Over the past ten years a large number of companies ranging from SMEs to Blue Chips have been running out or upgrading their Enterprise Resource Planning (ERP), Distribution Requirements Planning (DRP) and High level Supply Chain Planning options (APS). You'll find a variety of good reasons for this intense activity, which range from the need to combine IT following an exchange, through to the need to increase the IT capability so that you can implement a particular supply chain strategy. Browse here at details to read the reason for it.
When the dust settles following the implementation many firms, having spent a great deal of time and income, are left with a really rigid IT option whose key planning principles are directed in-the thinking about the late 60s, and not compatible with the agile, versatile, supply chain processes necessary to compete today.
It appears that our knowledge of what is required to create a competitive supply chain has changed significantly over the past 4-0 years, though the range of IT solutions available to support our dreams has not.
This white paper examines the key components required to build a successful and low cost supply chain, how many IT choices fail to support these key maxims and how a new approach to planning may enable the benefits of Lean Manufacturing without wasting your IT investment.
The problem with Forecasts
Ostensibly, many ERP/DRP systems give a very effective detailed platform, which the majority of a small business operations are supported, from Finance to HR. To get alternative ways to look at it, you can check-out: warehouse logistics & supply chain management. Where they're weak nevertheless, is in the provision of planning tools. Most come equipped with a fundamental MRP (Material Requirements Planning) engine, and the more advanced ones may possibly supplement this with predictive safety share planning or re-order point reason, frequently underneath the guise of an Advanced Planning Systems (APS) element. Or to put it another way, your multi-million dollar IT super-car features a tractor engine hiding underneath the hood. For more information, we know you check-out: intangible. The fundamental flaw with all of these MRP variants is that the starting point for all calculations can be a Forecast.
Many planners realize that the best Forecasts are 70% accurate at best. APS methods might buy a few percentage points of progress in exchange for a hugely disproportionate economic investment, but have flatly failed to deliver the benefits. The real problem is the fact that MRP then compounds the situation employing this forecast to precisely raise planned orders and set predictive levels of safety stock. What this does is force wildly unexpected and unpredictable levels of cost, work and stock into our supply chain.
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