For the past decade, organizations have spent billions of dollars and countless worker-hours installing huge integrated software packages known as enterprise resource planning (ERP) applications. Now many manufacturing companies are realizing that the infrastructure they spent years creating is deficient on their plant floor. The ERP systems of the 1990s have become a liability for many manufacturers because they perpetuate some of the legendary material requirements planning (MRP) problems such as complex bills of materials, inefficient workflows, and unnecessary data collection. A new manufacturing model has emerged that’s taking the place of the traditional MRP model. It’s called Lean, Flow, or Demand-Pull.
Top-tier vendors offer less-expensive, modular, and hosted
versions of their software.
A growing number of small and midsize companies are deploying enterprise resource planning applications. In the past, many of these companies, typically with annual revenue of less than $500 million, didn't have the budget or time to consider implementing large, complex, and expensive ERP packages. But with marquee software makers such as Oracle, PeopleSoft, and SAP creating less-expensive, modular, Web-architected, and hosted versions of their ERP software, a lot of smaller companies are rethinking their options.
Over the past decade, the information technology (IT), electronic components (EC), and semiconductor manufacturing (SM) industries have seen unprecedented growth. New products and services are fueling continued expansion, led by investments in science and technology and demands for high productivity. IT, EC, and SM industry supply chains are now more complex and dynamic. There is a real need for an effective, fast communication and transaction backbone to satisfy unique and growing e-business needs.
Most IT professionals have faced the following scenario at one time or another in their careers: The business sees application software as something that can be changed rather easily to create operating efficiencies and also allow unbounded agility. Unfortunately, this expectation is especially difficult to dispel for supply chain management (SCM) technologies. Explaining the intricacies of SCM technologies to nontechnical audiences has been a major challenge. Yet, this nontechnical executive audience frequently makes decisions that adversely affect the realization of business benefits from SCM technologies. Not understanding the limitations of agility provided by SCM technologies contributes to unrealistic expectations of the application software. But by using a drill-down and decoupling approach to SCM functionality, companies can understand its agility and efficiency limitations and effectively use their SCM technologies.
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