Obliterated agility
ERP and Supply Chain Planning applications are inappropriate as a basis for community collaboration, as they require rigid adherence to specific internal process flows
In many companies the genesis of supply chain collaboration was the introduction of Enterprise Resource Planning or ERP systems. Assuming the organisation was wealthy and healthy enough to stand the pain of the implementation, it emerged with tightly coupled processes that spanned the enterprise. These synchronised operations linked various departments, so that the impact of actions in one area could immediately be seen in other, related areas. This aided decision-making, resource management and financial planning.
Unfortunately it also obliterated agility, as any deviations from the underlying process flows, required reconfiguration of the ERP system and this was not something to be done in haste. Nonetheless, successful implementations have delivered clear benefits, which is probably the only remaining incentive for those enterprises still trying to finish theirs.
Whilst this approach was useful in bringing together large corporations with several autonomous divisions or departments, it did little to enhance collaboration with external trading partners and suppliers. The need for collaboration became apparent as many organisations ‘restructured’, ‘downsized’ and ‘outsourced’ their operations through the late 1990’s. It was of little use to have efficient internal processes, if key operational processes were now ‘external’ and run by someone else.
Specific systems were also developed to support the activities of supply chain planning and optimisation. The theory being that sophisticated software could support the planners who had to balance the demands of the manufacturing operations, against the supply available from the sourcing teams. These activities also extended into areas such as transportation and inventory management. In many cases, extravagant claims were made regarding the potential savings that would result from the use of such systems. However, they all depended upon having clearly defined boundaries of implementation and complex, deep integration with any other related systems. This last factor increased the cost of implementation dramatically and as with ERP, severely limited agility and adaptability.
The constraints of these systems have been recognised for a couple of years now and as a result, a number of solutions have emerged to either enhance or compliment them. Most of these have been in the area of collaborative planning and manufacturing and have also begun to support the concept of the ‘extended enterprise’.
At this point, life begins to get very interesting.