Modern times call for modern ERP

Posted on 4 Jun 2009 by The Manufacturer

A big issue for manufacturers’ IT is the efficient integration of different IT systems. One of the battlegrounds for enterprise resource planning software is between traditional legacy ERP solutions and more modern enterprise applications, where there is a tradeoff between cost, functionality and suitability to the business. Adam Prince, senior director of product marketing at Epicor, makes the case for a modern ERP system.

Manufacturers in make-to-order and mixed mode production environments must satisfy demanding customers by continually reducing lead times, increasing quality and reducing costs, all while addressing ever more stringent government regulations. To achieve a competitive advantage, companies must optimise their internal operations and the entire supply chain.

The right technology can play a major role in this. But, in our view, existing legacy and ERP solutions are not up to the task. These systems are incomplete, difficult to modify when presented with changing business conditions, and unable to furnish the visibility necessary to streamline enterprise and supply chain operations.

The answer can be found in a new class of enterprise applications for manufacturers, such as Epicor 9 . These are integrated manufacturing enterprise applications that are built on a service-oriented architecture (SOA), which incorporate modern business rules and business intelligence to furnish flexibility, interoperability and visibility. With these solutions, manufacturers can improve productivity, streamline the supply chain, reduce costs and achieve regulatory compliance, thereby enhancing customer service and increasing competitive advantage.

Antiquated systems?
Technology is clearly critical for addressing manufacturing business challenges. But much of the IT technology some manufacturers have in place is unable to support today’s requirements. For example, some manufacturers continue to use stovepipe legacy applications for ERP and other IT areas – software that cannot receive input from multiple sources but rather plot a direct path of data from point A to point B. Because these systems automate only a single business function, not an entire, cross-functional business process, they demand labour intensive processes, such as re-keying data into separate systems. Legacy systems are also inflexible. They do not permit manufacturers to change their business processes to adapt to changing business requirements. Nor do they provide full visibility across the organisation, let alone across the extended supply chain.

Other companies are using early enterprise resource planning (ERP) solutions installed before Y2K. These legacy ERPs are comprised of a large, monolithic code base that makes them difficult to change. Early solutions were not always complete. Manufacturers often purchased several separate solutions including ERP, customer relationship management (CRM) and supply chain management (SCM). With these separate systems, achieving visibility across the organisation, as well as with customers and the supply chain, required extensive integration. Business intelligence relied on a data warehouse that pulled data from these multiple systems in batch mode, resulting in delays. Developing automated workflows to streamline business processes required similar, extensive integrations.

Although older solutions are inadequate, more modern solutions such as Epicor 9 are now available that address make-to-order and mixed mode manufacturers’ requirements by delivering services that include: complete make-to-order and mixed mode manufacturing specific capabilities that simplify implementation and reduce costs; an SOA platform that improves business agility; automated, fully customisable workflows that streamline business processes and full integration and embedded business intelligence that enhance visibility.

Simplifying implementation
Discrete and mixed mode manufacturers now have the option of replacing piecemeal solutions with ones that are more complete. Modern ERP solutions incorporate a complete set of manufacturing modules on a single platform. These capabilities include advanced planning and scheduling, product configuration, field service, customer relationship management, projects, financials, product data management and e-business capabilities. They also include business intelligence that enables manufacturers to monitor key performance indicators in real time and business rules and workflows that streamline cross functional operations.

Manufacturers can find solutions that are highly customised to their requirements. For example, build-to-stock and build-to-order are completely different processes and need to be handled from within the same system as manufacturers increasingly operate in mixed modes. Modern software solutions can meet this requirement.

By purchasing a complete solution from a single vendor, manufacturers reduce total cost of ownership. By using one solution, companies can lower implementation as well as IT asset and end-user training costs. Annual maintenance fees for a single solution are likely to be less than those for multiple solutions performing the same functions. Accountability is greater when support comes from a single vendor. And all applications can share a single source of data, enhancing visibility across the organisation while eliminating the need for systems integration.

A complete and modern enterprise manufacturing solution enables companies working in make-to-order and mixed mode production environments to automate their end-to-end order processes. A solution that sits on a service-oriented architecture allows these organisations to modify their applications as needed in a highly granular fashion and to easily interact with customers, suppliers and partners over the internet. One that includes workflow enables manufacturers to streamline their cross functional business applications to improve productivity and reduce costs. One with a full complement of business specific manufacturing modules and business intelligence provides real-time visibility to enable manufacturers to quickly answer customer questions and head off issues before they can have a negative affect. Using these kinds of solutions, maketo- order and mixed mode manufacturers can improve customer satisfaction, reduce costs, enhance regulatory compliance and boost competitive advantage.