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How customising ERP software can improve the supply chain

Follow @SamJermy and @SupplyChainD on Twitter.Limitations in the customisability of on premise ERP is a key culprit behind supply chain inflexibility. O...

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|Feb 11|magazine11 min read

Follow @SamJermy and @SupplyChainD on Twitter.

 

Limitations in the customisability of on premise ERP is a key culprit behind supply chain inflexibility. Organisations are forced to adapt their business processes to the constraints of their software, rather than adapting the software to their business processes. Yet for a growing number of enterprising firms, cloud ERP is changing the equation.

Rich customisability accessible to business users is a defining characteristic of a cloud ERP solution, enabling process changes in days rather than the months typical with on premise systems. Innovators are taking advantage to adapt a wide range of processes, such as demand planning, work orders, approvals, bills of material, sales orders and more.

Collectively, various customisations to optimise supply chain processes can deliver tremendous value. Savings in costs and time are the most obvious benefits, but not the only ones. Customisations can enable companies to improve access to mission-critical data and extend it to partners as appropriate, heightening collaboration and fuelling innovation. Customisations help companies build a highly visible single system of record that strengthens security and compliance with external and internal requirements.

Customisations can empower business users and the company as a whole to function more creatively and effectively, and channel savings into innovation and customer service. Real-world companies have unlocked the potential of customisations in cloud ERP to gain competitive advantage:-

CMP Corp. For the world’s largest independent supplier of replacement compressor parts for HVAC and refrigeration equipment, customisability in cloud ERP has been instrumental in a Lean manufacturing initiative that has helped reduce back orders by 90 percent, slashing production lead time from 85 to 10 days and reduce crankshaft production costs by 25 percent.

iAutomation. A supplier of machine automation products and services to more than 5,000 customers, iAutomation has built more than 240 customisations into its cloud ERP solution to optimise inventory, manufacturing, sales and more. The company has improved on-time manufacturing delivery from 70 to 95 percent, saved $1.3 million in excess inventory and increased cross-sell revenue by 200 percent.

Epec Engineered Technologies.  A maker of custom-printed circuit boards, custom battery backs and other products in the electronics industry, Epec credits cloud customisability for enabling it to streamline workflows on a global basis across facilities in the US, UK and China. It helped to introduce an innovative configure-price-quote (CPQ) online tool for customers.

Lorie-Lyn Fernandez, Epec IT Manager, said: “With our previous on premise ERP, it was hard to create the custom forms, workflows, dashboards and reports that are crucial to running our business.

“With NetSuite, we were able to build all our necessary workflows and customised order management across the web through sales, fulfilment and accounting.”

Doing Business at Lightspeed

Cloud ERP customisability was a core element of an ambitious initiative to introduce demand-driven material requirements planning (DDMRP) at Lightspeed Technologies, a maker of classroom audio systems that help students better hear their instructors. Headquartered in Oregon, Lightspeed’s DDMRP solution is based on the NetSuite cloud ERP the company has run since 2006.

Lightspeed worked with Demand Driven Technologies and Head in the Cloud, a NetSuite partner, which formed a joint venture called IntuiFlow to develop the DDMRP solution. DDMRP builds on the principles of traditional MRP while borrowing the best features from Lean manufacturing and constraint-based modelling to build more closely to actual market requirements and enable better and quicker decisions and actions at the planning and execution level.

With the help of DDMRP, Lightspeed reduced inventory by 30 percent within five months and improved flexibility across its planning and overall supply chain processes. “It’s allowed us to have a more effective supply chain and handle a wide array of long-lead time products.” said Julie Rockford, Lightspeed Director of Manufacturing Operations.

Recognizing the power of customisability and exploiting it aggressively opens broad new areas of opportunity and positions a company to thrive in the face of constant change. Organisations will benefit by exploring how customizations to business needs that were once impractical with on premise software now become possible in the cloud.

For more ERP information, please visit: http://www.netsuite.co.uk/portal/uk/products/netsuite/erp.shtml