Executive Briefings

ERP: It's Necessary, But It's Not Enough

Despite some pundits' exaggerated claims of ERP's demise at the turn of the century, ERP systems have proved themselves in costing, accounting, inventory control, order management and transaction control for key business processes such as invoicing and producing financial statements.

But most traditional ERP systems have long-term planning capabilities that do not easily provide the functionality to manage production on a day-to-day (let alone hour-to-hour) basis. While many ERP systems have a scheduling module for manufacturing, they often do not have the capability to manage individual orders in real-time or provide the reactivity that matches the complexity and reality of the shop floor.

ERP systems typically do not have the data and business logic to model a system in enough detail to manage shop floor intricacies. They can perhaps model work centers based on assumed capacity availability, order priorities and due dates. But they lack the capability to model the entire shop floor and improve flexibility through what-if scenario planning and quick (re)scheduling processes to accommodate unplanned events such as asset failures, manufacturing non-conformance runs (scrap and rework), engineering change orders (ECO), and rush jobs.

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Despite some pundits' exaggerated claims of ERP's demise at the turn of the century, ERP systems have proved themselves in costing, accounting, inventory control, order management and transaction control for key business processes such as invoicing and producing financial statements.

But most traditional ERP systems have long-term planning capabilities that do not easily provide the functionality to manage production on a day-to-day (let alone hour-to-hour) basis. While many ERP systems have a scheduling module for manufacturing, they often do not have the capability to manage individual orders in real-time or provide the reactivity that matches the complexity and reality of the shop floor.

ERP systems typically do not have the data and business logic to model a system in enough detail to manage shop floor intricacies. They can perhaps model work centers based on assumed capacity availability, order priorities and due dates. But they lack the capability to model the entire shop floor and improve flexibility through what-if scenario planning and quick (re)scheduling processes to accommodate unplanned events such as asset failures, manufacturing non-conformance runs (scrap and rework), engineering change orders (ECO), and rush jobs.

Read Full Article