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Unit 10: Enterprise Resource Planning – I

Achieve 95-99% schedule attainment Notes
Achieve 95-99% customer service
Reduce inventory 25-40%

Improve productivity 10-20%
Achieve +95% on time supplier delivery
Formal sales and operations planning process
Achieve 98% routing accuracy

Achieve 99% bill of material accuracy
Assembling the information need to feed the SCM applications from legacy systems can be
tedious as it is difficult to get that information flowing on a fast, reliable basis from all the areas
of an organization. An ERP system integrates all that information together in a single application
and SCM applications benefit from having a single major source to go to for up-to-date
information.
Majority of the management people who have tried to install SCM applications say they are
glad they did ERP first. They term the ERP projects making your information house in order.
Now most ERP solution providers have SCM modules so doing an ERP project may be a way to
have these both in one go. What the organizations must do is that they must evaluate whether
these applications meet their needs.
Many times software applications that automate the logistics aspects of SCM do not gather
information from around the company, so they tend to be independent of the ERP decision. But
it is better to have these applications communicate with ERP in some fashion. It’s also important
to pay attention to the software’s ability to integrate with the Internet and with ERP applications
because the Internet will drive demand for integrated information.
Many SCM applications are reliant upon the kind of information that is stored in the most
quantity inside ERP software. Theoretically you could assemble the information you need to
feed the SCM applications from legacy systems (for most companies this means Excel spreadsheets
spread out all over the place), but it can be nightmarish to try to get that information flowing on
a fast, reliable basis from all the areas of the company. ERP is the battering RAM that integrates
all that information together in a single application, and SCM applications benefit from having
a single major source to go to for up-to-date information. Most CIOs who have tried to install
SCM applications say they are glad they did ERP first. They call the ERP projects “putting your
information house in order.” Of course, ERP is expensive and difficult, so you may want to
explore ways to feed your SCM applications the information they need without doing ERP first.
These days, most ERP vendors have SCM modules so doing an ERP project may be a way to kill
two birds with one stone. Companies will need to decide if these products meet their needs or
if they need a more specialized system.

Applications that simply automate the logistics aspects of SCM are less dependent upon gathering
information from around the company, so they tend to be independent of the ERP decision. But
chances are that you’ll need to have these applications communicate with ERP in some fashion.
It’s important to pay attention to the software’s ability to integrate with the Internet and with
ERP applications because the Internet will drive demand for integrated information.

Example: If you want to build a private website for communicating with your customers
and suppliers, you will want to pull information from ERP and supply chain applications together
to present updated information about orders, payments, manufacturing status and delivery.

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