For example, manufacturing, warehouse, sales & marketing, supply chain, and many more. The organization can adhere to varying business processes under this configuration.

c. Multiple financial/single operation.

An enterprise with a single manufacturing facility may have multiple sales offices spread across different countries. This ERP configuration allows the enterprise to account for diverse currencies, accounting regulations, taxations, and languages required for operating in multiple countries. 

d. Multiple financial/multiple operations.

This ERP configuration is most appropriate for typical conglomerates that have multiple business units spread across many countries. For example, metal fabrication companies have resource procurement offices in China and have production facilities in the USA.

Everything about ERP implementation

3. Prepare a resource management plan that mentions the project team’s responsibilities and resource budgets.

ERP implementation success depends on the agility of the team that consists of employees and external consultants. 

McKinsey reports that only 20% of companies get more than half the estimated benefits from ERP systems. 

Sadly, most challenges are created because of employee mismanagement and not due to technical issues. Thus, it would be best if you defined each team member’s responsibilities at the beginning. 

Then, it’s important to focus on the budget. Keep in mind that labor costs account for the highest share in the budget. 

It would help if you also had a separate section in the resource management plan that considers backfilling needs, internal personal commitments, external consulting support, and employee training costs.

Focusing on project management governance is critical to successful multi-company ERP implementation. Include stakeholders from all impacted areas like finance & accounting, production, sales & marketing, supply chain & planning, and many more. 

Remember that these employees must devote at least 50% of their time to ERP implementation. So you may require an extra workforce to fill their positions.

An effective strategy is to create a team of backup personnel that takes care of low-value activities when the core team isn’t present. In addition, it would be best to prepare a contingency plan to take care of emergencies — for example, an employee quits the organization or is removed from the team. 

The budget plan should also talk about new hiring, either full-time or part-time, to support the project. 

Please take care of the following points while building the core team:

i. They should have excellent knowledge about the business processes of their particular department.

ii. They should have excellent knowledge about other business departments.

iii. They should have excellent communication skills to discuss the multi-company ERP implementation process with peers and give presentations to the team.

A skill matrix plays an integral role in developing a structured method to select the perfect candidates for the project, designing customized training schedules, and identifying the best external consulting support.

External consulting support is critical to the multi-company ERP implementation process because they are responsible for installing the software and training the staff. Therefore, search answers for the following questions before proceeding forward:

i. Do they have appropriate technical knowledge about the ERP system?

ii. Do they have the required domain knowledge?

iii. Do they have strong communication skills?

4. Stick to a deliverables-based methodology.

A deliverables-based methodology will allow you to track course progress efficiently. You can break down the project into measurable parts and identify what you have accomplished and what you haven’t. The best part is that if you drift away from the right track, you can find the earliest reasonable opportunity to course-correct with minimal impact

You can create project milestones, such as planning, core-member training, data migration, process walkthroughs, and end-user training.

This methodology also sets deliverables for the core team members that they need to achieve within a set deadline. Reports are sent to respective managers every day, individual performances are monitored, and feedbacks are shared every day. 

As a result, the project is finished within the set timeline, risks are eliminated or kept to the bare minimum, and there is a free flow of information between the core team and the team of external consultants.

5. A free flow of communication should exist between each stakeholder.

The multi-company ERP implementation process impacts the entire organization, from business departments and employees to business operations and external relations. Thus, it would be best if you had a free and fair communication ecosystem where critical information is shared quickly, doubts are resolved faster, and each stakeholder remains on the same page. The following points explain it in detail:

a. The project manager quickly reports the current project status to the senior management, including the CEO, CFO, CTO, etc. It makes it easy to:

i. Demand more money for project completion.

ii. Get critical issues resolves at the earliest.

iii. Clarify any change in project scope.

b. The external consultants can communicate the impact on jobs after the ERP implementation process is done. 

c. The senior management can re-confirm their support for the multi-company ERP implementation project. They can also get real-time updates about the implementation process that helps brainstorm effective strategies to resolve critical issues.

d. The core team members can communicate with end-users and explain how the ERP implementation process will impact their relationships.


Successful multi-company ERP implementation requires collaboration between all business stakeholders, including the core team members, senior management, external consultants, and end-users.

A resource management plan is also essential as it helps keep things within budget and allows selecting the most appropriate people to pull the project.

Next, a delivery-based methodology ensures that each stakeholder is responsible for the assigned work, so that project milestones are accomplished within the set deadlines.

Finally, and most importantly, communication plays an integral role. It allows sharing crucial information with relevant stakeholders that speed up the implementation process and ensures that challenges are resolved quickly.


Subscribe To Our Newsletter

  • This field is for validation purposes and should be left unchanged.

At Sage Software Solutions (P) Ltd., we are home to world-class ERP software and CRM software that will solidify your business tech support fundamentals and enable you to build a customer-centric organization. You can also write to us at sales@sagesoftware.co.in.

Disclaimer: All the information, views, and opinions expressed in this blog are those of the authors and their respective web sources and in no way reflect the principles, views, or objectives of Sage Software Solutions (P) Ltd.

PO Suggestion & grouping the components with multiple vendors nor single

PO Suggestion
Reading Time: 7 minutes

PO Suggestion & grouping the components with multiple vendors

1 24/08/2020 PO Suggestion & grouping the components with multiple vendors


Product  Sage X3
Version/build 11.0


PO suggestion process is mostly/widely useful in manufacturing industries. Sage X3 provides a flexible, user-friendly, and relatively easy process to perform this activity. In addition to the PO suggestion, Sage X3 also provides an out of the box tool that helps a user release Purchase Requisition & Purchase order based on the suggestion. As per the requirement, the user can select multiple suppliers and generate multiple POs for each supplier. The system also generates automatic sequential PO numbers to streamline the order process further.

The key to the value of a PO suggestion is the integration between the modules. And In the PO Suggestion screen, the safety stock material as well appears in the suggestion list. Besides that, all of the core modules’ functions are connected; all the information will flow across the organization structure so that the user can release/create the Purchase Requisition/Purchase Order for approval. The PO suggestion streamlines the procurement of required raw materials from the Production/Work order/Safety stock. It automates identifying the requirements in the suggestion list and is tightly integrated with the processes flow.

In version-11 of SageX3 steps to perform for the POs Suggestion process.

Basic Functionalities setup:

  1. In the product-site level has to update the Suggestion type, Reorder Mode & Reorder policy. The products which are under the manufacturing process need to update the details as per the below screenshot. 

Basic Functionalities setup

Suggestion Type – It is for the flow of the components in the Purchase suggestion list after running the MRP process.

Reorder Mode – In the Reorder mode, it should update as a ‘By MRP’. Consequently, if we update it as a by MRP so once the MRP process is run then the system automatically will verify these components if the material is a shortage for the Production or Safety stock. It will give the suggestion at POs screen level

Reorder Policy – It refers the whether the material is like a Lot of policy, Net Quantity, or any other reordering as per the required we can select. In the Reorder Policy, we can update the processing type as a ‘With MRP pegging’ or ‘Without MRP pegging’. Besides we have an option to set up the system for the reorder quantity as ‘net Quantity’ or ‘Mini. Quantity with/without rounding’

Reorder Policy

2. And we need to check the settings for the Purchase Enterprise planning.

Path: – Setup/Parameters Purchasing Entry Transactions Enterprise Planning


Click on the ‘Enterprise planning’ and in that screening level left-hand side we can see the standard entry transaction for PO suggestion (POS).

Refer to the below screenshots for verifying the entry transaction settings.



Note: If any modifications are required in the entry transaction level. It is recommended that instead of modifying the standard Transaction. Create a new ‘Entry Transaction’ as not to affect the standard-setting.

For Example: If the Existing standard transaction is ‘POS’, just give a new transaction code as a ‘ZPOS’ and do the modifications as per the required and create the Entry Transaction once it is created then validate the entry.

3. Plus we need to check the settings for the Stock requirement parameters.

Path: – Setup/Parameters Inventory Requirements Parameters


Click on the ‘Requirements parameters’ and check the processing BOM type should be updated as a Manufacturing. Refer to the below screenshots for parameter setting.




4. Run the MRP Processing 

Path: Manufacturing Planning MRP Processing 


MRP Processing – 

Once we run the MRP processing automatically system will validate the processing deals and enable us to plan material requirements for a procurement process. 

The Purpose of the MRP process is to verify the processing deals with the various requirements that generate the suggestion types for the Manufacturing and Procurement process.   

Click on the ‘MRP Processing’ and it appears one Popup view. Refer to the below screenshot.


We can provide the reference date as per the required and select the Stock Site (If want to run the MRP Processing for multiple sites then in the detail lines we can select the multiple sites).

After selecting the required info. Click the ‘Ok’ button it appears on the right-hand side.

Once we hit the ‘OK’ button then the system will automatically calculate the process & gives us a ‘Log Reading’. Refer the below screenshot.



Process for the PO Suggestion Single Entry and Grouping:

After running the MRP process system will generate the PO suggestion as per the existing processing deals from Work Order level. If any shortage in component’s system will give a suggestion. Besides from the POs can create the Purchase Requisition or Purchase Order as per the requirement. 

Path: Purchasing Ordering Enterprise Planning



Click on the ‘POS Purchase suggestion’. Later the POs screen will appear in that filter by the site as per required and the start – end range. After providing the filter criteria click the ‘Search’ option displays in the right hand refer the same in the below screenshot. 


After searching the suggestion list appears in the grid. 

Single Entry PO Suggestion Process: 

Later as per the required, we can select any of the ‘Entry’ lines click on the ‘action’ button immediately system shows the options in that select the ‘Plan/Order’.


From the plan/Order screen, we can generate a single entry Purchase Request or Purchase order as per the required. In the PO suggestion list, we have selected one-line entry so against that we can generate an only a single Product Purchase Requisition nor if we want to create a PO directly then we can select the supplier info, later on, have to click the Request / Order button as per the required.

In the below screenshot we can refer the same.


In the PUR quantity, it shows as 500 NOS required. If we want to edit the quantity we can edit the quantity as equal to the suggestion quantity nor less than the suggested quantity. 

As per the requirement, we can directly generate the Purchase Request or PO entry.


In the above screen, we can see that once we hit the order/request system will generate a Purchase order/ Request entry automatically as per our selection and the automatic sequential PO/PR numbers to further streamline the order/request process.

Multi Entry PO Suggestion Process: 

In the same screen of the PO suggestion after providing the Filters & Strat- End range then click the search button the system will verify the entries and suggestion list appears in the grid.


On the left-hand side screen, we can see the ‘Grouping workbench’ using that we can group all the required components for a single supplier. 

For a single supplier, we can group all the components and can create an order entry. Plus in the grouping option we can select a number of components and for some components with different suppliers then the system will generate the multiple entries for every single supplier one entry can be created automatically.

After clicking the ‘Grouping workbench’ system will give a popup view to select the transaction selection.


Select the ‘Material buyer’ transaction. Then the system will open a new screen for the grouping workbench. Similar to the PO suggestion here as well we can give the filters & Start-end range. Later click the ‘Search’ option appears on the right-hand side.


After searching the list of entries will appear in the grid. In the below screen we can refer the same.

And on the left-hand side screen, we can see the two options ‘Include all & Exclude all’. Using the Include all option we can select all the entries records appear in the grid. If not required all the entries then we can select the Exclude all option and we can select manually the tick mark as ‘Tick’ the entry if want to generate the order if not ‘Untick’ then the system will not consider the untick lines.


In the above screen, we have ticked some lines with different suppliers and the number of components grouped. 

Once after selected the required list as per the requirement then directly click the ‘Generate’ button appears on the right-hand side.


Once after clicking the ‘Generate’ option system automatically create the entries. 


The system will generate the Log Reading file automatically in the log we can find the entry order number. As we have selected the two suppliers with different components. So as observed in the log file system created the two order entries for each supplier different entry. 

As per the selection, accordingly, the system will generate the entries that can refer to the above screenshot.

At Sage Software Solutions (P) Ltd., we are home to world-class ERP software and CRM software that will solidify your business tech support fundamentals and enable you to build a customer-centric organization.

Non-Conformance Module in Sage X3

Reading Time: 2 minutes

Non-Conformance Module in Sage X3

This is a very important module for all kind of service, manufacturing and distribution companies, which will help track the issues related to the Customer and supplier returns.

Non Conformance module will mainly come into picture when the products manufactured or sold does not match the minimum standard requirements and then are send back to the origin from where it is dispatched. It not only helps track the issues with the customers and suppliers but also help trace the issues within the organization. The module helps in tracking this kind of issues and ensures proper action plans are derived and further implemented. This kind of problems/issues might have an impact on the organizations image, cost, performance and not least but can also create statutory and compliance issues.

The Non Conformance request helps the organization to enter the details related to the returns/issues faced against the materials or services. In the screen the user, have multiple options which he can select along with the document reference and further assign a approver and a quality personal to it for further processing.


Non-Conformance Module in Sage X3


Once a Non Conformance request is set into the system, it is now time to act on it and execute the concrete corrective plan defined. With the help of Action plan, the user can update, what has been done against the Non Conformance request so that the case is closed and the external or internal authority us intimated accordingly. In this step, again Sage has provided multiple option to select and track what all things has been done against the request so that you define your own set of options and values and then also have an analysis of it whenever required.


Non-Conformance Module in Sage X3


The analytics related to the non-conformance will help avoid the same quality or compliance issues, which might re-occur. This if we implement this module then we can have a proper preventive major taken such that the issues with the internal and external parties are minimized.

As now we are through with the concept of Non-conformance in the next blog, we will highlight as how we setup the non-conformance module.


For more details on Sage X3 features and functionalities for business growth, visit our website or write to us at sales@sagesoftware.co.in. You can also check out industry-specific ERP and CRM solutions here.