ERP systems in the early nineties came into the marketplace offering new breadth and integration. They took advantage of advances in information technology—notably relational database technology, software tools, client/server systems, and advanced operating systems. These new era systems were intended to control all of the information related to the “enterprise,” including customer, product, process, production, inventory, employee, financial data, and more.
Like MRP systems, ERP systems calculate material requirements, they schedule replenishment orders, and they suggest rescheduling open orders when orders are not in synchronization. They may also take into consideration capacity constraints when planning production if an advanced planning and scheduling (APS) system is used.
Full implementation of ERP is often costly, highly complex, and time-consuming. This created a demand within the manufacturing sector for a more rapid, less costly implementation approach. ERP system providers introduced templates to speed up implementation. Since the templates were designed with best practices for particular industries, it is debatable how (or if) a company could gain a competitive edge in its marketplace using the same templates that all its competitors also had access to.
Another issue with best practice templates is that they may sound like nirvana, but very few organizations take the time to rethink what this really means. Consequently, most companies have come to casually accepting the compromises and trade-offs that templates require. Preconfigured templates allow faster system deployment and faster benefits. Processes can always be refined at a later date. This has led to the rapid method of implementation, but that often postpones the effective redesigning of business processes that really should precede an ERP implementation. Nevertheless, running a manufacturing company today with old, conventional MRP II logic won’t keep a company very competitive. The old systems just don’t fit anymore with their imprecise information and a reaction time that is too slow for a company striving to become a World Class manufacturing enterprise.
Today’s advanced ERP systems continue to incorporate more outwardly facing functionality such as supply chain management, customer relationship management and supplier relationship management systems. In addition, software vendors are working hard to appeal to small to mid-sized manufacturing companies. They are also adding value in the areas of PLM product data management, quality management, field service modules, and Internet capabilities.
Advanced planning and scheduling (APS) systems vary a great deal in their functionality and interaction with other systems, causing confusion as to what APS really is. The more advanced APS modules generally include constraint models for both materials and capacity. The latest technology has the capability to model not just a production plant’s operation, but an entire supply chain, including suppliers, multiple production plants, and complex distribution chains. This overview of the development of enterprise resource planning systems is necessarily a bit simplistic and leaves out much detail.
The marketplace’s advancing technology, vendor competition, the sheer complexity of the systems — has contributed to a string of terms and acronyms that few vendors — let alone their corporate customers — could agree on. All the more reason for manufacturers today to let their own business goals drive ERP decisions. Anybody can call their system offering enterprise resource planning, advanced planning and scheduling, or supply chain management, but the system itself must contain all the necessary elements to fully support a fast and more competitive supply chain in your specific environment or it just isn’t worth the investment.