Feb 1, 2018
The Problem: Untapping the Value in Extended Enterprise Value ChainsThe Solution: Demand Driven Enterprise-wide Supply Chain Solutions by
Over the past decade there has been a great need for better technology solutions to address
global demand driven and enterprise-wide supply chains. While lean manufacturing initiatives
have instigated certain processes, such as Kanban, the reality for global manufacturers is
simple: ERP (enterprise resource planning) solutions (from NetSuite to Oracle to SAP and
others) have failed to deliver the promises needed. ERP is a critical and important aspect of any
manufacturing firm; it is not a panacea. Over the next few months we are going to explore some
of the reasons why ERP-based supplier portal solutions struggle to provide the tools required by
manufacturers to visualize, collaborate, execute and manage extended enterprise value chains.
The goal of this conversation is to address the realities, limitations, and efficacy of technology
solutions that work cohesively for global manufacturing firms operating in today's intensively
competitive and constantly changing global marketplace.
Source: Upland Ultriva
Untapping the Value Inherent in The Extended Enterprise
The Extended Enterprise is the concept that an organization does not operate in
isolation, because its success is dependent upon a complex network of third-party
Deloitte suggests that managing the extended enterprise risk with a robust, secure, and
integrated technology platform provides the appropriate level of upstream and
downstream visibility and accountability that is critical to better performance and risk
management. Higher quality information, process optimization, intelligent risk
management, and reduced costs ensure that integrating the right information into quality
data allows for better decisions.
In a timely fashion, with structured process flows, redundant/non-value-added activities
are eliminated, activities are streamlined to reduce cycle-time and improve first-passyield.
Responsibilities are correctly allocated; processes are tailored to address risks
inherent in outsourced operations with consistent application.
Most manufacturing companies depend heavily on their supply chains to deliver the
right parts, at the right time, and in the right quantities. It is typical to have more than 50
percent of a product?s components provided by suppliers. Accurate customer demand
data, both internal and external, and visibility to in-process and in-transit orders has
become essential to the overall success of enterprise value chains.
Expectations of ERP Not Met
Great expectations typically surrounding an ERP system deployment have met with great
disappointment. At the end of the day, many top-level global manufacturing enterprises
have experienced delayed implementations, excessive cost overruns, poor adoption rates,
limited productivity gains, and nominal to nonexistent return-on-investment.
ERP systems excel at providing functionality to support back-office support processes such
as general ledger, human resources administration, purchasing, inventory management,
accounts payable, and accounts receivable; finding manufacturing firms that have realized
like-type ERP system capabilities in the areas of production planning and scheduling,
production control, quality management, and supply chain management is another story.
Whether deliberate or accidental, most manufacturers with global operations admit
(after the fact) that there were unclear expectations that the selected ERP solution could
provide the tools needed to better manage all aspects of their manufacturing, supply
chain, and quality operations.
Accurate and real-time visibility, collaboration, execution, and control across extended
enterprise value chains require a demand-driven supply chain solution which is ERP
vendor agnostic. Demand-driven supply chain solutions do not negate the value
proposition of ERP but instead leverage and extend the huge capital investments made
in these systems.
By combining best practices of ERP and Demand Driven Supply Chain solutions,
customers benefit from improved on-time-delivery performance, manufacturers, supply
chain organizations, and suppliers benefit from improved responsiveness to changing
customer demand patterns.
Frank Kapper is General Manager of Upland Ultriva with over 30 years of progressive
experience leading enterprise-level Information Technology (IT) and Operational
Excellence initiatives across a diverse set of aviation and manufacturing
industries including aerospace and defense, automotive, commercial airlines,
industrial and diversified, electronics, and medical .......
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