To fully understand how an ERP system can create this tunnel vision for a manufacturer, shifts in the manufacturing sector in developed nations needs to be explained.
The trend of offshoring manufacturing processes has brought different economies together from countries that would not otherwise conduct business with one another. This has caused the manufacturing world in developed nations to shift its focus to distribution, which has led to supply chain management (SCM)—please refer to the article From Manufacturing to Distribution: The Evolution of ERP in Our New Global Economy.
However, there is a new trend to consider: manufacturing has started to revert back to developed nations due to the rise in the price of fuel and issues of quality control. Thus, even though the shift in developed nations is heading toward more distribution-type activities within the manufacturing sector, and even though discrete manufacturing is still a heavy economic sector, changes in the amount of products being produced can be difficult for manufacturers to deal with, as they need to accommodate both logistics and manufacturing activities.
The truth of the matter is that most industrialized nations have a large manufacturing base. And even though many manufacturers have outsourced their manufacturing to developing nations, these firms need to stay flexible if changes in either the local or international economies occur.
How can manufacturers deal with this ever-changing climate? How can ERP vendors help take the blinders off for manufacturers and allow them to become flexible enough to deal with these global challenges?
How to Free Yourself from Tunnel Vision!
Manufacturers must examine their business operations in the context of the global manufacturing environment and properly evaluate their software tools. Manufacturers faced with the complexities of manufacturing activities that are teetering back and forth from location to location must be able to track and manage the global business operations. This means that the enterprise software in place must be flexible enough to efficiently handle shifts in operations between heavier manufacturing to distribution, or vice versa.
To achieve this flexibility, something more than the traditional discrete ERP system is needed: a combination of SCM and business intelligence (BI) software, together with an ERP system.
SCM Software
SCM software is not only of benefit to global enterprises. It is also important for manufacturers that need to forecast demand for products; manage warehouse inventory, supplier relationships, and transportation vehicles; and track goods.
Integrating SCM software with an ERP system enables the manufacturer to have an "ERP for distribution" system. The main advantage of SCM software is that it gives discrete manufacturers the flexibility and visibility they need to know what is happening in terms of logistics. SCM software also helps manufacturing operations set up in multiple locations, through integrated warehouses and high-level demand planning. In addition, SCM software can pinpoint the nearest location to procure components for a lower cost, which can also help in terms of quality issues due to the proximity of the manufacturing plant.
BI software
Two other major issues need to be addressed for a manufacturer to become truly flexible: compliance and real-time information.
Compliance issues introduced by such regulations as the US Sarbanes-Oxley Act (SOX), import and export duties, international trading tariffs, etc., become even more complex when it comes to the business of offshoring. To handle these issues and standards properly and effectively, BI software can help a company get a grip on the amount of information passing through it, allowing improved visibility and transparency.
The trend of offshoring manufacturing processes has brought different economies together from countries that would not otherwise conduct business with one another. This has caused the manufacturing world in developed nations to shift its focus to distribution, which has led to supply chain management (SCM)—please refer to the article From Manufacturing to Distribution: The Evolution of ERP in Our New Global Economy.
However, there is a new trend to consider: manufacturing has started to revert back to developed nations due to the rise in the price of fuel and issues of quality control. Thus, even though the shift in developed nations is heading toward more distribution-type activities within the manufacturing sector, and even though discrete manufacturing is still a heavy economic sector, changes in the amount of products being produced can be difficult for manufacturers to deal with, as they need to accommodate both logistics and manufacturing activities.
The truth of the matter is that most industrialized nations have a large manufacturing base. And even though many manufacturers have outsourced their manufacturing to developing nations, these firms need to stay flexible if changes in either the local or international economies occur.
How can manufacturers deal with this ever-changing climate? How can ERP vendors help take the blinders off for manufacturers and allow them to become flexible enough to deal with these global challenges?
How to Free Yourself from Tunnel Vision!
Manufacturers must examine their business operations in the context of the global manufacturing environment and properly evaluate their software tools. Manufacturers faced with the complexities of manufacturing activities that are teetering back and forth from location to location must be able to track and manage the global business operations. This means that the enterprise software in place must be flexible enough to efficiently handle shifts in operations between heavier manufacturing to distribution, or vice versa.
To achieve this flexibility, something more than the traditional discrete ERP system is needed: a combination of SCM and business intelligence (BI) software, together with an ERP system.
SCM Software
SCM software is not only of benefit to global enterprises. It is also important for manufacturers that need to forecast demand for products; manage warehouse inventory, supplier relationships, and transportation vehicles; and track goods.
Integrating SCM software with an ERP system enables the manufacturer to have an "ERP for distribution" system. The main advantage of SCM software is that it gives discrete manufacturers the flexibility and visibility they need to know what is happening in terms of logistics. SCM software also helps manufacturing operations set up in multiple locations, through integrated warehouses and high-level demand planning. In addition, SCM software can pinpoint the nearest location to procure components for a lower cost, which can also help in terms of quality issues due to the proximity of the manufacturing plant.
BI software
Two other major issues need to be addressed for a manufacturer to become truly flexible: compliance and real-time information.
Compliance issues introduced by such regulations as the US Sarbanes-Oxley Act (SOX), import and export duties, international trading tariffs, etc., become even more complex when it comes to the business of offshoring. To handle these issues and standards properly and effectively, BI software can help a company get a grip on the amount of information passing through it, allowing improved visibility and transparency.
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