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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