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Study: Is Your Focus on ERP Is Holding Your Business Back? Three Steps to Evaluate and Improve

Technology is the way of the future in the supply chain industry, and that technology seems to be evolving every day. But in your quest to stay up to da...

Frazer Jones
|Jun 10|magazine9 min read

Technology is the way of the future in the supply chain industry, and that technology seems to be evolving every day. But in your quest to stay up to date on the latest software and implementations, have you lost sight of what’s really important?

A new study from Supply Chain Insights suggests that a lot of companies are spending more attention on high-tech enterprise resource planning (ERP) systems than any other part of their supply chain operations – the problem is, that’s a trend that is actually hindering those supply chains from reaching their full potential.

“Teams claim that they are building end-to-end supply chain processes, but we do not find that this is true,” reads the report. “Despite the growing need to automate the extended supply chain, the focus of most companies is on enterprise automation. The process flows of the extended supply chain are dependent on spreadsheets and Electronic Data Interchange (EDI). It is not sufficient.”

As businesses focus on technology and automation to support their growing supply chain, other issues are falling by the wayside and combining with current technology’s own shortcomings to become major problems, resulting in a loss of visibility and agility overall – while 95 percent of businesses involved in the study expressed that they consider a highly agile supply chain is of top importance, only 38 percent of those were actually meeting their own goals and running an agile supply chain. Similar importance vs. performance gaps were noted across the board for visibility as well. The study suggests much of this may be traced to ERP overreliance. “The largest gaps for ERP initiatives by supply chain leaders are in the areas of transportation in the extended supply chain,” reads the study. “Manufacturing strategies for supply chain visibility within the enterprise can be solved through ERP initiatives. The rest cannot be.”  

How can you avoid this pitfall and pull ahead? Supply Chain Insights has three recommendations for businesses who want to improve their supply chain operations:

1. Define Your Priorities – Before you can improve your supply chain, you have to have a handle on what you’re trying to get out of your supply chain in the first place. That means taking the time to define your goals. “While EDI is effective in the management of transactional date, it is important for companies to document requirements for supply chain visibility for transportation, sourcing and manufacturing,” says the study.

2. Be Clear on What You’re Doing Right Now – Of course, trying to define your goals for the future can be ludicrous if you don’t have a proper handle on where you are right now. As the study has proven, many companies have spent so much time focusing on one aspect of their operations that they have fallen well behind in other goals, so in order to improve you first need to take a hard look at your current operations. “The documentation of the ‘as is’ condition is usually eye-opening,” says the study. “Most companies overstate their current performance.”

3. Make Sure Your IT Strategies are Aligned with Your Future – Now that you know where you are and where you want to go, you can build a sound strategy and make sure that everything is properly prioritized. “This needs to include the rationalization of ERP spending, the maximization of private networks (where available) and the qualification of new forms of public supply chain visibility solutions,” reads the study.

 

[Read the Full Report: http://supplychaininsights.com/supply-chain-visibility-in-business-networks/]