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Can your ERP handle today's logistics and SCM complexities?

Frans Kok, General Manager for AEB Asia Pacific | Sept. 14, 2015
There are three areas where ERP systems might face challenges: customs management, transport optimisation, and cross-enterprise collaboration with supply chain partners.

The study found that functionality is a dominant factor in the decision for or against a certain software. "The decision-makers check very carefully to see what the solution can do and whether it supports their processes in the way they need," explains Dr. Sontow. The rule of thumb: the more complex the logistics requirements, the more carefully you need to check whether an ERP solution is viable.

The second most important factor is the flexibility of the system architecture — a topic of growing importance in the fields of both ERP and logistics. For example, distributed system architectures based on service-oriented architecture (SOA) offer advantages here. SOA supports networks of loosely associated business processes and enables both enterprise-wide and cross-enterprise access to shared services. The result is much greater flexibility and resilience.

For example, if there is a requirement to coordinate the manufacturing process across different sites in separate countries, businesses will probably benefit from a specialised solution that can handle this level of global logistics. A best-of-breed solution such as AEB's ASSIST4 software suite which can be integrated into existing SAP systems, provides visibility to areas that existing ERP software may not adequately cover, such as those dealing with customs, transportation and supply chain collaboration.

Summary
Whether ERP or best-of-breed solution — ultimately, the answer to this question depends primarily on the role of logistics and supply chain management in your company: is it a critical competitive or differentiating factor? If so, then the importance of powerful IT support is that much greater. Market research firm Gartner determined in 2013, for example, that shippers trust their ERP software to manage their supply chain as long as it meets the basic requirements. But the study showed big differences between companies that see themselves as generally below average in the area of supply chain management and companies that rank themselves as 'leaders' in this field. A much higher proportion of the latter group turned to specialised, or 'best-of-breed', software.

 

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