Your ERP solution is installed and running...think you're done?
Wrong! Surveys and the Supply Chain Compass shows that
installation is not the finishing point; rather it merely signals
that you have reached the third of five stages in the Supply Chain
Compass (Bendoly and Jacobs 2005). A crucial phase, Stage Three is
the point at which you deploy the foundational solutions needed to
truly connect employees, vendors and customers...in short...it is
your value chain.
According to a survey of North American APICS members, the
majority of "best of breed" manufacturers are moving beyond Stage
Three by extending their ERP systems to address specific needs
inherent in their industry or company (APICS, January
2004). These "extensions" provide solutions that no existing
ERP system can address - notably, the specific business
requirements that make them unique. The efforts produce competitive
advantages and business agility, and propel the manufacturer into
the fourth and fifth stages of the Supply Chain Compass.
The questions then arise - what systems are necessary...how many
are necessary...and how can they be added? According to the January
2004 APICS survey, "best of breed" manufacturers are able to
achieve specific goals by addressing related business functionality
issues. For instance, if their objective is to increase production,
then the manufacturer deploys extensions (listed in order) designed
to generate productivity gains:
1. Inventory Management
2. Factory Planning and Scheduling
3. Demand Forecasting and Planning
4. Warehouse Management
5. Data Warehouse
6. Product Data Management
Alternatively, if increased revenue is the goal, manufacturers
deploy extensions to achieve meaningful revenue increases (listed
in order):
1. Demand Forecasting and Planning
2. Inventory Management
3. Factory Planning and Scheduling
4. Quality Management
5. Call Center Management
6. Warehouse Management
7. Customer Relationship Management
According to the survey, these "best of breed" manufacturers
deploy an average of five extensions to their ERP systems.
How to Extend your ERP
Microsoft provides such a platform, allowing easy extension
development that integrates seamlessly with the current ERP
investment, and facilitating a comfortable and familiar user
experience for employees, customers and vendors.
While informative, the findings of the Bendoly/Jacobs and APICS
studies leave many manufacturers asking what they should do to
remain agile amid an environment of new best practices and
increased competition. First, evaluate the current ERP system and
its ability to support current business processes. Second, identify
gaps between current capabilities and outstanding business needs.
Third, identify if any gaps can be resolved through reconfiguring
the current ERP solution, upgrading your the solution to its
current release or accessing third party solutions available for
the specific system. Fourth, commit to developing the solutions if
they do not exist. The result will reduce competitive parity and
increase competitive advantage now and in the future.