Increasingly, supply chain managers are looking to automate their supply chain management (SCM) efforts in order to do more with less.
Automated supply chain management processes and on-demand solutions provide efficient control of every aspect of the supply chain, making it more agile and easier to manage. Further, on-demand solutions can deliver a tangible return on investment (ROI), which can be captured in a surprisingly short period of time.
How on-demand solutions work
Unlike on-premises solutions that are hosted on the company's servers and employees' computers, on-demand or software-as-a-service (SaaS) ERP and SCM applications are hosted by a third party and accessed via a web connection. SaaS/on-demand ERP and SCM systems offer faster and easier implementation and frequent automatic updates and upgrades, for a smaller investment than an on-premises solution. By and large, these solutions are also more user-friendly that the traditional on-premises ones.
Traditional ERP integrates all departments (e.g. procurement, finance, distribution, and inventory control) and enterprise functions into a single system, retrieving information across departments as needed. ERP systems also support interdepartmental communication. An on-demand SCM solution integrates the functions of the various organizations concerned in the supply chain.
An Epicor article lists the four key elements to a SCM solution:
- Supply Chain Planning: Establishes the parameters within which the supply chain will operate
- Supply Chain Execution: Execution-oriented software applications for effective procurement and supply of goods and services across a supply chain
- Supply Chain Monitoring: Reviews supply chain activity in real-time
- Supply Chain Measurement: Compares the actual activity against targets
With an on-demand solution in place, sharing information becomes easier. In turn, it facilitates teamwork as one department can track certain information accessing the other departments' modules thanks to the ERP's integration feature. ERP systems also help telecommuters stay tuned in to what is going on in their department, and communicate and work with peers when working offsite.
On-demand SCM brings a variety of benefits, including:
- Spanning the design, planning, execution, control, and monitoring of supply activities to create net value
- Building a competitive infrastructure
- Leveraging worldwide logistics
- Synchronizing supply with demand
- Measuring performance globally
- Integrating real-time visibility into operations
In some cases, companies have already deployed an ERP system before installing an SCM system, in which case the SCM system will use existing ERP data to smooth adoption and integration, especially if both solutions are on similar technology platforms.
Let's discuss the benefits you've found in on-demand ERP and SCM solutions. How have they added value to your organization?