I have been working in supply chain for nearly 30 years.
Thinking back to my early days as a materials planner, and well before I had even heard of SAP and ERP, I remember the pain and difficulty in managing parts supply using green screen mainframe systems, file transfers and updates via email. We used these methods of managing data between departments to update data sets ready for the following morning. This out of date data we then used to manage the supply of materials. This was no easy feat considering the number of parts per finished goods ran into 1000s and consumed a great deal of time across multiple departments to provide data that was already out of date.
With the implementation of SAP and the dawn of ERP, back then MRP and later MRP2, the business experienced a drastic change in culture. Using an ERP system enabled us to vastly improve the speed and accuracy of the information flow through the company, and we began to benefit from real time data with much less effort.
This improvement in the processes of data transfer between departments, shifting from overnight updating to real time updates, allowed us to adjust the supply chain quickly in response to product design changes, manufacturing schedule changes, part scrapping in WIP, etc. It also enabled us to not only advise the production team of supply chain issues as they happen, but also advise how those issues impacted the current production plan. This meant production could quickly respond with tactical production decisions and actions preventing manufacturing delays.
At the start of my career 30 years ago, for smaller companies, the investment in an ERP system would have been substantial and likely not provide a ROI for many years. After all, an ERP system such as SAP R/3 was extremely expensive and required significant resource investment and as such was primarily focused on larger corporations, not small and medium size enterprises.
Today, with the advent of the cloud and cloud-based ERP solutions, such as SAP Business ByDesign, and the fact these new ERP systems have been specifically designed to grow with the needs of small to medium enterprises, the required investment in terms of ongoing cost spiralling from technology developments and upgrades is now absorbed by the Technology companies who provide automated updates distributed out to the business solution without the need for a lengthy upgrade implementation. .
A small to medium business can now embrace an ERP system and gain competitive advantage through efficient supply chain management and visibility for a relatively low initial and on-going cost.
Yet these SME are still deliberating on investing in and adopting a business culture with a an ERP system at its core to help streamline their processes and give visibility of their current supply chain position.
Whilst they think about adopting an ERP system, they continue making critical supply chain decisions on:
- out of date data around supply delivery information
- out of date data on the valid demand from sales and production
- inaccurate stock figures
Having walked the path myself, seeing first-hand the benefits an integrated ERP system brings into a business, why not see what a scaling, modern ERP can do for you?