34SCSERP
Traditionally,
ERPsystemsarewithin
thefourwalls of a
company,
meaningthatintegration
acrossenterprise
boundariesis
restricted.
Asorganisationslearn to becomemorecustomer-facing ,supplychainvisibilityandcontrolwillincreasinglybeessentialforcommercial . success
, saysNickAllen.
wwwsupplychainstandardcorn
Gettingahead
Increasing
supplychaincomplexity is a majorconcernforjustabouteverysectoracrossthebroadindustrialspectrum . According to a
worldwidestudyof smallandmedium-sizedenterprises in
thediscretemanufacturingindustry justpublishedbyIDCManufacturingInsightsandconductedonbehalf of InforandIBM some58.9percent of
WesternandNorthAmericanrespondents statedthatcomplexity is a
criticalissueregardless of thesize of thebusiness.
Thereporthighlightsthedifficultiescompaniesface in
ensuringfulfilmentdue to complexglobalsupplychains.A lack of
clearvisibilityintomarketdemand coupledwithlongsupplychainsand
a pressure toreducecostshaveall
placed a heavyemphasisontheneedforfarmoresophisticated IT resource
, systemscapable of offering theclarityrequired fororchestratinghighlycomplexandglobalsupplychains.
Whilethereport indicatesthatrespondents to thesurveydonotfind it easy to
fmdhardmeasuresforthevalue of ERPsystems ,
82.7percent of discretemanufacturersbelieve theirERPsystem is helpingthemsomehow . Thekeybenefitscitedincludemakingbetterdecisions
, increasingprofitabilityandreducingmanufacturing costs . Asorganisations learn to
becomemorecustomer-facing , supplychainvisibilityandcontrolwill increasinglybeessentialforcommercial success.
RonaldTeijken ,
directorof industrymarketing ,
manufacturingandlogistics at SterlingCommerce,
believesthat, althoughERPhasprovided a
standardised
systemformajorprocesseswithinmanufacturingcompaniesformanyyears ,
theeffects oftherecession
havemeantthattraditionalsupplychainshavechangedconsiderably andERPsystemsarenotwellsuited to
supporttheextendedsupplychainprocesses.Heseesthattradingpartnershavefluctuatedgreatly
duringtherecession andmanufacturersnolongerworkasindividuals
,
orin business silos .
"
Theynowhave a
muchlargerbusinesscollaborationnetworkthroughoutwhichtheyneed
toshareinformation
,
" hesays."
Historically,
ERPsystemshavebeenperceivedascumbersome
,
restrictiveandcostly ,
"
saysTeijken .
" What' s
more, traditionally,
ERPsystemsarewithinthefourwallsof a company , meaningthat integrationacrossenterpriseboundaries is
restricted. Theyalsotend to
bedevelopedverticallyacross a company,
butfailto integratewith
otherareas of thesupplychainoutside thefourwallsof
thebusiness. "
Teijkensaysmanufacturersnowneedsolutionsthatcanorchestrate theirordermanagementacrossmultipleinstances of ERPsystems . What is
needed,
hesays ,
is a
solutionthatcrossesthewalls of boththeenterpriseanddifferentbusinesspartnersandwhich is alsoeasy to
integrateandexecuteontop of existinginfrastructure.Reflectingthisrequirement forgreaterconnectivity
beyondtheenterprise ,
SolarsoftBusinessSystemshas
launched acloud-basedversion of itsERPplatform . The
companysaysitsiVPERPsystem is alreadybeingusedby350manufacturingcompanies . ProductdirectorSteven
Hargreaves says :
" One oftheclearestadvantages of
choosingthecloudoption isthatmanufacturersgain
earlieraccess to newcapabilitieswithouthaving towait
until a newfiscalperiodforthecapitalbudget . Hosted,
service-based solutions areaccountedfordifferentlyandtreatedas a monthlyoperatingexpensewith a
predictablechargingstructureandupgradesandmaintenancebuiltin. "
Moreandmorecompaniesareadopting" cloud
computing" notonly to
trademorecollaboratively withsuppliers ,
butto bridge thesiloswithin theirown
organisations , givingvisibilityacrossmultipledivisionsor operatingunits . AlstomTransport ,
a majormanufacturer of railwaysystems , implementedanondemandsupplychainmanagement systemfromWesupply to
ironoutinconsistentandunreliableintersiteservicelevelsacross20 of itssitesworldwide . Theresultwasanimprovement from70percent to 90percent in 16monthsand a significant reduction in
inventorycosts." Theinternalcollaborationacrossoursitesfacilitates
animprovedtrustingrelationship , enablingimprovedcontrol of scheduling andfulfilment
,
whileproviding a
real-timeglobalview of ourbusinessfromanylocation,
"
saysAnnieSaillard, supplychaindirector at Alstom
Transport . Thecompany is nowmoreeasilyableto
exchangeordersandcommitmentsbetween itsinternal
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wwwsupplychainstandard .com
in theclouds
plants ,
whileseamlesslyleveraging ,
andintegratingwiththeSAPsystemalready in placeacrosstheorganisation.
RobGibney,
UKcountrymanager at Imtech ICTLogistics Solutionssees a growingrolefortransport andwarehousemanagementsystemsbeingdeliveredthroughSaaS . Thecompany is launching a SaaSversionof itsestablishedproduct in January .
" Thegrowingcomplexityandinterconnectednature of businesscanbea barrierformanytransport companieswanting to
upgrade or keeppacewithIT systemdevelopments ,
" hesays .
" Weseethefutureasbeingable to wrapallthefeatures of ourdevelopedsoftwareofferinginto a
SaaSbased product , making it availableon a monthly feebasis .
Theidea is thatcompaniescantry it outfora few
monthswithouta need to commit,
andcritically,
implementation time is dramaticallycut. "
According to Gibney,
theSaaSmodelholds a lot of
advantagesforthesoftwarevendortoo .
" Froma
software
supplier' s point ofview
,
thewholesupportandsalesimplementationmodel is muchbetter
,
sowecanreduceourcostsandpassthosesavingson to
ourcustomers,
" hesays .
Betatesting ofa SaaSversion of
thecompany' s
software is currentlyunderwaywith a European launchscheduled forJanuary2011.
ThebigERPvendorstooarelooking towards thecloud.Oracle
,
offers a complete , open ,
andintegratedportfolioof
softwareandhardware forbuildingandmanagingprivatecloudsasaninternalserviceprovider,
fortakingadvantage of publicclouds
,
andfordevelopingcloudservices thatcanbeofferedbycloudserviceproviders.
logisticsmanager September2010
Workingwithsupplychain ,
partnersoutsideof theenterprise
is one of thelatestgrowthareas.
Components includesome of thecompany's leadingtechnologiessuchas : OracleDatabase
,
OracleFusionMiddleware
,
VMandEnterpriseManager.SAP is alsoresponding to thismove in
thesupplychainlandscape .
SimonBishop ,
co-chairSCMspecial interestgroup at UK & IrelandSAPUserGrouponERP
, explainshowtheERPvendor is responding to thedevelopingnature of supplychains .
"
Linkingandcollaborating withsupplychainpartners outside
oftheenterprise is
one of
thelatestgrowthareas in thesupplychainprocessandthere
is currently arevolution takingplace in
thearea of
SupplierNetworkConnectivity ,
" hesays .
" SAPforexample ,
hasresponded to thisgrowingdemandbyaddingenhancedfunctionality to itsSCMmoduleanddevelopingothersolutions to supportthis. "
" Thereis growingfeeling that
,
around a centralcore of
ERP,
anenvelope of applicationsolutionswillcreatetheoptimumprocessingenvironment
,
" hesays .
" Overthelastdecade or
sotherehasbeen a seachangefromERP
systemswith a veryrigidstructure to a farmoreflexiblesolution . Thishasmeantthattheoriginalmaindifficultyof
communication betweensystemshasbeenreducedconsiderably andnow a
combination of ERPproviding a
centralcoresurroundedbybest of breedsolutions is
considered thewayforward. "
SlowA survey justpublishedbytheUKandIrelandSAPUserGroupfoundthatalmostthreequarters (
73percent)
of
SAPusersbelievethatSAPhadbeenslow to bringitsSaaSsuite to
market .Thesamesurvey found that61percent
of SAPuserssawtheirorganisationusingSAP's SaaS
offerings inthefuture .
Also,
some16percent of
respondents saidthattheyendedupusinganothervendor'
s technology in anotherarea of theirbusinessbecauseSAPdidnothaveanappropriateSaaSofferingfortheirneeds.
DannyHalim of IDAadvocatesthebest ofbreed
approach .
"
Manycompanies wentthroughtwo tofive
years of ERPimplementation ,
andthelength of
implementationvariesbecause ofthesizeand
complexity oftheirbusinesses
,
" hesays . However,
"
uponcompletion theyarenotnecessarily getting thefullROIthatwaspromisedfromtheimplementationandthatcreates
a lot of heart-burn inthebusinessfromthe
standpoint of starting a new IT project."
Forcompanies looking to moveforward,
Halimsuggeststherearethreechoices . Optionone : Donothing.Option two : Goback to
theERPvendorandaskwhatelsecanbedone
,
whichhesays" wouldprobablybe
,
implementanotherround of ERP "
. Andoptionthree :
" Concentrateon ' bestof breed ' andsolutions thatwould
beable to interface tothoseERPsystems ,
butfocusedonsolving thespecificbusinessissuesandchallenges thattheyhave a
solutionthat is lowrisk. "
Recentresearch carriedoutforGXShighlighted thefactthat34percent of
datain ERPsystemsoriginatesfrom
outsidetheenterprise ( eg ,
fromcustomers, suppliers ,
3PLs,
etc)
.
" Thisdemonstratestheimportance of
consideringtheintegration of externaltradingpartnertransactionswithERR
"
saysMarkMorley,
director of
automotive industrymarketing at GXS . Emphasisingtheimportance of ERPandB2Bconnectivity,
theresearchuncovered57percent of companieshaveexperiencedproductionoutagesdue to lack of B2Bconnectivity.
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