The similarity of supply chain and enterprise resource planning (ERP) apps, particularly given their convergence in the past, can be confusing. However, the differentiators may be stabilizing.
Any enterprise that's concerned with transforming one kind of material into a different finished good is, on some level, dependent on a supply chain. Supply chains are concerned with directing the flow of products or their components, the flow of information about the products, and payments between suppliers, manufacturers, retailers, and consumers.
Supply chain activity basically consists of planning the supply chain, obtaining suppliers for the goods and services that make up a product, manufacturing the product, delivering it, and operating a system to handle financials and returned goods.
Traditionally, supply chain activities function at three levels. Strategic-level tasks include such actions as creating and optimizing an entire supply network, managing product lifecycle activities, and making sure your IT infrastructure can adequately support supply chain activity. At the tactical level are planning and overseeing the various processes of each step, organizing and optimizing the logistics of goods movement, and managing inventories. At the operational level are tasks such as production scheduling, demand planning, accounting, and managing order processes and customer relationships.
Setting Some Supply Chain Borders
Supply chain management (SCM) functions can be handled by an application designed for that specific function, but by SCM's very nature, can also overlap into application software types that handle portions of the flow. This can sometimes generate some confusion about where supply chain applications and, for example, enterprise resource planning (ERP) apps, begin and end.
"From my perspective, the main differentiator between [supply chain and ERP apps] is a simple one," explains Carol M. Elliott, director of business development at LANSA, a well-known vendor of supply chain application-building tools for IBM i. "ERP systems focus on streamlining and optimizing internal business processes across an enterprise, and supply chain apps focus on streamlining and optimizing external business processes with other downstream customers and upstream suppliers."
"For example, an ERP system has information and built-in processes to facilitate the efficient procurement, manufacture, and packaging of product while utilizing an optimal mix of resources and material, from both the financial and human resource perspectives. Supply chain systems focus on the efficient communications of critical ordering, invoicing, shipping, and product information with key business partners that are outside of an organization. Therefore, an essential part of supply chain applications is to easily and quickly communicate to business partners—both customers and suppliers—in a commonly understood format and method. The generation, tracking, fulfillment, and payment of orders is crucial. In addition, the ability for business partners to collect, understand, and disseminate this information to their own internal systems is a critical component of any supply chain application. Finally, the ability to share key performance indicators (KPIs) and scorecarding with external business partners is vital to meeting shared business objectives," Elliott explains.
The End of Convergence?
Over the past 20 years, ERP and supply chain apps have converged somewhat because of the close relationship of their functions. However, that convergence may have reached a turning point, according to Elliott.
"I believe that convergence has gone as far as it can and may actually begin to diverge due to fundamental changes in the marketplace that are underway at this time," Elliott notes. "By all accounts, we are on the cusp of what has been coined as the 'consumer age.' Consumers have many more options to purchase products, and they do so in a variety of manners—traditional brick-and-mortar retail stores, online via ecommerce sites, and increasingly, via mobile apps on smartphones. This has been defined as 'omni-channel' retailing. Additionally, consumers are demanding more information before making purchases. Trends toward better nutrition and sustainability are top of mind in most consumer households today. Finally, the regulatory demands for traceability, product packaging, and labeling information and local selling restrictions are putting pressure on traditional supply chain and ERP applications to keep up. Therefore, this maturity or equilibrium may not be bad as long as supply chain systems and ERP systems act together as a well-designed whole. Each plays a critical role. Without certain supply chain capabilities, a business may not be able to even compete in a marketplace."
Are Data Flows Superseding Product Flows?
If we're now in a post-convergence era for supply chain and ERP apps, the emphasis is swinging toward maximum quality in the data part of the "flow."
"As consumers continue to change the way they shop and buy products, demanding more and accurate data about those products and retailers rush to meet competitive pressures, the requirement for a 'single source of the truth' as it relates to product data has never been more important. The adjacent trends of 'big data' analytics and 'omni-channel' retailing add even more impetus to the gathering, cleansing, and distribution of accurate, complete, and rich product content," Elliott relates.
"Essential for all the trends stated above is data quality. The need to access, distribute, and exchange accurate, quality data across an enterprise, especially as it relates to products, is critical in industries such as retail and healthcare. The supply chain implications presented by bad data are documented and well known. The implications for sales and customer retention are only now being felt as consumers' demand for more information regarding products has become a competitive differentiator. In a recent study, it was estimated that 40 percent of all customers consult three or more channels before making a buying decision," she notes.
"With approximately 75 percent of U.S. GDP being driven by consumer buying activities, having the right product information at the right time and the right place has never been more critical to an organization's bottom line. With the ability to buy products anytime and anywhere, from a variety of sources, by definition, increases the complexity of what supply chain applications have to perform," Elliott concludes.
If you're in the market for a supply chain app, the following product information can help you find a software package that meets your needs.
Please be aware that the product descriptions are simply summaries. You should check the hot links to vendor Web sites and consult with each vendor for a more complete listing of available features for each product.
And as always when looking for products or services, be sure to check the MC Press Online Buyer's Guide.
Supply Chain Applications for IBM i
American Software
Enterprise is an integrated suite of applications. The Planning portion includes facilities for demand forecasting, inventory planning, and distribution requirements planning. Other suite features include functions for bills-of-material management, capacity planning, engineering change, master scheduling, production scheduling, financials, and logistics (order processing, inventory control and accounting, purchasing). In addition, the suite interfaces with American's e-Intelliprise e-business solution.
Business Computer Projects
Accord is specifically geared to retail and wholesale distribution companies. Accord provides complete head office and branch functions for actions such as purchasing, inventory, warehousing, point-of-sale, and accounting. The Accord suite also includes versions customized for food and beverage wholesalers and retailers.
ComMIT Systems
ComMIT offers four integrated products that make up a planning, scheduling, and supply chain management system for use in synchronizing production activities and optimizing use of manufacturing resources. The modules are deployable standalone or together. Users can also integrate them with legacy MRP II, ERP, or other information systems.
Computer Software Solutions
Compsoft ERP is an integrated suite for managing company resources in the wholesale distribution and retail sales industries. Its 14 modules include cash reconciliation, financials, fixed assets, human resources, inventory control and purchasing, order entry, payroll, point of sales, and sales analysis. The product offers a single database structure, customization options, and unified communications tools.
DPS
DPS' ERP solution offers a suite of apps that include accounting, order-processing, sales analysis, purchasing, inventory control, and service-management functions.
DPS' hosting service provides Power Systems-hosted distribution and supply-chain applications.
eC-LINK.com
eC-LINK ERP is designed for companies in distribution or light manufacturing industries. In addition to normal ERP functions, eC-LINK ERP offers customization features and tools for converting legacy data, helps users achieve nearly paperless environments, provides automated stock replenishment reporting, and enables stock availability views across multiple locations. It also supports multimedia and multiple national languages.
EPICOR
EPICOR Enterprise Resource Planning
EPICOR ERP supports discrete manufacturing operations with supply chain management, production management, planning and scheduling, project management, human capital management, and financials.
HarrisData
HarrisData ERP Manufacturing creates an ERP environment that helps users manage all facets of manufacturing, including integrated, Web-based customer and supplier self-service, as well as kanban replenishment. HarrisData's ERP application also interfaces with the company's accounting, distribution, and human resources applications.
IBM Corporation
IBM Corporation and SAP have collaborated on an SCM service package that combines SAP's SAP ERP application suite and the SAP NetWeaver integration platform, IBM consulting services, and elements of the IBM WebSphere, Tivoli, Lotus, and DB2 Universal Database products. The suite addresses SCM planning, execution, coordination, and collaboration and runs on multiple platforms besides the System i.
IFS
IFS' Distribution/Supply Chain application supports both order-based and orderless production, offers Web portals for customer/supplier collaboration, and can handle mixed supply modes and multiple supply models.
Infor
Infor offers multiple ERP applications, but LX is specifically designed for the IBM i and is modeled on the legacy BPCS application. The product is aimed at mixed-mode and process manufacturers and focuses on helping users improve core business processes such as channel management, customer relationships, financial management, logistics, manufacturing, and supply relationships.
Infor SCM is a suite of the former Lawson Software line of supply chain management software, each member of which is tailored to a specific industry type.
Infor Supply Chain Planning helps enterprises observe and factor in most aspects of building a supply chain, including metrics, key performance indicators, costs, and margins. Planning modules include sales and operations, demand, scheduling, and supplier exchange.
Island Pacific
Retail Supply Chain Management
Retail Supply Chain Management is supply chain software tailored to retail operations and includes functions for replenishment, core merchandising, store operations, sales and promotions, inventory auditing, and warehouse operations.
JDA
JDA eight combines 30 separate applications into a suite for handling all aspects of supply chain operations. Example functions include supply chain optimization and analytics, replenishment and fulfillment, and supplier relationship management.
LANSA
LANSA Commerce Edition is primarily a Web-enablement solution that installs on top of custom or third-party ERP apps. When combined with one of those and other LANSA products, user-company developers can create a system that supports many SCM processes.
Oracle Corporation
JD Edwards EnterpriseOne is a suite of integrated application modules that can support diverse business operations. Modules include asset lifecycle management, financials, customer relationship management, human resources, manufacturing and engineering, order processing, supply chain execution, and supply chain management. It supports a variety of operating systems, databases, and middleware, which makes it well-suited for larger, multiplatform enterprises.
JD Edwards World is an ERP application built expressly for System i SMBs and focuses on financials, distribution, human resources, and manufacturing management. It incorporates built-in interfaces to Oracle solutions for customer relationship management and demand management. World features customizable business-process templates that users can adapt to their existing practices.
SAP
SAP's ERP application (formerly mySAP) is part of the company's SAP Business Suite product line. As well as standard ERP operations, SAP ERP controls areas such as business performance management, corporate services, end-user service delivery, financials, and human capital management.
Supply Chain Management Solutions
SAP offers a suite of integrated SCM solutions that can also operate standalone. Suite members include apps for sales and operations planning, manufacturing and supply planning, demand management, warehouse management, track and trace operations, supply chain analytics, mobile solutions, and manufacturing integration and intelligence.
Service Information Access
Common Sense provides ERP, supply chain management, customer relationship management, and human-resource management functions in an application designed to integrate with custom and third-party software. It lets users build a data warehouse to support ERP functions such as back-office accounting, distribution, manufacturing, project services, transportation, and warehousing.
Software Concepts
DS90 is an ERP tailored for light manufacturing in SMB-sized companies. The light manufacturing module helps enterprises coordinate production, kit assembly, and component processing into production of a finished product. In addition, DS90 includes functions for commission management, financials, inventory control, order management, and sales analysis.
Xdata Solutions
GXD is a suite of graphical enterprise applications designed for companies of up to $500 million annual revenue engaging in manufacturing and distribution. The ERP app is a menu-driven system that handles supply chain, financials, inventory management, labor reporting, master scheduling and material requirements planning, order processing, pricing, product configuration, purchasing and receiving, returned-goods authorization, and routing processes.
Xperia
Xperia's EXECUTIV is a suite of ERP-related solutions that include integrated applications for managing supply chains, production and distribution, customer relationships, financials, e-commerce, and business intelligence. The company's offering also includes ADAPTIV, which is a combined IBM i hardware and software package with a focus on EDI.
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