Analysis And Development

ERP Inventory and Supply Chain: 7 Tips for Successful ERP-Supply Chain Management Integration

In the past, integrating enterprise resource planning (ERP) and supply chain management (SCM) seemed to be the unicorn of inventory and supply chain control. In theory, it was a great idea. In practice, it was much more difficult to pull off.

Recent advancements in both SCM and ERP technology have made integrating them a much more viable possibility. In fact, some would even say that it’s no longer just a possibility but a requirement. When done properly, the result is greater visibility, reduced costs, and increased customer satisfaction.

In a time when lean manufacturing is essential to a company’s survival, getting the integration between SCM and ERP right is critical. Here are some tips to ensure that that integration goes well.

1. Map the Supply Chain BEFORE Integration
This may seem like a basic tip, but too often, organizations try to integrate ERP into their supply chain without mapping the elements within that chain. Look at inventory supplier, customers, and specific challenges that might interfere with supply chain before beginning integration. This enables the business to see the full picture, making it more likely that all of the pieces are in the right place.

2. Involve Management and Employees in the Decision-making Process
It’s not even a question of whether management should be involved in the decision-making process when considering an ERP solution or the integration of that solution into the supply chain, but involving the right management is essential. Consider bringing in managers and executives from other departments that are effected by the integration. This allows a more holistic view of how integrating ERP and SCM will affect the organization.

Likewise, involving the “in-the-trenches” employees in the decision-making process will help to ensure that the business chooses the right solution to meet the needs of those who are actually doing the work. It’s one thing to have a 10,000-foot view of the process but something completely different when you actually have to use the applications that are designed to make the whole process flow more smoothly.

3. Select an Industry-specific Solution
Not all ERP and SCM solutions are created the same. There are hundreds of options to choose from that run the gamut of industries and organizational needs. Try not to select solutions that require extensive customization. Instead, look for something that meets existing needs with minimal customization and that can be implemented incrementally without disrupting existing workflows.

4. Integrate the Solution Incrementally
One common mistake is that businesses make all of the changes necessary when integrating SCM and ERP at one time. This is a recipe for disaster. A better approach is to focus on the core needs of the organization and implement the integration incrementally around those needs, rolling out one function at a time and making sure that function is working properly before moving on to the next one.

5. Establish Relevant Metrics
The success or failure of an integration is tracked through the metrics used to be determine what works and what doesn’t. Those metrics are useless if the wrong functions are being tracked. Instead, determine what information is relevant to the process, and the use those data to create metrics that are truly meaningful and can point to where improvements can be made.

6. Communicate Expectations
Often, the success or failure of any application or integration is determined by how well expectations are communicated. Make sure that everyone involved in the integration of the SCM and ERP systems understands what the expectations are before the integration begins. Then, maintain open lines of communication and, if necessary, remind team members of the expectations that should be met.

7. Develop Training Around Best Practices and Capacity Building
Simply integrating SCM and ERP is not enough. Users also need to be trained to use the new systems, and that training should be built around the best practices that will ensure that the systems are successful. Another part of that training should be capacity building—helping users to increase the capacity of the system as well as their own abilities to achieve more.

Integrating SCM and ERP is the key to achieving lean manufacturing, but just conducting the integration isn’t enough. It should be done in such a manner that the core capabilities of the organization are improved upon in such a way that what really matters—what customers do and do not want—become clear to the organization and that the integration meets those needs.

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