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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.

Mobility can be another major weakness of ERP solutions. "Everything currently on the market gets poor reviews," notes Dr. Sontow, citing the mediocre average scores for mobility given to the logistics ERPs ranked in the Trovarit study. "The results are really weak," says the expert. This could grow into a major sticking point, especially since mobile devices are a virtually indispensable element of how businesses operate today, especially in logistics.

Vulnerabilities in transport management and customs
ERP systems can also fall short in some functional areas that might require information and interaction from points outside the company. "ERP systems are always about order management, traditionally within the company itself, from receipt to issue," explains Dr. Sontow. "And ERP solutions do that well." But the support that ERP systems can provide here always depends on the company's unique requirements, and businesses with more complex needs will stand to benefit from a specialised solution.

Three unique areas where ERP systems might face challenges are: customs management; transport optimisation; and cross-enterprise collaboration with supply chain partners. For customs clearance processes, they are subject to external factors such as laws and regulations, which can change quite often. "It doesn't make much sense for ERP providers to constantly update their software to accommodate such changes," Dr. Sontow says.

Transport optimisation and management require an ERP system to feed data back into the control function and then optimise it. These require regular input and information sharing between systems, which can prove to be something ERP systems are not adept at handling. For cross-enterprise collaboration, the objective is to share information with supply chain partners such as suppliers, forwarders and on to customers. However, most systems do not provide all the information necessary for supply chain collaboration. Additionally, ERP solutions generally contain data that isn't meant to be shared, which makes granting outside parties access a sensitive topic.

Do best-of-breed solutions offer an alternative?
Transport management, customs clearance, and supply chain collaboration are specialised fields often better served by 'best-of-breed' providers. These providers with their solutions offer an alternative to modelling logistics processes in ERP systems and are growing in popularity, despite the ever-expanding functionality promised by ERP solutions providers. This is the assessment of Steve Banker, Director of Supply Chain Solutions at the ARC Advisory Group, writing in the magazine Logistics Management.

But, says Banker, it is increasingly important for providers to offer a comprehensive supply chain platform, not just standalone software solutions: "Whether you provide ERP or best-of-breed solutions, you had better be able to offer warehouse management, transport management, and various supply chain solutions."

How businesses can find the right solution
What then are the critical issues when looking for the right software strategy in the supply chain? The Trovarit study examined the key factors in choosing an ERP system, which essentially help you answer the question of 'best-of-breed' vs. ERP.


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