@ Supply Chain Management


Making sense of the alphabets (ERP, SCM, MRP, MRP II, CRM, PLM… hmmmm)

There is no doubt in my mind that if I were to ever come up with a product offering in one or all of the above spaces, I’d christen it hmmmm without thinking a second time – market research be damned. Then again, the world is spared the notion by the appropriate coincidence that I haven’t come up with such a product offering but boy its getting there. There is little doubt in my mind that I detest jargon of every kind except the kind that I understand. Jargon introduces a threshold in conversations as well as shorthand to getting things across. If you were to talk to me day long about ERP systems, not only should you expect diminished returns of attentiveness over the course of the whole day but also an increased willingness to employ violence towards the end of dat. But remember, I know something about ERP. So what about those genteel people of the world who know nothing or next to nothing about ERP not to say anything about the rest of the alphabet soup? I will not even mention those who have been through an ERP implementation and a still smaller group who have been through a successful implementation of an ERP system.
So, first of all a clarification of the alphabet soup:
PLMProduct Lifecycle Management: How do you manage the entire lifecycle of the product from conception, to design, to manufacturing, to after market parts and lastly obsolescence? I ask myself who is responsible for thinking that products are the lifeblood of a company? Let’s see – do accountants think like this, do finance people think like this, do marketers think like this (may be), does customer support think like this, do engineers think like this (you betcha), do logistics people think like this? I’d hazard a guess that PLM was developed by engineers for engineers and has suddenly found broad acceptance in a whole stratum of jargonists for whom Excel just would not do. But I’m being very creative here with my guessing.
ERPEnterprise Resource Planning: A while ago, I read an article at Darwin magazine that ERP was neither about Resource nor about Planning, it was about Enterprise. And that puts a sharp axe to everything that you might read about from an ERP vendor’s colorful brochures no matter the breadth of applications and features that an ERP possesses. ERP bothers itself about the whole enterprise from sales and marketing to manufacturing and supply management, transportation and warehousing to finance and accounting – the whole gamut. When such is the scope, then failure is not only possible but also lurking at every corner to make a lunge at such an enterprise wide transformation. Methinks that ERP is ripe for competition (Can elephants dance?) – radical competition. Hence, hmmmm…!!
MRP (& MRP-II)Material Requirement Planning (Manufacturing Resource Planning): Before ERP was, MRP (& MRP-II) was the order of the day. Material Requirement Planning (MRP) was developed for manufacturing companies in order to calculate what materials were required, at what time in the optimal quantities. That morphed into Manufacturing Resource Planning (MRP-II) with the idea that true MRP required a more broad based approach that included shop floor control, planning and scheduling etc. The other major introduction with MRP-II was the closed-loop model with the aim to compare forecasts with output and thus improve the required processes.
CRMCustomer Relationship Management: As the name implies, this type of (software + methodology + capability) is aimed at better management of a firm’s relationship with customers. Rather than just powered by a software, it is a structured interaction with a firm’s customers that is systematic and intentional. The functions that are most impacted by CRM include marketing, sales and customer service with allied functions such as BI (Business Intelligence) etc.
SCMSupply Chain Management: Saved the best for last! Some might be of the view that supply chain management is all about managing suppliers. Perhaps this is why some insist on calling this field Demand Chain Management because it is all about fulfilling demand but that is not all that accurate either. Perhaps, it is better called Chain Management because that is what it really encompasses is a whole gamut of activities from suppliers to manufacturers to transportation to warehousing and inventory to sales and forecasting – a chain of activities that need to be deployed, changed or reworked at a moment’s notice. Oh by the way, just when it was getting manageable, everybody decided to outsource to China. A few years ago, it would have been common for people to say that SCM sits on top of ERP systems – today, it is the ERP system.

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Category: Reviews, Supply Chain Management, Supply Chain Software


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July 2006