Page 194 - DCAP302_ENTERPRISE_RESOURCE_PLANNING

Enterprise Resource Planning

notes The concept of SCM dates back to the late 1950s where research on system dynamics explored the
systemic properties of enterprises collaborating in chains. Business dynamics dealt with delays
and information flow and addressed contemporary problems like the “Bullwhip effect” which is
still a significant issue.
There was no business implication of this research due to the immaturity of the available
computers, but also the success of the emerging MRP systems postponed interest in this approach
for decades. The concepts re-emerged at the beginning of the 1980s initially in operations and
logistics research, and by the 1990s many businesses were implementing major structural changes
in their supply chain.
SCM took a systems approach to planning and controlling the material and information flow
from the raw material to the final customer, and therefore SCM was defined as:

1. The management of upstream and downstream relationships with suppliers and customers
to deliver superior customer value at less cost to the supply chain as a whole.
2. The strategic management discussions dominated the initial research agenda but the
software industry responded to the new business requirement by producing a new breed
of add-on or “bolt-on” software to ERP called Advanced Planning and Scheduling (APS)
systems .APS was enabled by refining the mathematical programming models and in
particular the genetic algorithms applied to solve the network problems of an entire supply
chain. The APS systems facilitate the central management of the supply chain activities and
processes in real time, essentially by extending the MRP/II planning concepts to encompass
the entire supply chain, and as a result the systems in effect are SCM systems.

3. Although the SCM concept deals with the entire supply chain, the perspective of the
upstream SCM and the downstream SCM differs.
4. Downstream, SCM deals primarily with demand management, order fulfillment,
replenishment and collaborative relations with customers, e.g. collaborative planning,
forecast and replenishment (CPFR). Some researchers even proposed demand chain
management (DCM) as a new perspective .The management of market information became
important and the software vendors targeted these new requirements with the customer
relationship management (CRM) systems.
5. Upstream, SCM primarily deals with issues of managing the supplier networks. Issues
like supplier relations, partnerships, competence development and technology transfer are
barriers for developing the supply chain. Practices based in the just-in-time (JIT) philosophies
were implemented in the supply chain and new concepts like vendor managed inventories
(VMI) emerged. The traditional purchasing task became strategic sourcing and the new
tools required were gathered under the supplier relation management (SRM) hat.
6. Managing information in an inter-organizational context has become critical and the
emergence of the internet and the range of related e-business technologies created new
opportunities and threats to supply chain managers.

11.2 What are the added features in erp ii?

ERP has a big challenger from its own community. Its successor ERP II has been talked about
much. However there are also arguments that it is merely an extension of ERP. ERP and ERP
II have lot of differences. The popular myth that ERP II is the extension of ERP is not true. The
comparative features of ERP and ERP II will explain them clearly.

188 LoveLy professionaL university