Supply chain planning software has recently become a major part of a broader ERP implementation, according to Anil
Gupta, principal of consultancy Applications Marketing Group.
In the late 1990s, Tier 1 ERP vendors sold enterprise applications and smaller, specialized supply chain providers offered supply chain planning and execution tools Today, however, ERP vendors have "built a closed loop" around supply chain planning and execution in a standalone product that easily integrates into ERP systems, said Gupta.
"If planning and execution are in the same environment, you don't have to worry about integration and moving back and forth," he said. "If the plan isn't working, it's a lot easier to change."
Global supply chain planning is generally the first step in the manufacturing process and the first component of supply chain is demand management or demand planning. But when implementing supply chain planning systems, it's important to make sure everyone on the team buys into the process and requirements.
Just like any other kind of planning, "there are certain constraints you're working with," said Gupta. The constraints might be how much product the plant can make, how much a certain assembly line can handle, or the profit margin on a certain item.
"The key is to factor in all the constraints and make the best plan that maximizes the objectives" of that particular manufacturing plant, he said, noting that planning software is what creates that plan.
Once a user enters this information, as well as other data such as what the warehouse already has in stock, supply chain planning systems return a detailed hour-by-hour or shift-by-shift schedule. A manufacturer's plan might change weekly or daily, but supply chain planning software keeps up with variations and will create a new schedule accordingly.
"Suppliers might say they can't deliver or don't have capacity, so the supply plan software makes new projections," said Gupta. "At the end of the planning process, you'll end up with a good plan of what you're going to sell, and a good plan for what you're going to buy and source."
About the author: Christine Cignoli is a Boston-based freelance writer who covers IT infrastructures and storage technology. She is a regular contributor to SearchManufacturingERP. Contact her through her website.