Tag: ERP

How APS Software Enhances ERP Systems
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Enterprise Resource Planning (ERP) systems are often praised as all-in-one solutions for managing business processes. They digitize and automate workflows across an organization, offering a wide range of functionalities under one roof. However, when it comes to addressing the specific complexities of manufacturing—like finite capacity planning or managing labor resources—ERP systems can benefit from additional support. That’s where Advanced Planning and Scheduling (APS) applications come in.

APS software is purpose-built to handle the many challenges manufacturers face, without requiring you to “rip and replace” your current investment in ERP. In this blog, we’ll explore the key differences between ERP and APS systems, how they complement each other, and how APS can help manufacturers overcome planning and scheduling obstacles with greater efficiency and precision than traditional ERP alone. 

What is ERP?

To understand how APS systems complement ERP, we must first acknowledge what ERP systems do well. These applications (often a collection of “modules”) are designed to manage and control core business functions, such as inventory, finance, human resources, vendors, customers, and basic operations. They’re great at managing the “master records” for these functions. In the manufacturing world, this would include elements like bills of material, pricing schedules, contract details, etc. They also deal with the “numbers,” e.g., how much material or finished inventory is on hand, what components are on order and when they are expected to arrive, what a vendor’s average lead time is, and so on.

Instead of duplicating what ERP systems do well, APS software leverages these functions and builds upon them to handle the things most ERP systems do poorly in a manufacturing environment.

ERP Limitations

ERP systems are typically oriented around business process logic, which doesn’t always map to the unpredictable behavior of equipment and material flows in a complex manufacturing environment. This disconnect can make it difficult for production schedules to reflect factory-floor realities. Here are a few of the limitations that create particularly painful headaches for manufacturers.

Infinite resource capacity assumed – ERP systems typically assume infinite resource capacity (including people and equipment), leading to a host of issues such as unrealistic delivery schedules, poor resource utilization, and on-going shop floor bottlenecks. Precise forward (or backward) scheduling tied to actual resource constraints often requires significant manual intervention. 

Limited ability to handle disruptions – Agility is critical in today’s manufacturing environments, but ERP systems were built with a decoupling between modules (ie. purchasing, production, and sales) that makes it difficult to understand and respond to disruptive events. Complex manufacturing often requires a web of production resources, spanning multiple production lines and facilities. A bottleneck or delay in one area can have a ripple effect on the entire system. Even those ERP systems known for their manufacturing capabilities lack the ability to respond to operational or supply chain disruptions and dynamically adjust schedules throughout the enterprise.

Misalignment between supply and demand – As noted already, traditional ERP platforms are excellent for managing core business functions. However, their approach to operational processes is normally standard lead times an daily buckets instead of continuous flow and synchronization between supply and demand signals. This results in misaligned replenishment cycles and fragmented planning. Furthermore, most ERP systems decouple supply from demand at every level in the multi-level bill of materials, making it even more challenging to synchronize production stages with real-time demand.

Customization and adaptability limitations – ERP vendors often promote the customizability of their systems, but the intricate nature of manufacturing (multi-site, multi-product, variable batch sizes) makes it difficult for a single ERP configuration to handle all scenarios without extensive tailoring. This forces manufacturers to adapt their workflows to the software rather than the other way around. Furthermore, custom changes can be expensive, slow to implement, and complicate future upgrades. 

What is APS and How Does it Fill the Gaps?

As we touched on above, most ERP systems treat resources as infinite. They may look at current and future inventory availability through materials requirements planning, but people and equipment are seen as inexhaustible. Production lead times are static estimates, typically stored in the master data file. Hence, the Master Production Schedule (MPS) produced by ERP is at best an estimate of what might be produced and by when under optimal conditions – which they rarely are.

Conversely, APS systems tie production to real-time, real-world data, including actual resource constraints. The production schedules produced by APS reflect operational realities and are far more realistic than the static guesses produced by ERP. When the inevitable disruptions happen and schedules are thrown off, APS can dynamically reschedule operations throughout the enterprise, optimizing resource utilization and safeguarding throughput.

The Benefits of APS

Many manufacturers who come to us for help do so because they are missing core targets and KPIs like on-time deliveries, inventory turns, cycle time, equipment utilization, and more. Often, they were hoping their ERP system would help them achieve their goals. Unfortunately, regardless of how cleverly they are marketed, ERP systems were never designed to do what APS software can do.

Having the kind of clear execution plan that only APS can provide leads to several enterprise-wide improvements, including:
- Clear direction – Everyone knows what to work on and when to work on it.
- Less idle time – Factory workflow is optimized so employees and resources aren’t waiting for work to show up.
- Improved equipment utilization – Manual production scheduling can lead to pile-ups behind some equipment while other resources sit idle. APS takes advantage of available capacity to optimize equipment utilization.
- Lower cycle times/faster throughput – Optimizing workflow also speeds up operations lowering cycle times and improving throughout performance.
- Better constraints management – Some APS systems, like SyncManufacturing, can help identify the real shop floor bottlenecks so you can address them to further improve throughput and lower cycle times.
- Reduce lead times – Lower cycle times and increased velocity naturally lead to lower lead times. For example, this SyncManufacturing customer reduced lead times from 3-4 weeks to less than 5 days.
- Improved on-time delivery performance – Since APS uses finite capacity planning, production schedules are more realistic.
- Build customer trust – Since production schedules are more realistic, so are capable to promise dates.
- Less expediting – More realistic production schedules also mean less expediting, which can lower production costs, not to mention stress levels.
- Synchronize production – APS aligns the multi-level BOM structure, overcoming the decoupling effects of ERP / MRP. 
- Lower inventory levels – By aligning procurement and WIP production to demand, many manufacturers are able to dramatically lower inventory levels. For example, this SyncManufacturing customer reduced WIP by 15% in the first three months after implementing APS.
See our customer case studies to learn more about how manufacturers are achieving these benefits by implementing SyncManufacturing.

ERP and APS Integration

As we’ve discussed, ERP systems excel at managing master data files across the business, from production to inventory to finance. This reliable and accurate data source is essential for the analyses that APS performs, so a solid ERP system that provides reliable data is still essential. APS leverages and supplements that data, providing insights across the enterprise and direction to production. 

Synchrono currently integrates with a wide variety of ERP systems. Some of the most common ERP systems SyncManufacturing integrates with include SAP, Microsoft D365, Infor, Epicore, Oracle, Costpoint, and many more.

Enhance Your ERP with APS

If you’re aiming to elevate your planning, scheduling, and execution capabilities, it’s time to look beyond what traditional ERP systems alone can offer. Integrating APS with ERP allows you to fill critical gaps—optimizing production schedules, improving resource utilization, and increasing agility across your operations. APS brings the precision and flexibility needed to respond to real-world manufacturing complexities, enhancing your ERP investment with real-time insights and more dynamic, achievable plans.

Are you ready to take control of your manufacturing operations? Take the next step by setting up a demo of SyncManufacturing® and explore how our APS system can pick up where your ERP system leaves off.

Request a demo
September 9, 2025
ERP is an Oxymoron

Have you ever had one of those moments when a thought hits you that is so obvious that you wonder why it never occurred to you before? I just decided that there couldn’t be a technology less aptly named than Enterprise Resource Planning, more commonly known as ERP.

Before I go into why, let me lay the groundwork so we’re all using the same terminology.

What is ERP?

From a manufacturer’s perspective, ERP was born with the addition of MRPII to the core financial functionality already found in existing systems. Pretty much all of these early systems provided modules for GL, AR, and AP. (Sometimes called “GLAPAR” in industry jargon.) Many of the early ERP solutions provided some procurement functionality as well as sales orders, though not many offered manufacturing-oriented functionality like the ability to configure products on the fly.

Sometime in the 80s, ERP vendors realized if they wanted to target the manufacturing sector, they needed to provide tools to help manufacturers deal with what is arguably their biggest issue: inventory. That’s when Material Requirements Planning (MRP) – a concept that had been around since the 50s – was codified in software form.

There is a belief that manufacturers are slow to adopt technology. I think it’s more that technology is slow to adopt manufacturing. Historically, ERP vendors have focused on manufacturing last, and many never quite get it right.

And that leads me back to my original premise: ERP is an oxymoron.

Garbage In/Garbage Out

As Trey Jordan recently wrote in his post Going Lean: Should You Replace Your ERP System? (insert link), ERP systems are great at collecting financial transactions from all over the enterprise. The E in ERP is just fine. My problem is with Resource and Planning.

In this post, I’m just going to look at inventory, since many ERP systems don’t even try to manage capacity. If you want to look at this from the capacity perspective, you might enjoy our white paper: The Next Generation of Planning and Scheduling Solutions.

The core resource planning tool in ERP systems is, of course, MRP. Put simply, MRP looks at future material requirements and works backward using inputs such as current inventory levels, order lead time, and so on to create time-based requirements for raw materials and components.

In theory, that makes perfect sense. If I want to make 100 widgets by the end of the month and it takes me two weeks to do it, I need to make sure I have the materials available by mid-month in order to reach my goal. If some of the materials required are subassemblies built in-house, then the system issues production orders so they will be available when needed as well.

The problem lies not in the algorithms, but in the inputs. Or to use a technology axiom that’s been around even longer than MRP: Garbage In/Garbage Out.

Where does the order for 100 widgets come from? The quick answer is the production schedule, but what are the inputs into that? In push-based manufacturing environments, the primary input into the production schedule is the sales forecast.

Therein lies the problem.

Sales forecasts are always inaccurate; the only question is by how much. I just Googled “sales forecast accuracy” and got 2 million hits, most of them having to do with why sales forecasts are always wrong. I skimmed a few of the results to see how accurate forecasts are on average, and the answer seems to be around 75%.

However, many of these articles and posts looked at forecasts from the perspective of the sales team: Did sales hit the numbers? A 100% accurate forecast from the perspective of the VP of Sales can still be wildly inaccurate from the perspective of production if the products sold were different than those forecasted.

Wisely, many manufacturers have learned not to trust the forecasts generated by sales. They hold weekly S&OP meetings to look sales leaders in the eye and review what’s in the forecast so they can adjust their production schedules based on what seems realistic and doable. These meetings can get tense. And, as much as the participants would like to apply proven processes to their S&OP meetings, they don’t do much to fix the core problem: Everyone is still guessing.

Manufacturing Demands a Different Approach

Maybe I should cut the ERP vendors a break. It’s not that their systems are coded poorly; it’s that they start with the wrong premise. That is, they were developed for push-based manufacturing, a generally accepted practice even though MRP has never been proven to provide the sustainable performance improvements manufacturers need.

The opposite of push-manufacturing is pull, where resources (including capacity) are synchronized to customer demand. Pull is a core element of manufacturing principles such as Lean Manufacturing and JIT Inventory Management, so many readers are probably familiar with it. We often used pull-manufacturing or pull-replenishment synonymously with Demand-Driven Manufacturing, though our software Platform also applies other core principles of Lean such as Theory of Constraints.

If you’re tired of dealing with an Enterprise Resource Planning application that does nothing to help you plan resources effectively, I encourage you to investigate Demand-Driven Manufacturing. Our website is filled with white papers, articles, on-demand product demonstrations, and case studies that can help you learn more. If you’re brand new to the concept, check out our YouTube video: What is Demand-Driven Manufacturing?

June 18, 2018
Going Lean: Should You Replace Your ERP System?

By Trey Jordan, Senior Software Consultant

Enterprise Resource Planning (ERP) has been around for decades. You’d think, by now, the industry would have it figured out. Yet, every year, we hear news about ERP implementations that fail. For every one of these high-profile flops, there are many, many more implementations that simply fail to live up to expectations.

At some point in their Lean journey, nearly every manufacturer faces the same decision: Do you take the time to fix or replace your broken ERP systems or just keep working around them?

Is “Rip and Replace” Really Worth the Effort?

If you’re even a modest-sized manufacturing enterprise, you’ve probably already sunk hundreds of thousands of dollars into your ERP system. If you add up everything including the software costs, implementation, training, maintenance fees, etc., the actual figures can get pretty scary.

Perhaps even worse than the costs, though, is the chaos that typically surrounds an ERP implementation. Some years ago, Gartner created a model called the Hype Cycle that they used to represent the life cycle of a technology. Though the intent was to represent technology as a whole, I think it also pretty well represents what we see in a typical ERP implementation. The only difference is that many manufacturers never emerge from the Trough of Disillusionment.

Gartner Hype Cycle

Does Your ERP Implementation Meet Expectations?

Depending on what study you reference, roughly three-quarters of ERP implementations fail to some degree. Many studies look specifically at whether or not the implementation finished on-time and on-budget. They often fail to consider whether the ERP system helps the organization achieve its desired objectives. If that were factored in, I suspect the percentages of “does not meet expectations” implementations would climb even higher, especially in manufacturing.

The challenge is that Lean Manufacturing, which unquestionably can help manufacturers achieve a wide variety of bottom-line benefits, requires a pull-based approach that is tied to customer-demand (throughput). ERP systems, with their forecast-driven, push-based approach to resource planning and production scheduling, aren’t necessarily designed to support a Lean environment. Even most ERP systems that claim to support Lean Manufacturing are still built around push-manufacturing, with pull implemented using a variety of add-ons and workarounds.

Interestingly, if you do a Google search on why ERP implementations fail, you will get lots of different answers, from lack of executive support to poor change management practices to unrealistic expectations. All of these may be valid, but they fail to address the core underlying issue: the ERP system wasn’t designed to work in a Lean Manufacturing environment.

Even if ERP systems were easier to implement, success isn’t likely to be achieved even with a new ERP system when success is measured against desired outcomes such as increased velocity and reduced inventory levels. So, why would anyone go through the hassle of replacing their ERP system as part of their Lean journey?

ERP: What is it Good For?

Now that I’ve completely ripped apart the concept of ERP, let me head back in the other direction for a moment. While ERP doesn’t do particularly well at resource planning and production scheduling, it does have its uses.

For most organizations, ERP is the system of record for all financial transactions and information. As things happen in the business, e.g., something is bought, sold or produced, these events trigger financial transactions that flow through the ERP system and eventually to the general ledger.

In addition, ERP is also the backbone of the sales system. Whether your sales team is using the sales order module that comes with your ERP system or add-on applications for configuration, pricing, and quotes, the ERP system is the system of record for master files such as bills of material, pricing and customer information.

Likewise, your current ERP system can create a solid backbone for a Lean implementation as it can provide the master data information needed and collect the financial transactions that result from production. You just need to overcome the inherent shortcomings of ERP in a Lean environment. For example, SyncManufacturing synchronized planning, scheduling and execution software (part of the Synchrono® Demand-Driven Manufacturing Platform) sits on top of your current ERP application(s), giving you the power to transform a push-based production environment into to a demand-driven, pull environment. It doesn’t really matter which ERP you use; SyncManufacturing can accept data from any source – even multiple ERP systems.

Related post: The Pros and Cons of Consolidating ERP Systems

But What if You Don’t Have ERP?

Occasionally, I will run across a manufacturer that doesn’t have an ERP system at all. Much of the time, the manufacturer started out as a small job shop using no more than a simple financial system and a few spreadsheets to manage their operations. Over the years, the business grew, and perhaps even changed manufacturing modes, but their systems didn’t quite keep up.

The question I often get from this type of manufacturer is a bit different. They want to know: Do I need to implement ERP at all in a Lean environment?

The answer is not necessarily. Technically, all master data (resources, items, BOMs, routings, inventory, purchase orders, and sales orders) can be entered and maintained directly into SyncManufacturing planning, scheduling and execution software. SyncManufacturing is also creating inventory transactions as parts are produced, consumed, received, and shipped. The business will probably want some sort of financial system of record to collect financial transactions and produce reports, but it is not strictly necessary to have even that to implement Lean using SyncManufacturing software. It is certainly not necessary to have MRP or production scheduling functionality in place before implementing Lean.

Still have doubts? That’s not unusual. Early in our careers, most of us were taught that getting MRP right was the key to improving results. It’s hard to give up MRP and ERP, if not totally, at least as the keys to all our operational challenges. But no matter where you are in your journey, I welcome your questions and comments. Please add them below or reach out to me directly, and I will do my best to respond to each and every one.

June 11, 2018
The Pros and Cons of Consolidating Manufacturing ERP Systems

Managing operations through multiple manufacturing systems can be challenging, but it’s a daily reality for many manufacturers. In this post, we’ll look at the pros and cons of consolidating ERP systems – and propose an alternative.

When Two Worlds Collide

Whenever two or more organizations merge, they are almost always using different ERP systems. As anyone who’s ever tried to consolidate an ERP systems knows, it’s not easy.

Each organization chose their respective ERP systems for a reason. For instance, one facility might operate in a make-to-stock mode and the other in a make-to-order mode even though they manufacture the same types of products for the same customers. Addressing local regulations and business practices is another common (and good) reason for implementing one manufacturing system over another.

Even if their chosen system isn’t perfect, the users in each facility may have learned it well enough (or customized it enough) to work around many of the application’s shortcomings. I’ve seen people who told me they HATE their ERP system fight tooth and nail to keep it when told the organization was considering replacing their system with the same system used at corporate or at another facility.

The 3 Cons of Consolidation

The first con of consolidation is obvious – consolidating ERP systems is hard on your employees. Even those who are willing to get with the program are going to have to learn an entirely new system. That takes time and money and eats into productivity.

Then there are the real and valid reasons why facilities chose different systems. Even if the ERP system on which the company decides to standardize is flexible enough to handle multiple manufacturing modes and other unique requirements, there will still be challenges. For instance, different setup parameters and customizations may mean that the systems won’t talk to each other the way you had hoped.

Finally, there is the expense of consolidation. ERP systems can cost hundreds of thousands to millions of dollars – just in software costs alone. Though some vendors offer ERP on a more budget friendly subscription basis in a SaaS model, the costs can still be considerable if you have a lot of users. Plus, you still have the upfront costs for things like implementation, training, customization, and so on.

The 3 Pros of Consolidation

If a consolidation project goes as planned – and that’s a big if – the company is probably hoping to gain benefits such as:

Simplified support and maintenance – Theoretically, if everyone is using the same system, user support should be easier. I don’t want to discount this benefit because it’s one that can be achieved, though it can take years to get there and may require functional compromises.

Increased visibility – Management wants to have a clear picture of what is happening across the enterprise. With disparate systems used in each of the facilities, getting accurate KPIs is a challenge. Getting KPIs in real time is next to impossible.

Decreased lead times – If the organization is vertically integrated, with facilities supplying each other, increased visibility into capacity and material availability across facilities should allow production managers to optimize production schedules and resource utilization. In my experience, though many ERP vendors claim to be multi-entity capable, in practice, their ability to handle cross-facility resource management varies widely.

Is it Time to Take Your Lean Initiative to the Next Level?

The Synchrono Demand-Driven Manufacturing Platform can help you achieve the consolidation benefits you’re looking for plus the benefits of Lean for a fraction of the cost and without the loss of productivity and sheer chaos of an ERP consolidation initiative. Here are just a few examples:

One version of the truth – Our Platform sits on top of your ERP systems, so there is no need to rip and replace any of them. We can consolidate information from disparate systems and serve up data and insights in role-specific dashboards.

A sample dashboard from SyncView software

In the video, How Orbital ATK Enabled the IIoT and a Visual Factory, Orbital ATK’s systems architect shows a graphic of all the different systems from which their Synchrono implementation pulls data. The entire video is well worth watching, but if you just want to take a quick peek at their chart, it’s at about 5:15 in the recording.

Management by exception – Trying to keep your eye on everything that is happening across facilities can drive you crazy. Our visual platform allows you to see status across your enterprise and drill down on those that require your attention, to better understand the root cause of the issue.

This bird’s eye view of the entire enterprise was taken from the webinar Visualizing Metrics in the Factory of the Future.

Pull-based replenishment – Demand-driven inventory management is a core principle of Lean, and our eKanban software allows you to send electronic replenishment signals across facilities. You can also bring your suppliers into your Lean initiative – and improve supplier collaboration, visibility and performance – with our supplier eKanban capabilities and supplier communication portal. Watch a demo.

Synchronize resources across facilities – Our exclusive CONLOAD™ scheduling algorithm drives production flow across facilities by controlling the release of work into production based on the availability of people, machines, materials, etc. and managing constraints using principles from the Theory of Constraints. Watch our YouTube demonstration.

Capable to promise – Because we can access and manage data across multiple enterprise systems (and machines, sensors, etc.), our capable to promise functionality provides a true picture of what can be produced and when.

Learn More

Consolidating ERP systems is such a burdensome, disruptive process, it’s worth taking the time to at least consider the alternatives. In addition to the resources I’ve already shared throughout this post, here are a few more I think you’ll find helpful:

Article: What is Demand-Driven Manufacturing?

White paper: E2E Supply Chain Visibility Technology is Here

Video: How to Synchronize Production Planning, Scheduling, and Execution

June 4, 2018
It’s Time: Manufacturers Need to Cut Ties with MRP and Spreadsheets

A few years ago, Aberdeen Group did a study that showed that 63% of “best in class” manufacturers still used spreadsheets for planning. With percentages this high, it’s probably safe to say that there is a lack of trust in planning tools like ERP and MRP even in the best-run companies.

Of course, spreadsheets come with their own set of issues. You may have a certain amount of confidence in the spreadsheets you’ve created, but what about those from your colleagues? Do you know what formulas they use to arrive at their conclusions? Where did they get their data? If the creator of the spreadsheet goes on vacation or worse – leaves the company – how quickly could a new planner take over their role using the existing planning tools and methodologies?

Spreadsheets also contain computational and data errors. Forbes published an article quoting “various studies” that put the rate of significant errors at 88%. Though no specific studies were named, you probably don’t need that extra level of validation. You know the spreadsheets you use have errors in them. Otherwise, why would you still be having such a hard time synchronizing inventory and production to demand?

The Problem Lies in the Basis of the Plan

Actually, spreadsheets are pretty powerful tools, even with the occasional error that creeps in. Likewise, MRP and ERP usually do exactly what they are supposed to do. They create time-phased material requirements and production plans based on the parameters entered into the system: forecasts, reorder points, capacity and so on. The calculations are so basic that even the most rudimentary software applications get them right.

The problem lies in the basis for the plans themselves. At the root of all production and material requirements plans lies the forecast, often generated by the sales or marketing department. Even when calculations are based on an analysis of historical data, it’s still a forecast. And, as we are all painfully aware, there is no such thing as an “accurate forecast.”

Not trusting what they’ve been handed, inventory and production planners use spreadsheets to massage the forecast data before it is entered into the system. Some of these comments might sound familiar:

“We always see a bump in demand for these items in June, so we need to increase production now.”

“I know sales has a quota on this new product, but I think they’re being overly optimistic. If we cut the requirements by about 10%, we can deal with it later if they actually manage to reach their quota.”

“I read in the news that there may be shortages of this material. Let’s order extra now so we can stay ahead of the problem.”

At the end of the day, the forecast is still a forecast, even with the wisdom of inventory and production planners added in. Unfortunately, the new forecast may not represent reality any better than the original forecast received from sales, and ERP and MRP have no choice but to translate those erroneous assumptions into equally flawed material requirements and production plans. In turn, these flawed plans translate into all sorts of issues: expediting orders, late nights, increased overtime, missed deadlines, angry salespeople, angrier customers, inflated inventory levels, blown budgets, tense meetings in the executive conference room and bland food diets to prevent your indigestion from turning into a full-blown ulcer.

Grounding Planning in Reality

Since there is no such thing as a crystal ball that shows future demand, manufacturers who want to break free from this vicious cycle need to replace forecast-based planning with reality-based planning. In short, ditch ERP, MRP and spreadsheets (at least for replenishment and production planning) once and for all.

The only way to do that is to synchronize production and material requirements to actual demand and supply as well as what is happening on the factory floor. It’s called Demand-Driven Manufacturing, and here’s a quick definition:

Demand–Driven Manufacturing is a method of manufacturing where production is based on actual customer orders (demand) rather than a forecast. This process is accelerated by technology that automates, digitizes data and connects every function within the demand-driven organization and to every layer of the supply chain.

We created an entire platform called the Synchrono® Demand-Driven Manufacturing Platform that sits on top of your current ERP system and synchronizes all elements of production to demand and supply. There is no need to rip out your current ERP or MRP applications; our tools use actual customer demand, supply status and the reality of the factory floor to synchronize production. The methods used, such as eKanban, Lean Six Sigma, Theory of Constraints, are no doubt familiar to you.

If this is the first time you’ve taken a close look at Demand-Driven Manufacturing, we have several resources which can help you build a solid foundation for discussions with others in your organization:

White paper: The Next Generation of Planning and Scheduling Solutions

White paper: How Technology Will Connect Your Enterprise and Create the Demand-Driven Manufacturing Factory of the Future – Today

White paper: Why Become More Demand-Driven? Responding to Customer Needs

We also produce a YouTube channel where you can access several educational podcasts and videos that explain some of these concepts in more depth.

As always, if you have questions, please add them in the comments below, or reach out to us directly. We would love to hear from you!

March 19, 2018
POV: 3 Ways Layered Technology Differs from the ERP Add-On

Most manufacturers have, at one time or another, deployed an “ERP add-on.” These are the bits and pieces of functionality sold through third parties that round out the capabilities of an ERP system. Common ERP add-ons can include core functionality like Advanced Planning and Scheduling (APS) and Supply Chain Planning (SCP), but for major ERP systems, there are dozens if not hundreds of add-ons available.

Because add-ons are such a familiar term to manufacturers, we’re often asked if this is what we mean when we talk about deploying a layered technology approach to Demand-Driven Manufacturing. Not exactly, but before I go into the differences, let me bring everyone up to speed by sharing Gartner’s viewpoint on the layered approach so we can put the differences in context.

Gartner’s 5 Stages of Supply Chain Maturity

In a recent report, Supply Chain Maturity Assessment for the Demand-Driven Supply Chain, Gartner defines 5 Stages of Supply Chain Maturity. On one end of the spectrum, Stage 1 is a reactive environment where the manufacturer primarily uses manual processes (for example, spreadsheets for scheduling). On the other end, Stage 5, is a fully integrated enterprise, leveraging algorithms and predictive analytics for continuous improvement across the supply chain.

Progression through each of these stages does not require replacing an inadequate ERP system with one that is more fully functional. Instead, Gartner advocates layering on technology to progress to ever-higher levels of supply chain maturity. The layered approach allows manufacturers to apply maturity-enabling technology at a targeted and affordable pace. It also drives a faster ROI than a traditional ERP implementation. Here’s an example:

3 Ways the Layered Approach is Different

So, how is what Gartner is recommending different from the add-ons ERP vendors have been offering for decades? We see three major differences. There is some overlap with what some add-on vendors offer, but when taken together, the layered approach is a major step-forward for organizations looking for a fast, affordable way to leverage technology to improve operational performance.

Philosophy before function. Add-on applications tend to focus on addressing capability weaknesses within an ERP system. For example, an APS application may offer the ability to do finite capacity planning. That’s good, but finite capacity planning is a point-solution to a specific problem.

Layering technology provides a broader, more business objective-oriented approach to systems than simply adding on an application to plug a hole. For example, our Demand-Driven Manufacturing layers help manufacturers achieve a leaner, more agile environment by implementing philosophies like Lean, Six Sigma and constraints management.

Source agnostic; big picture. Add-on vendors are getting better at working with disparate ERP systems, but there’s often still an integration challenge to be addressed before the add-on can start providing the promised benefits. If there are multiple sources, e.g. financials, CRM, home-grown point solutions, the project can get very complex. Many questions need to be answered such as: What format does the data need to be in? How do we ensure the data gathered is current? How do we combine the data from multiple sources?

Furthermore, because the add-on is focused on a specific challenge, it only provides one aspect of the big picture. Any given role in a manufacturing organization needs analysis from multiple systems. Requiring that the user access reports and dashboards across systems to get what they need wastes time and resources.

Our approach involves layering technology that can connect to any data source – even raw data from the machines on your shop floor – and standardize the data so that it can be aggregated, analyzed and visualized across the enterprise in real-time. Users don’t have to access multiple point solutions or machines to get the information they need.

Supply chain ready. Layered technologies are web- and cloud-based, where a shared pool of resources are available on-demand. The subtle but important difference is that our approach means that the technology layers can be used across supply chain partners for end-to-end supply chain visibility and management.

Related Resources:

White Paper: The Demand-Driven Supply Chain

Article: The Changing Role of ERP in Manufacturing

February 26, 2018

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