Success Factors in Supply Chain Management, Research Paper Example

Supply chain management main function is to augment the stream of materials via an organizations supply chain. Likewise, the process is enhanced by incorporating management, planning, schedule, acquisition and completeness for optimal service levels with maximized profit. Aberdeen group report illustrated that apart from only 6% companies, almost 94% mid-sized companies have already acquired or maintaining an ERP solution. However, one more report concluded that 650 mid-sized companies are keen to find a cost effective solution. Moreover, the report also demonstrated that the mid-market is mature and a space is creating for a replacement, as the systems are not 100% complying the new regulatory requirements and compliance. 42% mid-sized companies are maintaining two or more packages of an ERP and 16% companies are maintaining 3 or more ERP packages (Zimmermann 2006).

Vendors are targeting specific industries and developing vertical solutions. Targeted industries include beverages, engineering, fashion and food. However, the vertical solutions are customized to fulfill specific requirements of these industries with no customization cost afterwards. Moreover, these vertical solutions also limits the requirements of IT resources along with a user friendly GUI. As per AMR research ‘2007 ERP Providers Serving the Midmarket’, the ERP market will continue to pace up at a growth rate of 18%, mainly via add-on functionality, vendors will increase their sales with a primary objective of developing product portfolios along with a single source of business applications for current and prospect customers.

Major players with most customers in the mid-market are:

• Exact Software with more than 180,000 customers
• Microsoft with more than 105,000 customers
• Info with more than 70,000 customers
• Sage Software with more than 55,000 customers

An ERP system enables a mid-size organization to achieve a foundation highlighting all the fundamental requirements for operating a business. Moreover, there are massive cost savings and service improvements across each and every function of the business. Previously conducted manual procedures, are now automated and production scheduling is carried out efficiently along with a well-managed inventory. Furthermore, performance of each function is monitored and measured to address any shortcomings with a holistic approach.

Supply chain management is on top of the list apart from other ERP packages, as it enhances the flow of materials via a supply chain. It is possible by managing, planning, scheduling, procuring and fulfillment functions that are utilized for optimum service levels that leverage maximized profitability. Comparatively, Business Intelligence (BI) is a new package, as it provides new opportunities for organizations to get optimal performance. A BI tool facilitates to share and analyze data extracted from a unified repository. Likewise, the data is utilized to make informed decisions by executives, line managers, human resource professionals and accountants as well. Therefore, everyone in the organization is empowered to make informed decisions, resulting in better alignment of the organization processes with strategic plans (Parlier, 2009).

Key Performance Indicators (KPIs) are values in terms of numbers that defines the current efficiency level of a process or a key goal indicator (KGI). One of the core components of a CRM is service management, as it facilitates customer service agents with customized scripts for discussion with customers along with giving them authorization for product returns along with a searching facility in a knowledge base associated with support information. Marketing has been discussed earlier. Therefore, the overall purpose of CRM is to achieve customer loyalty to gain a competitive advantage by responding to customer via better service management, target them with efficient marketing management and building a database of customers to know them better. The financial modules incorporate tools for establishing and following to budget, expense management, cash flow management, risk management and tax management.

The HCM module incorporate tools that are utilized by human resource management staff, performance management staff, payroll, time and labor tracking. However, there are some vendors providing functions for benefits administration, compensation management, salary taxes, recruitment and plans for future resources or lateral hires. The manufacturing module is a place where product differentiation is carried out. Likewise, the primary purpose is to make manufacturing operations smooth, robust and efficient. However, some vendors provide a functionality of configurable product capabilities, performing job costing and also provide an option for a bill of material (BOM) tool. Moreover, the application also enables Product Data Management (PDM), Capacity Requirement Planning (CRP), forecasting, Master Production Scheduling (MPS), Shop Floor Control and Work Order Management.

Supply chain management main function is to augment the flow of materials via an organizations supply chain. Likewise, the process is enhanced by incorporating managing planning, scheduling, procurement and completion for optimal service levels with maximized profit. Lean manufacturing limits the usage of everything associated with it. Likewise, mid-sized organizations operate in a small budget with limited resources. Lean manufacturing will make cost savings by utilizing available resources to the optimal level and therefore, saves cost. By eliminating or minimizing, over production, excess inventory, wasted motion, unnecessary consumption of processes and idle time are some of the factors that are addressed.

References

Anderson, George LaVerne. Sams Teach Yourself SAP in 24 Hours (4th Edition) (Sams Teach Yourself — Hours) . SamsPrint.

“The Total Cost of ERP Ownership in Mid-Size Companies “Web. 4/11/2012 <http://www.aberdeen.com/Aberdeen-Library/4362/SI-erp-cost-mid.aspx>.

Parlier, G. H. (2009). Transforming army supply chains: An analytical architecture for management innovation. Air Force Journal of Logistics, 32(4), 64-77.

Zimmermann, Roland. Agent-Based Supply Network Event Management . Boston, MA: Birkhauser, 2006. Print.