To move to true supply chain management, companies must leverage enterprise resource planning (ERP) integration, flexibility and agility together with customer-facing front office systems.
According to Simon Carpenter, product manager - logistics at SAP Southern Africa, it is becoming increasingly difficult to extract any sort of lasting competitive advantage from ERP systems. "They, do however, form a vital and fundamental part of the architecture of a true supply chain solution because they are absolutely vital to achieving execution excellence". The emphasis in the future will be on integrating customer-facing front office systems and supply chain coordination and optimisation.
"In the past when integration was spoken about, the main focus was on integration between functional areas of the business - as reflected in typical ERP applications such as sales order entry, financials and inventory management. However, this is becoming an outdated concept as most companies already understand the need for this type of integration for process-oriented efficiencies."
Leading enterprise business solution, SAP R/3, provides a framework-based backbone that eases integration with complementary components that provide essential functionality within most supply chain environments. Traditionally these have always been difficult to tightly integrate.
Such components include: CAD products, (supporting the entire product lifecycle, reducing time to market and improving customer service); integration of the Internet with core business processes (enabling the extended enterprise and expanding the use of ERP systems within the enterprise by deploying; employee self service applications) integration of shop floor systems (to improve accuracy and responsiveness) and integration of the desktop to improve usability and flexibility of the ERP interface.
"SAP has also recently announced APO (Advanced Planning and Optimisation), providing the foundation for true next generation ERP."
APO provides a supply chain cockpit that allows supply chain planners to graphically design and monitor all arcs and nodes of their supply chain architecture. It incorporates advanced optimisation algorithms and heuristics allowing the company to develop optimal constraint based plans. "Perhaps the most exciting aspects of APO are LiveCache and the APO`s tight integration with SAP or other systems."
LiveCache is SAP`s revolutionary memory resident architecture that utilises 64 bit technology and allows APO to make real-time evaluations for available-to-promise and capable-to-promise decisions across multiple plants and levels of BOMs.
Tight integration with the SAP solution ensures that optimised plans can be realised immediately in the ERP system. This significantly enhances the organisation`s responsiveness and greatly reduces the total cost of ownership normally associated with achieving this level of integration.
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