ERP Systems - Still Necessary but not Sufficient

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Many businesses choose to upgrade or change their ERP systems. The legitimate reasons are varied but the return on investment is long, often many years. One of the common reasons for upgrading includes improving their supply chain management.

ERP SystemsHowever, even today, some 20 years after Y2K, we see ERP systems upgraded and there is little improvement in their supply chain processes.

Why is that? It is best described by Gartner, who’s Magic Quadrant for Supply Chain System of Record rates the prestigiously priced SAP APO planning system in the bottom left corner of the quadrant. Also, Gartner is now calling the quadrant a statement of record, not a resource planning system.

Why is it they have acknowledged that ERP systems are exactly that, a “System of Record”? The system requirements for corporate governance and maintaining taxation compliance make it difficult to look forward. They are data historians that are designed to tell you what happened.

Planning is the art and science of looking forward. When it comes to supply chain there are 2 clear messages; clarity now, and agility to evolve as your business environment changes.

Best of breed supply chain solutions offer these 2 certainties in supply chain; foresight and adaptability.

Let your ERP vendor look after your accounting and transactional data, it is their core strength. But if you need a competitive supply chain, utilise your limited cash with experts, experts in both Master data and the latest supply chain strategies.

I expect many will take offence with this, but bear with me: In today’s world, you wouldn’t buy a car without a windscreen and modern dashboard. An ERP is really just a rear vision mirror; essential but does not give you the visibility you require in this ever faster-changing world. It tells you when the order was placed or when the items were dispatched, not what your customer needs next month or where potential lags in supply might be. Industry 4.0 is exciting because it gives us clarity to what’s happening in real-time.

Necessary but not SufficientIt was over 20 years ago that Eliyah Goldratt wrote his book “Necessary but Not Sufficient” to describe this basic concept of where ERP systems are with supply chain management systems and it is still true now.

Written by Tim Gray

Prophit Systems Vector

Contact supply chain software solutions experts, Prophit Systems to discuss further.

 

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Prophit Systems

At Prophit Systems, we believe that if you equip your supply chain to serve your customers impeccably and at the lowest possible cost, you will dominate your market. We work with manufacturing and distribution companies to dramatically improve the effectiveness of their supply chains. Our process consulting and best-of-breed software integrates with and augments our clients' existing systems.

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