Traditional ERP Inventory & Planning Systems - What's
Wrong:
Many companies are still doing business today with ERP
systems that utilize a traditional MRPII approach to planning.
This model was created back in the 1980's - in a completely
different business and technology environment. Even then - it
failed: Too complex to set up, too slow to use, too hard to
maintain.
Increasingly, companies are providing their customers with
web-based, order entry front ends. While this approach may look
slick, and appear high-tech, behind the scenes many continue to
rely on the same antiquated backoffice planning systems. We see
many highly publicized issues emerging with order fulfillment -
because the underlying problems have not been solved:
· Single Company Business Model: Designed prior to
the emergence of the Internet as a multi-company communications
network. Limited to tracking and planning material owned by one
company. Cross company collaboration is not supported by design.
To compensate, kludgy batch interfaces are built that result in
redundant, out of date and often inaccurate information.
· Slow, Batch Planning: Planning is executed in batch
mode, resulting in long processing times - sometimes overnight.
Planning is not as fast and dynamic as real life. As a result,
planners often abandon ERP planning applications to solve the
dynamic problems they face day to day.
· Arcane Business Modeling: There is no explicit and
visual model of the business process. The business model is
hidden in a multitude of non-connected master files. Routings are
limited to the manufacturing process and inventory is tracked by
product, lot and location. Neither supports tracking materials as
they flow through all the stages of the supply chain.
· Hostile, Complex Planning Setup:Planning rules are
either hard coded or buried in a multitude of complex switch
settings that are too interconnected for the planner to control
directly. Setup often takes weeks and months.
· Big Software (BS) Syndrome:Integrated in large, complex
modules. Modules alone are expensive and complete systems are
very expensive - often in the millions of dollars including
implementation. They take years to deploy, and years (if ever) to
reap any benefits at all.
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