ERP Systems in Logistics: Top 5 Vendors & Steps to Choose One

Optimising supply chain, fleet, and warehouse management is key to thriving in the logistics world. That’s where a tailored ERP system for logistics comes into play. It empowers businesses to streamline operations and stay ahead of the competition.

In this post, we’ll dive into the top five logistics ERP software and walk you through the essential steps to find the perfect fit for your company’s needs.

What is Logistics ERP Software?

1. About an ERP system for logistics

A logistics ERP system is designed specifically for logistics and supply chain companies. It integrates key business processes like transportation, inventory management, warehouse operations, fleet and asset management, sales, and customer relationship management (CRM). This unified system helps companies streamline the movement, storage, and distribution of goods.

2. How does logistics ERP software help businesses?

Logistics is expected to be the fastest-growing industry between 2024–2033, with a noteworthy CAGR of 9.35%. That’s why logistics ERP software is becoming essential for companies looking to stay ahead in this booming sector. An ERP system benefits logistics companies in different ways:

• Enhance route planning, real-time tracking, and automated scheduling to reduce fuel costs and delivery delays.
• Track inventory in real-time, forecast demand, automate replenishment, and optimise warehouse workflows to boost efficiency.
• Schedule timely fleet maintenance and control costs by monitoring fuel usage, driver behaviour, and repairs.
• Simplify order processing and enhance collaboration between departments for better service delivery.
• Provide real-time communication and personalised services, ensuring timely deliveries to increase customer satisfaction.

3. Difference between general ERP and logistics ERP

General ERP systems provide a broad range of functionalities across various business aspects, including finance, human resources, and sales. They streamline overall business operations but may lack the specialised features needed for complex logistics processes. 

In contrast, logistics ERP systems focus specifically on the unique demands of the logistics and supply chain sectors. They offer advanced capabilities for transportation management, real-time inventory tracking, and end-to-end order fulfilment. This specialisation allows logistics companies to optimise fleet and warehouse management, and improve overall efficiency.

Top 8 Must-Have Features Of The ERP Software For The Logistics Industry

4 Steps To Select An ERP For Logistics Companies

According to Panorama Consulting, nearly 95% of organisations that adopted an ERP system experienced enhancements in their business processes. This section assists you in selecting the best ERP solution for your logistics company.

Step 1: Understand your logistics industry & service complexity

It’s crucial to have a comprehensive understanding of your logistics operations. You should consider the following aspects.

• Business size and model: Are you a small local courier service or a large international freight forwarder? The scale of your operations will influence your ERP needs. Larger organisations may require more complex solutions, while smaller businesses might find simpler systems sufficient.
• Service complexity: Analyse the types of services you provide, such as freight forwarding, last-mile delivery, or warehousing. Each service has unique operational challenges that your ERP system should address.
• Current system analysis: Evaluate your existing software solutions. Identify what works well and what doesn’t. Understanding your current limitations can guide your search for an ERP with the necessary enhancements.
• Workflows: Map out your logistics workflows to identify areas where automation and integration can improve efficiency. For example, consider how orders are processed, how inventory is tracked, and how transportation is managed.

Step 2: Identify key features

This step ensures the software aligns with your business objectives. Key ERP logistics modules to consider include:

• Inventory management: Look for real-time inventory tracking capabilities that can minimise stockouts and overstock situations.
• Fleet management: Ensure the ERP includes tools for fleet tracking, maintenance scheduling, and route optimisation.
• Supply chain optimisation: The ERP should have supplier management, procurement, and demand forecasting features to streamline your supply chain processes.
• Transportation management: Evaluate options for managing shipping routes, freight cost calculation, and carrier selection to improve logistics planning.

Step 3: Craft desired solutions & evaluate best-fit vendors

With a clear understanding of your requirements, you can evaluate potential vendors. 

• Send Request for Proposal (RFP): Prepare and send out an RFP to shortlisted ERP vendors, outlining your specific needs and expectations. This will help vendors tailor their proposals to your requirements.
• Request a demo or trial: Most vendors offer demonstrations or trial periods. Utilise these opportunities to explore the software’s functionality and user interface. This firsthand experience can provide valuable insights into usability and performance.
• Conduct proof of concept: This involves implementing the ERP for your logistics company on a smaller scale or within a specific department to assess its capabilities in real-world scenarios.
• Assess costs: Evaluate not only the initial costs but also ongoing expenses, such as maintenance, updates, and user licenses. Ensure you understand the total cost of ownership to make an informed decision.

Step 4: Ensure seamless integration

Integration is a critical aspect of implementing a new ERP system. Your chosen solution must work seamlessly with your existing software and hardware. 

• Compatibility check: Verify that the ERP system for logistics is compatible with your current software, such as transportation management systems (TMS), warehouse management systems (WMS), BI, EDI, IoT or financial systems. This will prevent data silos and streamline operations.
• Data migration planning: This includes mapping data fields, cleaning existing data, and planning for a phased transition if necessary.
• Integration capabilities: Check whether the logistics ERP software has built-in integration capabilities or APIs to facilitate connections with other logistics tools.

Top 5 ERP Systems for Logistics Companies

1. Microsoft Dynamics 365

As a cloud-based ERP solution, Microsoft Dynamics 365 integrates CRM and ERP functionalities. It allows logistics companies to manage operations comprehensively.

Key features:

• AI-powered insights: Leverages artificial intelligence to provide predictive analytics and real-time insights, enhancing decision-making.
• Supply chain management: Provides end-to-end visibility and control over the supply chain, optimising inventory, procurement, and logistics for better efficiency.
• Customer service features: Includes tools for managing customer interactions. That enables faster response times, issue tracking, and personalised service to improve overall customer satisfaction.

Best for: Microsoft Dynamics 365 is best suited for large enterprises and global logistics companies that require a scalable, cloud-based ERP solution.

2. Odoo

Odoo is an open-source ERP known for its modularity. By implementing Odoo, logistics companies can select and customise modules to suit their requirements.

Key features:

• Modular approach: You can choose from many applications (like CRM, project management, and e-commerce) and add only what you need.
• Fleet management: Efficiently manages vehicle fleets, including tracking, maintenance schedules, and fuel consumption to optimise operations.
• Document management: Streamlines document handling by integrating an OCR solution, enabling automated data extraction and organisation from physical documents.

Best for: Odoo is for small to medium-sized businesses seeking an affordable, flexible, and customisable ERP solution.

3. SAP S/4HANA

This ERP solution is designed for large enterprises, offering extensive tools tailored for complex logistics and supply chain management.

Key features:

• Transportation management: Enhances the efficiency of freight management by analysing shipping routes, costs, and carrier performance. You make informed decisions to minimise transportation expenses while maximising delivery speed and reliability.
• Supply chain logistics management: Monitors the entire supply chain in real-time, providing insights into inventory levels, order status, and shipment tracking. 
• Embedded machine learning: Integrates machine learning capabilities to automate routine tasks and improve operational efficiency.

Best for: SAP S/4HANA is best suited for large enterprises and multinational corporations that require a robust, integrated ERP solution to manage complex business processes.

4. Oracle NetSuite

This cloud-based ERP system combines robust financial management with logistics functionalities.

Key features:

• Real-time financial management: Offers comprehensive finance and accounting capabilities, providing full visibility into integrated financials. It supports secure electronic payments and allows users to track and manage fixed assets, including depreciation. 
• Budget, forecast, and manage: Allows organisations to model and evaluate unlimited “what if” scenarios, seamlessly updating forecasts as needed.
• Business Intelligence (BI): Robust reporting and analytics tools that ensure compliance and meet organisational requirements with timely, customised reporting. 

Best for: Oracle NetSuite is ideal for mid-sized to large enterprises with operations across multiple countries.

5. Infor CloudSuite

If you seek a cloud-based ERP solution that caters specifically to the unique demands of various industries, Infor CloudSuite is your choice.

Key features:

• Warehouse management: Provides advanced warehouse management capabilities that optimise inventory control and streamline order fulfilment processes.
• International transportation planning and execution: It helps optimise routes, reduce costs, and ensure compliance with global trade regulations.
• Supply chain visibility: Allows businesses to get insights into inventory levels, supplier performance, and order status.

Best for: Infor CloudSuite is for large manufacturing and distribution companies looking for an industry-specific cloud ERP solution.

Next Step: Cooperate with a Reliable Logistics ERP Implementation Expert

Choosing the right ERP system is just the first step. To really make it work for your logistics business, partnering with an experienced implementation expert is crucial. They’ll help you build a bespoke logistics ERP system to fit your specific operations, make sure it integrates smoothly with your existing tools, and get you the best return on your investment.

ERP Systems in Logistics - Frequently Asked Questions (FAQs)

1. What are the top ERP systems for logistics companies?

Several ERP systems stand out for logistics companies, offering features that enhance operational efficiency and scalability:

• Microsoft Dynamics 365: Known for its versatility and powerful integration with Microsoft’s ecosystem.
• Odoo: An open-source ERP that provides flexibility and cost-effective solutions for smaller to mid-sized logistics companies.
• SAP S/4HANA: Tailored for large enterprises with robust supply chain management and real-time data capabilities.
• Oracle NetSuite: A cloud-based ERP ideal for managing global logistics operations.
• Infor CloudSuite: Specifically designed for industry-specific solutions, including logistics and transportation.

2. How does ERP benefit logistics companies?

ERP systems offer logistics companies several key benefits by streamlining supply chain operations, optimising transportation routes, and providing real-time inventory tracking. This leads to faster deliveries, lower fuel costs, and better stock management.

3. Can ERP systems integrate with other logistics software?

Yes, most modern ERP systems are designed to integrate seamlessly with specialised logistics tools like Transportation Management Systems (TMS) and Warehouse Management Systems (WMS). This allows for unified data flow and better coordination across various functions.

References:

• Precedence Research (2024). Logistics Market Size, Share, and Trends 2024 to 2034
• Panorama Consulting Group (2021). 2021 ERP Report.